Comparing vehicles
Now that you have a list of your needs, it's time for more research. There is an awful lot of research, isn't there? There are thousands of models to choose from. But your needs should help narrow them down fairly quickly.

Auto magazines are a great place to get less biased information about particular models and the advantages/disadvantages associated with them. Consumer Reports is a very thorough publication with a reputation for bias-free reporting.

You can also get a lot of information from the manufacturer's Web site and literature, but stick to the facts they provide since much of the material will be heavily biased.

Dealerships are often the worst place to get information. They have a lot of material, but it is very heavily biased and you may have to endure a strong sales pitch just to get simple information. If you visit the dealership when they are closed, you can look at the cars and read the information on the vehicles without worrying about the salespeople.

Great sources of information are your friends and family or even strangers. Find others that have owned the model you are interested in. Ask about their experience with it.

Take special care in buying a first-year model, meaning the first year a manufacturer produces a certain model of car. The first year is a time to iron out the kinks and you may become an unwilling guinea pig and have unforeseen problems that the manufacturer will correct for the next year's model.

The test drive
You've compared numbers and features. You've checked into the gas mileage. Now it's time to put away all the theory and speculation and get to the point of choosing a car and how it drives.

You have to focus when test-driving a car. If you go to a dealership to test-drive cars, make sure the salesperson gives you some space to make your decision. As a matter of fact, tell the sales team you have no intention of buying on that day. They should leave you alone long enough to test-drive without distraction. If they don't, be sure to avoid them when you're going to actually buy a car. If they get too pushy, go to another dealership for your test drives.

If you're not comfortable with visiting dealerships just for a test drive, try renting the cars you are interested in. It may cost you $100 to try out your top favorites, but you're paying for the freedom of driving a whole day without listening to any sales pitches.

Compare the dealerships
Shopping for a dealership is just as important as the other comparisons you have been doing. It can help you save a lot of money AND ensure that you receive some customer support while you're still under warranty. All dealerships pay the same price for the cars in the beginning, but don't let them fool you. Dealerships with better CSI ratings (Customer Service Ratings) often get better bonuses that allow them to offer you a better price.

Scoring a Good Deal
Are you ready for a little dancing? If you think of the negotiating process of buying a car as a dance, you'll find it a lot more tolerable and you might possibly enjoy it. It's just two people suggesting and redirecting. And remember - you have the advantage. You've got a long line of salespeople that would like to dance with you. If one isn't a good dance partner and isn't working with you to nail down a price, feel free to say, "Good night," and find yourself another dance partner.

Know your opponent/dance partner
Another good tip before you start: dealerships try to average a specific amount of profit on each car they sell. People that pay too much allow room for others to pay less. With some preparation and education, you can be one of the latter.

Dealers will pressure you to make all your decisions in a single day. They've been doing this for a long time. They have all the scenarios mapped out. So when they react, they're acting with experience. For you, it's probably unfamiliar territory so that when you react, you may be acting with emotion. Dealers and salespeople know how to use that to their advantage. So slow the process down, sleep on decisions overnight and it could save you quite a bit of money.

Also, the more proactive you are and the more you take control, the better the result. Educate yourself. Understand how the car business works. Know what price the dealer paid for the car and have some alternate financing options.

Know every option that's available on the car you're interested in. Do you need them or not? If you don't need them, don't let the salesperson sell them to you. Speak the technical talk. Show you're a person who knows what they're talking about and you can skip a majority of the song-and-dance numbers the salespeople bring out for the clueless.

Knowledge is power. So come in with a head full of knowledge and you'll shock the salesperson with how well prepared you are.

On the dance floor
When you arrive at the dealership, realize that you have a choice. First impressions are usually a very accurate sign of things to come. If you don't like the salesperson right off the bat, why waste your time? Feel free to walk away at any time and go to another dealership. However, if you have a limited number of dealerships in your area, you may want to wait to pull out this move until the negotiations break down. Some strong negotiation moves and redirects can help you come out ahead.

Keep a neutral outward attitude. Don't sell yourself. If you give the impression that you could take it or leave it, a salesperson will work harder and be willing to give more to sell you.

Avoid financing questions. Even if you don't have the money, tell them you're paying cash. They won't hold you to it. But it will force them to concentrate on the current price negotiation and not see a long-term strategy to inch up their profits.

Be prepared to haggle back and forth for a while. The salesperson might try to tire you out with a prolonged negotiation session. Don't give in. Stay strong and save money. Keep in mind an extra hour of persistence could save you a few hundred dollars.

Watch for the good cop, bad cop move. The salesperson will tell you that he or she really wants to give you the price you're asking for, but he or she will have to ask the manager. You may feel like the salesperson is on your team at that point. Just remember who signs their checks. It's you vs. them.

Here's a power move. Ask to see the invoice. If they are dead-set against showing you the invoice, there's a reason why. They're probably offering you a bad deal.

Shop for a car later in the month for additional savings opportunities. There are a lot of bonus and rebate programs based on monthly sales quotas. If a salesperson or dealership is short of meeting goals at the end of the month, you might find more willingness to sell the car cheaper in order to get the extra sale.

There are some no-haggle dealerships, such as Saturn dealers. If you are really opposed to the negotiation dance, head there. The dealership is still making the same average profit on each car but there's no way for them (or you) to use bad negotiators to an advantage.

Let's talk price.
Before you talk price, there are some terms you should know:

Invoice Price
This is the wholesale price the dealer paid the manufacturer before any rebates or incentives. Do some research on this amount. If you can find out what the dealer paid for the car, you'll know what the profit is on each car. Then you're ready to strike a compromise between letting the dealer make a living and getting a good deal for yourself. The Internet is a great source for this information. Use it to decide on a number you're willing to pay. Print out the invoice price when you find it and bring it with you to the dealership for back-up.

MSRP - Manufacturer's Suggested Retail Price
Also called the "sticker price," this is the number on the car window. Don't pay this! It's just a starting point for negotiations. If the model you're interested in is in high demand, you probably won't get much lower than this number.

Dealer Incentives
Manufacturers sometimes give dealers extra money, bonuses and rebates for selling overstocked and undersold cars. Find out if the car you're interested in buying has any dealer incentives attached to it. Then subtract that amount from the price you're willing to pay.

Holdback
The manufacturer often gives money to the dealership to help reduce operating overhead expenses - the cost of running the dealership. It's often 2% to 3% of the sticker price. This information may not be very helpful in the negotiations, but if it comes up, you'll know what it is.

Sales Tax
The sales tax is the same tax that's charged on everything from candy bars to umbrellas. However, don't try to go to a different county to avoid a higher sales tax. They charge it based on the county you live in, not where you buy the car. This cost, of course, is non-negotiable.

OK. The big question: How much should you pay? Remember, this is a dance, not a science. So there is definitely no right or wrong answer. Offer somewhere around $200 more than the invoice price minus any dealer incentives. You probably won't get the car for that little, but it shows you know the playing field (or dance floor) and you're prepared to negotiate.

Beware of the add-on
The dealer will probably offer all kinds of add-ons after you've negotiated the price. The dealer makes extra money on almost every single one of them. You may find add-ons are included as if you have no other choice. You do. Feel free to refuse them. It will help if you know what these add-ons really are:

• Destination Charges - Some manufacturers charge separately for shipping the vehicle to the dealer. You can't get around this. But check the sticker to make sure it wasn't already included in the price.
• Licensing and Registration Fees - These are necessary, but call your state's Department of Motor Vehicles to make sure the dealer hasn't padded this price.
• Extended Warranties - These are also called service contracts. Just buy a car with a good service history and an extended warranty should be unnecessary.
• Dealer Prep - Part of a dealer's job is to get the car ready for you and it's one of the things the dealer gets paid for. Don't pay this twice.
• Credit Insurance - This insurance will pay off your car loan should you die while leasing it. As long as you have life insurance, this also is unnecessary.

There are many other fees that may be added. Ask directly what each one is for. If it seems unnecessary, it probably is and you should refuse to pay it.

When it seems as though a price compromise is inevitable, ask for more. Ask to throw in the floor mats. Ask for some small extra you want on the car. You won't get it if you don't ask. So what do you have to lose?

The final steps
Now you've negotiated a price. Whew! You're almost finished. Before you sign anything, make sure the amount you have agreed to pay matches what you decided you could afford. Be sure to include the financing. Also, estimate the number of miles you drive in a month, divide that by the estimated miles per gallon of the car you're about to buy. Then multiply that times the price of a gallon of gas. Add that amount to your monthly payment.

The dealer will want you to drive the car home that night. Don't do it. Give yourself a day to cool off. Go home and immediately call your insurance agent to get a quote for the car you just bought. Then add insurance to the monthly payment and monthly gas expenditure to make sure it still fits in your budget. If it's close, you can fiddle with your budget and trim expenses to make it fit. But be realistic.

And if it doesn't fit - you can't buy the car. Don't make any exceptions here. You will do great damage to your financial future if you buy a car you can't afford. You may have invested some time into the negotiation process, but don't feel bad. Think of it as practice for the next round.

Auto Insurance
Insurance is as much of a necessity of owning a car as gas. You just can't do without it. As a matter of fact, most states won't even let you register a car without proof that you and the vehicle are insured, which is just as well. You're probably a fantastic driver, but there are plenty of people out there who are terrible drivers. And if one of them hit you, you'd be glad if that person had insurance to cover the damage. And if somehow you caused the accident? Well, you'd be even happier to have insurance. Insurance isn't about what you can afford. It's about what you can't afford.

What is insurance?
Insurance is almost a reverse gambling. You keep putting money in a pot to avoid hitting the big jackpot - an expensive accident settlement. An insurance company adds up all the accident claims it expects to pay, and divides that amount between all the people that pay into the insurance pot. Of course, each insurance customer isn't charged equally. Your rates are determined by how likely you are to have a claim. That is determined, fairly or unfairly, by basic demographic and driving statistics - statistical risk factors.

Where do rates come from?
Your rates depend on three things: who you are, your driving history, and how extensively you want to be covered. More specifically, the following factors have a great influence on your rates:

Gender
Men have more accidents on the road than women. It may be that men are more aggressive drivers. Or maybe they drive more than women. Insurance companies don't care why. They just look at the claims data. If your gender gets in fewer accidents, you pay less.

Age
Drivers under 25 (and, for some insurers, under 30) are considered at higher risk of having an accident. So get older and lower your rate!

Marital Status
Married drivers tend to have fewer accidents than single drivers. Maybe it's because they have another person to think of. Maybe it's because there's a spouse complaining about poor driving habits. Again, it doesn't really matter. If you're single, you'll pay.

Personal Driving Record
Years of driving experience, accidents, speeding tickets, and drunk-driving offenses are all factors in determining how much of a risk you pose as a motorist. Some think that if you've had an accident, you pay more to cover the insurance company's cost of paying your claim. However it's actually that statistically those who have been in an accident are more likely to get in another accident.

Vehicle Use
Commuters are at greater risk than those who only drive for errands or recreation. Those who use their car for business pay higher rates.

Type of Vehicle
Larger, heavier vehicles are considered at lower risk than smaller, lighter ones. More expensive cars are costlier to repair than economy models. Sports cars are higher risk than other cars.

Size of your Deductible
Bigger is better. Larger deductibles reduce the chances of an insurance company paying a claim on your behalf. In return, you receive a lower rate.

Type and Level of Coverage
There are many different types of coverage and coverage limits. The fewer claim scenarios that are covered by your insurance, the lower the rate.

Types of insurance
There are so many variables with insurance that the best way to find out which is right for you is to ask your agent. Understanding basic coverage options will help you work together with your agent.

No-fault Insurance
Some states are no-fault states and some are fault states. You don't have a choice on this one - it depends where you live. No-fault insurance bypasses the conventional legal procedure that finds fault in an accident. No lawyers, no court, no judge, no jury to prove the accident was the other person's fault. It saves on taxpayer legal bills and helps keep rates down because it reduces the amount of legal fees an insurance company pays. If you are in an accident, your insurance company compensates you. They will go after the other driver if possible. Claims over a certain dollar amount, however, automatically initiate legal action.

Fault Insurance
If you live in a fault state, you will be required to prove that you have financial responsibility, or, the ability to pay for any damage or injury you may cause. You prove your financial responsibility by either fulfilling the state's minimum insurance requirements or providing documentation of your financial means to pay for such amounts.

Uninsured Motorists and Underinsured Motorists
If you are involved in an accident with someone who can't pay for the damage or injury caused, your insurance company will pay all your claims or the difference between your damages and what the other person's insurance covers. These policies protect you against damage costs including lost wages, medical bills, pain and suffering.

General Liability
This is the coverage you want everyone else to have. If someone causes damage to your property or causes you injury, that person's insurance will cover it. It also covers damage you may cause to other people's property and injuries to the people themselves. Additionally, general liability offers protection from lawsuits. Be aware that state minimum standards are often much lower than you actually need. If someone is seriously injured, medical bills can be in the hundreds of thousands. Consider getting higher liability coverage to prevent being underinsured.

Collision
Collision insurance reimburses costs related to repairing damages to your car due to an accident. It usually covers you even when you drive a rental or someone else's car. Often this type of coverage is required to lease or get a loan for a car.

Comprehensive
Incidents other than collisions are covered by comprehensive. That usually means fire and theft, but can also include natural disasters, riots, explosions or falling objects. This is also required for a lease or a loan.

Medical Payments Insurance
If you're in an accident and need to be taken to the hospital immediately, you're covered for hospital and doctor bills or, if it was a very serious accident, funeral expenses. This overlaps with health insurance, so ask your insurance agent exactly what you need.

Personal Injury Protection
PIP policies cover medical charges not covered by the Medical Payments Insurance - lost wages, child care that you are unable to perform, etc.

Other Coverages
There are many other types of coverage you may or may not want including towing, labor, temporary replacement vehicles, etc. Talk these over with your insurance agent to see which are right for you.

Ways to save on insurance

Comparison Shop
Price can vary by hundreds of dollars from company to company. Ask your friends about their insurance agents. Research rates on the Internet. Get at least three different quotes before you choose an insurance company.

Keep in mind, insurance is more than price. You also want excellent service. Ask agents what they can do to lower your costs. If they lower it a lot, they're probably very customer-service oriented.

Raise your Deductible
Your deductible is the amount you pay out of your pocket before insurance kicks in. For example, if you have a $500 deductible and someone slashes your tires, you probably wouldn't file an insurance claim for that loss since the cost to replace your tires is most likely pretty equal to your $500 deductible. So if you had a $500 deductible and someone slashed your tires, you probably wouldn't claim that since the cost of replacement is less than your deductible. Higher deductibles on collision and comprehensive (fire and theft) can reduce your rate considerably. But However, check your budget before agreeing to any deductible amount. You don't want a deductible that's so high you can't afford to pay it when you have a claim.

Drop Collision and/or Comprehensive on Old or Cheap Cars
If your car is worth less than $1000 or so, you'll be able to save the $1000 to replace your car in no time by not purchasing collision or comprehensive insurance.

Buy a Car That's Not in Demand
If thieves have a special interest in the type of car you buy, the rates will be much higher for that car. Pick a car that gets stolen less often and you'll get a much lower rate.

Take Advantage of Low Mileage Discounts
This one's simple. Drive less, pay less. Take the bus. Get a job near your home.

Move Out of the City
The city has more congestion (chance of accident) and crime (chance of theft). Reduce the risk and reduce your rate by moving to the suburbs or a rural area.

Equipment Discounts
Some equipment in a car can reduce the risk of accidents and lower the amount of claims. So if you purchase a car with automatic seat belts, airbags or anti-lock brakes, you'll save money on insurance.

Multiple Insurance Discounts
If you have other insurances, such as home or life insurance, with the same insurance company or multiple drivers on the same insurance policy, you could qualify for a discount.

Inquire About Other Discounts
Some insurers offer discounts for such things as no accidents in three years, drivers over 50 years of age, driver training courses, anti-theft devices and good grades for students. Talk to your agent to find out what special discounts may apply to you.

Down the Road
Well, now you've got the car. Hopefully you negotiated a good deal. But buying a car is just the beginning. Now you have to take care of it. If you don't, you'll end up spending much more than you saved.

Maintenance
The best way to avoid major repair costs is with general vehicle maintenance. Early diagnosis of a problem is almost always less expensive than waiting until it can no longer be ignored. For example, if the brake pads need to be replaced, do it sooner rather than later. If you wait until you hear a loud grinding noise and your car doesn't stop very well, you've probably ruined your rotors. And that's expensive.

Even though you want to keep your car running smoothly, don't over maintain it. Replacing something the second it makes a noise can get very costly and very wasteful. Follow the maintenance guide in your owner's manual. It will keep your warranty valid and ensure you don't over-maintain your vehicle. Also, keep all maintenance and repair records including date, mileage and amount paid. This will help you when you sell the car, since you are able to show a history of consistent maintenance.

Repair shops
You should be even pickier about choosing a repair shop than you were about choosing where to buy your car. It's a much longer relationship. Ask friends and family for some recommendations. You want a repair shop that has high-quality work, but won't rip you off with extra charges, unnecessary repairs, substandard parts, etc.

Often a dealership charges up to double the price of other shops. If the repair is covered under warranty, go to the dealership. Otherwise, you'll probably want to go elsewhere unless you can't find a repair shop you trust.

On every repair job, get a second or even third opinion. Price and repair suggestions may be very different.

Oil changes
It is suggested that you get an oil change every 3,000 miles. But if you check your oil level and add some oil whenever needed, you could get by without an oil change for another 2,000 miles.

Just remember - oil is to a car as water is to a horse. If it runs out, it dies. The engine will be destroyed.

Dust, dirt, heat, cold and city driving accelerate the need for an oil change. You never need to change your oil before you reach 3,000 miles, but never go longer than 7,500 miles.

Tune-ups
Get a tune-up every 30,000 miles or so. Your owner's manual usually recommends the following:

• Replace the fuel filter
• Replace the air filter.
• Change the spark plugs.
• Check the fan belts, replace if worn.
• Check the fluids (transmission fluid, oil, wiper fluid, coolant, etc), and replace/refill if necessary.
• Replace the positive crankcase ventilation valve, which, if clogged, will cause your car to stall.
• Check the battery, add water if necessary, clean cables and terminals.

At 50,000 miles, you should have another tune-up with all of the above procedures plus check the brakes and tires, and begin checking for rust. At 100,000 miles, do all of the above, escalating the search for rust, check the alignment and have a mechanic check the engine's compression and hoses.

Winterizing
When winter approaches, if you live in a climate where it freezes, you'll want to "winterize" your car, which involves the following:

• Replace the coolant.
• Replace your wipers, and make sure you have enough wiper fluid.
• Check the battery.
• Check the lights, heater, and defrosters.
• Check the brakes.
• Keep an ice scraper and emergency supplies such as flares, blankets and tools in the car.
• Don't let the gas tank fall below ¼ full, to prevent moisture from freezing in the gas lines.
• Check your tires. If they're bald, replace them, and if they're under-inflated, give them some air. The ideal tire pressure should be specified on the tire itself.

Tires
Watch for uneven wear, leaks and tread depth. Under-inflated tires wear faster and more unevenly, wreaking havoc on things like alignment and gas mileage. The treads on a healthy tire should be more than 1/16th of an inch deep. A good test is to place a penny into the tread, and if at least part of Lincoln's head is obscured, the tire is fine.

Washes
Salt, sand and other chemicals used on roads during the winter will eat your car alive if you're not careful. The remedy? Wash it - often. And don't forget about the undercarriage. Even though your car may have a finish that resists rust and corrosion, the undercarriage is still vulnerable to the elements. If you don't take care of it, your car could have a beautiful finish on the outside, but be hollowed out from underneath.