Consider a Certified Used Car

• Buying a used car has become a lot less stressful in recent years, thanks largely to the certified used car program many dealers and manufacturers have implemented. As the prices of new cars fell out of reach of many consumers, manufacturers and dealers looked for a way to make cars more affordable, and these certified used car programs were one important strategy. Certified used cars are typically inspected by a mechanic, and they often carry warranties that are equivalent to those on new cars.
  
  The good news for cash-strapped consumers is that certified used cars often sell for thousands of dollars less than a comparable new car, even though the warranty periods are virtually identical. This can make a used car a smart alternative to a new one, and save thousands of dollars in the process. Cars that served as part of the dealership's loaner pool can be a particularly good choice. These cars are maintained by the dealer, so customers can be fairly certain that all scheduled maintenance has been done on time since the car was new.
  
  

Keep Your Loan Term as Short as Possible

• While three and four year loans were once the norm in the car buying world, high prices have led many consumers to opt for loans that stretch out over six, seven and even eight or nine years. While these longer loan terms can yield lower payments, they also yield thousands of dollars in additional interest payments over the years. Consider a purchase of a $20,000 vehicle. If it's financed over four years, you will pay $2,766 in interest over the life of that loan. If you opt instead for a six year loan you will pay $4,206 in interest, an increase of some 52%. Keeping your loan term as short as possible can save you thousands of dollars.
  
  It is also important to resist the urge to buy a new (or used) car based on what the payment will be. When negotiating the purchase of a car the bottom line should be the purchase price of the vehicle, not the monthly payment. Many consumers fall into the monthly payment trap and end up overpaying for their vehicle as a result.
  
  

Consider Total Cost of Ownership

• While the actual price of the car is the main consideration when negotiating the purchase of a new or used car, that initial cost should not be your only consideration. When purchasing any type of vehicle it is essential to consider the total cost of ownership, including the cost of maintenance, expected repair costs, the price of fuel and the depreciation the vehicle is likely to suffer over its useful life. That means looking at reliability ratings, used car vales and other resources. It also means calling your insurance agent before you sign the paperwork. The cost to insure a car can vary widely from model to model. The cost of insurance is even more critical since you will need to purchase both liability and comprehensive insurance if you are financing your purchase. Sports cars are notoriously expensive to insure, but many other cars come with hefty insurance bills as well. It is a good idea to narrow your search to several different models and then research the cost of insuring each one.