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Bottom Line Up Front

  • Consider your budget and needs as well as the features, vehicle history, warranty, maintenance and insurance costs of the car you’re looking to buy.
  • Planning ahead for your new car will ensure you can afford the monthly loan, insurance and upkeep costs.
  • Things like your credit score, car model and warranty will affect how much you’ll pay for a car overall. 

Time to Read

6 minutes

July 29, 2022

Buying a car is exciting! It’s a big decision, though, so you’ll want to be prepared with all the knowledge up front to get the right vehicle without making any wrong turns. Get started by finding answers to these 10 questions before buying a car.

  1. What’s My Budget?

    Your first step should be to identify your budget based on how much you can comfortably afford to pay for car expenses each month. Check out our car affordability calculator to see how your down payment, trade-in value and loan term can affect your monthly payments.

    Look at the big picture beyond the purchase price of the vehicle—the total costs of buying a car also include dealer fees, sales tax, and auto registration and title fees. Plus, you’ll need to pay for ongoing expenses such as insurance, maintenance and fuel, which can vary widely based on the age and type of vehicle you choose.
  2. Should I Buy New or Used?

    If you’re on the fence about buying new or used, do some research to compare the benefits and risks of each. One of the perks of buying new is having peace of mind knowing the vehicle history starts fresh with you. Most new vehicles come with warranties, which means you probably won’t have to worry about the cost of repairs—at least, not right away. Plus, if you’re financing the vehicle, you may be able to get a lower rate on a new vehicle loan.

    However, new cars are more expensive, and their value decreases significantly in the first year of ownership. Buying used tends to be more cost-effective, but there’s a greater chance you’ll have to deal with mechanical issues. When buying used, always have the car inspected by an independent, certified mechanic prior to purchase to confirm the condition. Check trusted online resources for trade-in and retail values of used cars.
  3. How Will I Use the Car?

    Finding the right car starts with a thorough consideration of your needs. Will you be driving a long commute to work or taking road trips? Will you use the vehicle to shuttle kids to activities or haul sports equipment? Do you need it to fit into tight parking or garage spaces? Do you need four-wheel drive or all-wheel drive options for off-roading or handling difficult terrain or road conditions? Are you considering hybrid or plug-in electric models?

    Think about the relative importance of features like fuel economy, cargo space, performance and passenger seating options. Giving some thought to how your needs might change can help you choose a vehicle that will fulfill your needs for years to come.
  4. What Technological Features Do I Want?

    There’s a lot to love when it comes to the technology available in recently built cars. Some of the latest models have self-parking technology and connected mobile apps that allow you to remotely lock doors and check tire pressure from your smartphone. Newer cars have 360-degree cameras and crash avoidance features, such as auto-emergency braking, forward collision warning and blind spot monitoring. Make a wish list of features you want and break it down into “non-negotiable items” and “nice-to-have features.”
  5. What’s the Vehicle’s History?

    If you’re purchasing a used vehicle, always get a vehicle history report to verify mileage and check for past damage. Using the vehicle identification number (VIN), these reports can tell you whether the car has been reported as being damaged in a crash, flood or other manner and what repairs may have been made. You can learn more about a vehicle's history with a CARFAX Vehicle History Report™.1
  6. What’s the Warranty Coverage?

    A good warranty offers a lot of protection against future repair costs. When making your purchase, find out exactly what’s covered and for how long. A warranty with “bumper to bumper” coverage for a limited time (e.g., 3 years or 36,000 miles) typically covers the parts and labor needed to fix your car. However, not everything is covered. Wear-and-tear parts like tires, wiper blades, brake pads and light bulbs are usually not included.

    A powertrain warranty covers the parts that make the car move, including the engine, transmission and drivetrain for a set timeframe or number of miles (e.g., 5 years or 60,000 miles). Some automakers offer extended powertrain warranty coverage for up to 10 years or 100,000 miles.
  7. What Will the Maintenance Costs Be?

    Some cars cost more than others to maintain, and it’s not something you’d usually think about until it’s time for regular maintenance. Maintenance costs vary by make, model and even year. And, all the digital components in cars make it increasingly complex for even the smallest tasks (e.g., replacing a taillight).

    You might want to compare the cost of parts and tire changes for different vehicles, so you know what to expect. You can find a lot of this information on automotive websites, by talking to your mechanic or by seeking out other owners of the same vehicle and asking about their experience.
  8. How Much Will It Cost to Insure the Vehicle?

    Don’t let the cost of auto insurance take you by surprise. A number of factors may influence your auto insurance rates, including your age, marital status, place of residence, driving history and credit score. The age and type of car you drive can also affect your rate—the more expensive the car, generally, the more it costs to insure. However, other factors such as safety ratings and anti-theft features can bring down the cost.

    Call your insurance company to find out how much the car you’re considering will cost you in insurance premiums. If you’re in the military, you and your family may qualify for a discount on auto insurance. 
  9. How’s My Credit Score and Credit History?

    Your credit history can make a difference in the costs you end up paying for a vehicle. Having a good credit history and excellent credit score can help you get the lowest rates on auto loans and also save money on auto insurance.

    Before you go shopping for a car, check your credit report. You can get a free report at You can work on boosting your score by paying bills on time and keeping credit card balances low (so you’re not close to reaching your credit limit). It can also help to keep old credit cards open, so it shows you have a longer credit history.
  10. What’s the Best Option for Financing?

    You shouldn’t feel rushed to apply for dealer financing without comparing all your options, including credit union financing. Auto manufacturers sometimes offer low interest rates that can seem pretty attractive. However, sometimes that means giving up a rebate that can lower the total cost of the vehicle.

    Also, make sure you’re comparing the total costs of financing the car—not just the monthly payment amount. You can use this car financing calculator to run the numbers yourself and find out if the car loan interest rate you can get from your credit union is a better deal. Doing your research could save you hundreds or even thousands of dollars on auto financing.

Next Steps Next Steps

  1. Start your car-buying process by building a sensible budget. Consider your monthly income and expenses to determine how much you can comfortably afford to pay toward an auto loan, car insurance and maintenance each month.
  2. Narrow down your car options by determining what your car needs are, whether you want a new or used car and what kind of features are non-negotiable. Then, look into some models’ safety ratings and history, if they’re used. 
  3. When it’s time to buy, contact Navy Federal to explore auto loans with great interest rates and compare your total costs.



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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.