So before you cruise into the car dealer's showroom, check under the hood of your credit. Get your credit report, make sure it's shiny and clean just like that new car you're eyeing, and you will have the credit score you need to negotiate a lower interest rate on your loan.



If your credit report has a few bumps and scratches on it, do what you can to address any issues with your report. You'll be surprised at how much you can save on your car payment every month.

What can you afford?

Before you shop, you need to make a budget so you know what you can comfortably afford.

Look at the price...your down payment...your insurance premiums... gas costs...and if you need the extras like satellite navigation or leather seats. You should also look at your debt-to-income ratio to ensure adding a new car payment every month won't be too hard too handle.

Should you buy new or used?

Aaaahhhhh, there's nothing like that new car smell. On the other hand, some could argue that an air freshener in a previously-owned vehicle smells just as nice (mostly because it's about $4,000 cheaper). When debating whether or not you should go new or used, consider this...

Depreciation-New cars lose about 25% of their value each year. When you buy used, you don't have to worry as much about depreciation.

Costs-New cars not only have a higher price, they also require higher insurance premiums. While used cars are lower in price, you have to think about maintenance costs of an older car. Also, you may be able to get better financing on a new car.

Reliability & Warranty-The warranties on new cars give owners the luxury of extra peace of mind. Many used cars do come with limited warranties, but they're still not as good as what you find with new cars.

In most cases, the question of new or used is answered by what best fits your budget. Make a financially sound decision. You can always get that dream car next time around.

Is it better to buy or lease?

Leasing might be best if you prefer to drive a new car every two or three years...if you don't drive more than 12,000 to 15,000 miles each year...if you can't afford a large down payment...or if you don't put a lot of wear and tear on your car.

Buying is probably best for you if you plan to pay off the vehicle... drive more than 15,000 a year...don't mind paying for repairs after the warranty is over...or like to customize you car.

Buying a car doesn't have to be a fast and furious decision. Sit down, think it through and you'll get the vehicle that's right for you.