When you determine you’re ready for a new vehicle, one of the first things to consider is how to pick and pay for your next new car. The process isn’t all that difficult, but if you go through the steps, the results will be worth all the effort you put into it.

The AAA, Edmunds, Kelley Blue Book and a number of other sources offer valuable advice on how to go about choosing and paying for new (and used) vehicles. Here we’ll summarize some of the most important points – ones that can ultimately save you time and money.

Know What You Can Afford

This is a critical first point, since you can’t go out and buy a car without first knowing how much you have to spend. Sit down and go through your household budget to see where your money is being allocated. Financial experts recommend that no more than 15 to 20 percent of your monthly expenses go toward all car-related expenses. This includes car payment, insurance, maintenance and repairs. You’ll also want to factor in the trade-in value of your current vehicle, if you have one to trade or sell outright, along with what you have in the way of a cash down payment toward your new car.

Think About How You Drive

Take some time to figure out your daily and/or weekly driving habits. If all you do is commute to and from work five days a week and only occasionally need a larger vehicle for trips or vacations, maybe a subcompact or compact car will suffice. You can always rent an SUV or minivan for extended trips with the family or do a short-term rental on a coupe or convertible for a driving trip solo or with your spouse. Other factors to consider include how much cargo space you regularly need, whether you’ll be driving off-road at times, and how many passengers you carry most of the time.

What Features Do You Need?

Also consider the types of features you really need or want, along with how much they cost extra. If you travel a lot of miles, fuel economy should rank high on your list. Ditto safety features. What about if you plan to have children? Consider current as well as future needs.

Factor in Depreciation Costs

Your next new car will begin to depreciate the day you drive it off the lot, so this is something to take into consideration when you buy. Look for vehicles that have good to excellent long-term value.

New, or Nearly New

Maybe you don’t need to buy the most current model on the lot, when one that’s nearly new, one to two years old, may have the same styling, features, warranty and costs a whole lot less. Incentives, however, are usually limited to only new vehicles, not used.

Warranty and Maintenance Considerations

Determine how much it will cost you in maintenance and check out what warranty your proposed new car comes with.

Know your Vehicle’s Safety Ratings

Before you buy any new vehicle, check out its safety ratings through the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS).

Check Recommendations

Ask your friends, co-workers and family members for recommendations about vehicles you’re considering, especially if they already own one. Also check out third-party reviews by Kelley Blue Book, Edmunds, and new car reviews published in magazines.

Remain Flexible

Keep your options open by having several vehicles on your consideration list. After you’ve done all your homework, having a second- and third-choice vehicle in mind allows you to maneuver when and if you need to.

Arrange for Financing

You’ll be miles ahead and in a much better position if you have your financing in hand when you go to the dealership to negotiate the deal on your next new car. Do comparison shopping of local banks and credit unions as well as an automaker’s financing arm so you get the best deal possible.

By following these 10 tips, you’ll be well prepared to pick and pay for your next new car.

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