Three Important Factors to Consider When Buying a Car
Obviously price is a starting point, but to help you narrow down your choices further, you need to focus on the following three factors: Quality, Cost of Ownership, and Reliability.
Let's take a look at each one, explain why they're important, and provide you with the best resources for further research.
Factor 1: Quality
Quality refers to the workmanship and durability of the car, its components and accessories over time. Cars that are rated high on quality will experience fewer overall problems such as paint peeling, rubber seals wearing, rattling noises, etc.
These days, many quality problems tend to occur on tech features, such as navigation, adaptive cruise control, reverse-parking assist, and telematics systems. J.D. Power's Initial Quality Study looks at the number of problems reported during the first 90 days of ownership.
It's important to note that redesigned or newly introduced vehicles will experience more quality problems during their first year of production than subsequent years. This is natural since manufacturers have to deal with unforeseen production glitches and errors. This is one reason I don't recommend purchasing a vehicle during its initial year of release, especially if you intend to keep the vehicle very long-term.
I recommend waiting until the second year of production before buying a new car - it will not only save you money, but you'll experience fewer quality problems.
Factor 2: Cost of Ownership
The long-term cost of owning a car is considerably more than the actual price you pay for it.
Ownership cost includes depreciation, fuel, maintenance, repairs, and insurance. The largest of these costs is depreciation - the loss in value over time. Foreign cars have historically held their value a little better than domestics.
ALG is a company that keeps track of resale values and provide awards for the best cars by segment. To get a good idea of the overall costs of a particular vehicle, I recommend you check Edmunds True Cost to Own values and CarEdge depreciation rankings.
With electric vehicles becoming more popular, it's worth noting they tend to have considerably lower ownership costs, not just because charging is less expensive than gas, but because a battery and the powertrain associated with electric vehicles have way less moving parts, and don't require things like oil changes.
Factor 3: Reliability
If you've ever owned a car that was always in need of repairs, then you understand why reliability is such an important factor.
The good news is that most vehicles nowadays are highly reliable. New car warranties cover at least 3 years or 36,000 miles, and some even go as high as 10 years/100,000 miles. Nevertheless, you still want a car that's going to be dependable.
Consumer Reports is a good source to check for reliability ratings. Each year, they survey about 500,000 car owners to determine which cars have the most reliability issues. Another great site is TrueDelta.com. They update their reliability ratings more often - every quarter instead of annually.
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid