How to Choose a Car

Choosing a car is an important decision that depends on a combination of your needs, budget, desired features, the competition's offerings and even your brand preferences. If you're new to car buying or haven't made a purchase in many years, it can be hard to know where to begin. How do you choose a car that will exactly suit your needs for years to come? It just takes a little research and planning. When you know the kind of car you want, you can then decide whether you want to buy a new car, lease a new car, or buy a used car.

Steps for how to choose a car:

1. Assess your needs
2. Set your budget
3. Decide if you want to lease or buy
4. Consider other cars in the class
5. Weigh the costs of ownership
6. Find cars for sale
7. Set up a test drive
8. What to look for in a test drive
9. Pick your car
10. Time to buy or lease

Step 1: Assess your needs

Have you ever wondered, "Which car is right for me?" That answer depends on what you expect from a daily driver. Some people like to make a statement with their cars, and some like to go for spirited drives on weekends. In those cases, practicality tends to take a back seat while emotions and feelings take the wheel.

But for those who need a vehicle for daily duties, function should come before form. Here are some practical considerations to keep in mind:

• How many passengers do you regularly have in your car? Do you occasionally need more seating capacity, for example, if friends are visiting?
• What type of driving do you do? Is it primarily highway, surface streets, off-road, etc.?
• Do you have a long commute, and because of that, is fuel economy important to you?
• If you're considering an electric vehicle, how much range do you need?
• Do you often encounter inclement weather, and if so, do you need all-wheel drive?
• What are your must-have features? Think surround-view camera system, leather seats, Apple CarPlay, etc.
• What safety features are important to you? Do you want blind-spot warning, lane departure warning and automatic emergency braking, for example?
• What cargo capacity do you need?
• Will you be using children's car seats?
• Will you be doing any towing?
• How many garage or parking spaces do you have?

Step 2: Set your budget

Unless you're paying cash for your car, you'll need to think about financing your purchase or lease as well as decide which car to buy.

How much can you really afford to allocate toward a car payment each month? The general rule is that your monthly new car payment should not exceed 15% of your monthly take-home pay. A used car will be less expensive, but the same rule should apply. If you're looking to lease, aim for a monthly payment that's less than 10% of your take-home pay. You'll also want to factor in an additional 7% of your monthly income to cover fuel and insurance costs. Knowing your budget beforehand will help you when negotiating your next car or truck.

The Edmunds affordability calculator lists vehicles that fall into the price range you've predetermined, which can make finding the right car based on a monthly payment easier. Keep in mind that the prices on the results page will change based on the trim level, options, taxes and finance fees.

Step 3: Decide if you want to lease or buy

There are pros and cons to both leasing and buying, and your priorities may dictate which is the best option for you.

For example, a lease requires little or no money down and offers lower monthly payments. But when the lease ends, you will have no car and will need to go shopping again. On the other hand, buying a car is more expensive initially, and the monthly payments are higher. But when you pay off the loan, you will own a car that you can drive for as long as it runs.

Here are a few more factors to consider when deciding between leasing and buying:

Leasing

• You can drive a more expensive car for less money. 
• You can drive a new car with the latest technology every few years.
• Most repairs will be covered under the factory warranty.
• There are no trade-in hassles at the end of the lease.

Buying

• You have more flexibility to sell the car whenever you want. 
• You can modify the car to your tastes. 
• There are no mileage penalties if you drive a lot. 
• Your car expenses will be lower in the long run, provided you pay off the car and keep it for a while. 

Step 4: Consider other cars in the class

You might have your mind (or heart) set on a specific car or brand. But new cars are always hitting the showrooms in today's rapidly evolving marketplace, and one that you've never even considered could be right for you. Edmunds lets you research and compare similar cars to find the one that truly fits you best.

Even if you already have a car in mind, you should still review comparable vehicles in the same class or price range to make sure you haven't overlooked an even better choice. You can do this by choosing the same vehicle type, as listed in our car finder tool, and setting the parameters that are important to you. Once you settle on a worthy prospect, you can easily check for detailed information on pricing, specifications and features. You can also compare vehicles you chose to more easily contrast features and specifications.

If, on the other hand, you only know what type of vehicle you want — an SUV, for example — you can consult the corresponding "Edmunds best" section. It lists the highest-ranking vehicles we've tested in several categories. There are also Edmunds Top Rated picks, annual awards we give to the best of the best.

Step 5: Weigh the costs of ownership

Some cars may be cheaper to buy up front but more expensive to own in the long run. Even if two cars have about the same price, one might depreciate faster or cost more to insure and maintain.

Edmunds has a great evaluation tool, True Cost to Own, which presents depreciation, fuel, and maintenance costs in an easy-to-read format. It can help you make a smart decision up front that can save you thousands of dollars over the life of the car.

Step 6: Find cars for sale

The old method of car shopping had you walking from dealership to dealership in person to find out if they had the cars and options you wanted. Now, using the dealer inventory tools on Edmunds, you can quickly cover more ground and save money. Once you have chosen one or two cars that are right for you, you can easily see their local availability.

If you don't find what you want in your immediate area, select a greater distance to search. You can also filter your search to find cars in a specific color, with different options, or based on Edmunds' price rating.

Edmunds' inventory listings often display the market value of the vehicle, along with an overall grade of the price, from "great" to "high." Once you're ready to lease or buy, we recommend contacting a few dealerships to get price quotes since the discounts (or lack thereof) can vary from one retailer to the next. You'll usually hear back from the dealership via an email, text or phone call soon after you request the information. This is the time to verify that the car is in stock, schedule a test drive, and ask any additional questions. If you're not ready to complete the deal, make a note of which dealerships have the vehicle you want and contact them when you're ready.

Step 7: Set up a test drive

Now that you've found a car that seems like a good fit for you, it's time to call, text or email the dealership's internet department to schedule a day and time for a test drive. Internet salespeople are great allies since they cater to informed buyers and tend to be more upfront with pricing.

Making a test-drive appointment with your local dealership ensures that the car will be waiting for you when you arrive. We recommend test-driving about three different vehicles so that you don't limit your options. Try to schedule a few appointments back to back; it will make comparing the cars easier and give you a graceful exit from the dealership. While the salesperson will want to talk numbers after a test drive, you might not be ready, and having another vehicle to look at can give you an easy out.

Step 8: What to look for in a test drive

A car might seem to have all the features you want, but the true test takes place when you are in the driver's seat. You should test-drive the car the way you would drive it during your everyday life.

If you commute, try to find both stop-and-go traffic and highway speeds to approximate your time driving to and from work. If you trek to the mountains, head for a nearby hill to climb so you can test out the engine's power and efficiency. Drive over bumps, take tight corners, and test the brakes in a safe location.

Get in and out of the car several times, and be sure to sit in the back seat, especially if you're going to have passengers. Check out the cargo space. If you plan on using children's car seats, bring yours along to test for fit and ease of installation. Take pictures of the cars so you can reference them later.

While you are evaluating the car, don't be distracted. Take your time looking everything over. A good salesperson will respect your need to experience the car and will let you focus on the driving experience.

Turn off the stereo so you can listen to the engine's sound (or lack thereof in an electric model). When you return to the dealership, you can evaluate the sound system. If the conversation does turn to questions about whether you'd like to talk about purchasing or leasing, you can say that you're still in the test-drive stage.

Step 9: Pick your car

If the choice isn't clear after driving a few different cars, sleep on the decision. If you're still not sure, you might need to take a few steps back and find some more candidates. It's better to take longer in the shopping phase than have buyer's remorse later.

While making the right decision is important, it's also good to realize that there could be many correct answers to the question of choosing a car. Today's vehicles are safer than ever before. They get better gas mileage. They have amenities at a lower cost than in the past. In short, there could be several great cars for you, and the final decision is really a matter of individual taste.

Step 10: Time to buy or lease

Now that you've done research that we hope makes you feel confident you've found the right car for you, it's time to become a car buyer or lessee. Here are articles that will take you through the actual car buying or car leasing process, including brief refreshers of some steps:

• 10 Steps to Leasing a New Car
• 9 Steps to Buying a New Car
• 10 Steps to Buying a Used Car