10 things everyone should consider when buying a new car

A lot is riding on a new-car purchase. It is a big-time financial commitment, second only to buying a home for many Americans, so no one wants to make a choice they will later regret — or even worse, pay too much for what they get. Don't fool yourself: Determining the best vehicle for your needs, how much you want to spend and what color you want are easy, compared with what follows.

To help you navigate that next step in the car-buying process and emerge with the most car for the money, we've put together this checklist of what every car buyer should consider before signing on the dotted line. It was formulated to help you find a vehicle that pushes all your buttons without wilting your wallet.

1. Standard Equipment

It's not enough to think just about the features that come with your car — i.e., the standard equipment. You also have to consider the quality of those features.

All experts agree that before entering a dealership, you should create a list of items — such as leather seating, moonroof, cool wheels, etc. — that your new ride must have. These are the conveniences, performance enhancers and safety equipment you just can't live without. Then, look for the type of car you want that has as many of your must-haves in its standard list of equipment as possible.

The features we think no one should live without are anti-lock brakes, electronic stability control, front and side airbags, air conditioning, Bluetooth hands-free technology, an audio system with iPod connectivity, and power windows and door locks.

What logic doesn't tell us is to make sure that these must-have features are well-built. Just because a car has the equipment doesn't mean that equipment will stand the test of time and the abuse you put it through on a daily basis. If the audio system's controls, for example, are made of flimsy plastic, they will likely break under daily use as the car gets older.

If that happens, it will not only affect your ownership experience (can't listen to the radio) but your wallet as well (the cost to fix the radio and the hit in resale value if you don't).

Consequently, don't forget to touch every surface of the vehicle and examine the features for inferior construction.

2. Options

The key to choosing options is to arm yourself with a la carte pricing information and to know what options packages are available for the vehicle you choose, what they include and how much they cost.

Almost no car is going to have all of the features on your must-have list. Hence, carmakers offer options to fill in the gaps. Unfortunately, the number and type of options you choose can turn a great deal into an expensive proposition. So you must choose wisely.

Options packages can be a relatively inexpensive way to get the added features you want. However, many packages will include one or two must-have features and several others that you don't want. For instance, you must have a sunroof. The salesman is pushing you toward the Open Air Package, which at $1,500 is a bit pricey — all you want out of that package is the sunroof. By itself, that costs only $900. In this case, you're better off choosing the individual option, not the package. But often the opposite is true.

Before checking off anything on the options list, you have to do the math. If you are considering a package of options, add up the individual costs of the features you want in that package and compare the total to the cost of the overall package. If the sum of the parts is greater than the whole, the package is worth it. If not, you now have a baseline for negotiation: what you're willing to pay for the options package.

3. Resale Value

Right now, purchasing a car is foremost in your mind, so selling it later is probably not a high priority. However, the car's resale value is worth considering, because it is unlikely that you will keep this car forever. The features you choose now could affect how much you can get for the car when you sell it.

Your best bet to gauge the relative value of your car in five years is to use an online source like Kelley Blue Book. Kelley is not infallible, but it is one of the best resources for evaluating prices and determining values for new cars and used cars. At its website, kbb.com, you can calculate a car's resale value over its first five years. The mileage and condition of your vehicle will have a great impact on its actual worth for a private-party resale, but the resale value estimates that websites like Kelley's provide are a good gauge to the future value of your purchase.

Also, remember that cars with "green" features, such as hybrid drivetrains and other energy-saving innovations, may have greater residual value when it comes to resale. You will need to balance the higher purchase price for such innovations against your prediction of the sale price of the vehicle when you decide to move it on. However, it may cost you more to service and maintain such a car while you own it — money you will not be able to set against your sale price.

4. Emotional Feedback

The driving experience should not be a monotonous, robotic exercise in futility between two points on a map. A vehicle should give something back on an emotional level. If the car you choose has attributes like a luxurious feel, catlike agility and that indefinable fun-to-drive factor, it will make that monthly payment less painful. Some cars make you want to volunteer for car-pool duty or make that quick run to the grocery store or take that weekend road trip — just because you like the way they drive. Find one of these while you're test-driving models and you have a real winner on your hands.

5. Insurance Costs

Beyond your driving record, where you live and the type of car you're purchasing, a car's safety features can have the most effect on your monthly insurance premium — and in a good way. Cynthia Burrows from Bill Hubbard's Allstate office in Poulsbo, Wash., says that things such as airbags, anti-lock brakes and passive seatbelt restraint systems, to name just a few, can significantly reduce your yearly premium.

However, she also noted that rates for hybrids are higher because repairs are more specialized and more expensive, as are premiums for heavy-duty trucks because their girth can cause more crash damage.

6. Fuel Efficiency

How many miles per gallon a car gets is high on everyone's list of priorities these days. But it's important not to split hairs over small differences in fuel economy.

According to the website fueleconomy.gov, the difference in yearly fuel costs between a vehicle rated at 16 mpg city/22 mpg highway, or 18 mpg combined, and one rated at 17/24 mpg, or 19 mpg combined, is a scant $122 per year.

So unless there is a significant efficiency difference between two autos (5 mpg or more), don't get too worked up about it.

7. Safety Rating

Safety is a big issue, no matter what the car's cost. While a bigger, heavier vehicle will usually be able to withstand more damage, technology has gone a long way in making even today's smallest vehicles safer than ever before. Everything from simple passive restraints to front and side airbags to high-tech collision avoidance systems all factor into the safety equation these days.

Thus, it's important to know how well a car performed in safety tests. Those ratings can be found at the websites nhtsa.gov, iihs.org and safercar.gov.

8. Financing Rates

Know your credit score. We quizzed a number of finance officers from dealerships around the country and they all said the same thing: Availability and cost of financing come down to the buyer's credit rating. 

A score of 720 and up will garner the best interest rates, currently 3 to 4 percent, while a score below 620 will result in much higher rates, from 10 percent up to the state-allowed maximum. So get your financial house in order before you begin negotiating.

9. Rebates and Incentives

Some amazing discounts are available in today's depressed car market. Offers are usually posted on automakers' websites. Rebates and cash incentives are given to military personnel, loyal customers, recent college graduates, teachers, law enforcement officials and others.

They are even offered just for walking through the front door. Typically, these buyers are given a choice between a low finance rate or cash back, but rarely both. The catch is you'll need good credit to qualify for the low rate. All buyers, no matter their circumstance, will get the "cash back" incentive.

10. Warranty

Warranties provide peace of mind to the purchaser. Generally speaking, they cover defects in material or factory workmanship, under normal use and maintenance. Automakers are offering warranty durations from three years/36,000 miles up to 10 years/100,000 miles.

As you might imagine, not all warranties are created equal. The most quoted warranty is for the powertrain. But automakers also offer new-vehicle warranties that cover items such as the audio system, exterior paint, air conditioning, battery, etc., as well as anti-perforation warranties for rust and corrosion. The ones that offer both are ideal.

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