From Fuel Efficiency to Insurance Coverage:
Purchase and Protect Your Car in a Tough Economy

By Rebecca Eve Schweitzer

No matter the time of year or state of the American economy, buying a car requires a certain amount of preparation and dedication. But with the economy down and gas prices up, it’s especially important to go into the process aware of all the considerations associated with buying a car – insurance, maintenance, and financing being the most common.

Do your homework before buying a car

Time Your Search Strategically
As the old saying goes, timing is everything. The best time of year to shop for a car is late summer or early fall when dealers are discounting last year’s models to make room for the new year models. The end of each month also is a good time to find a deal because salespeople are pushing hard to make monthly sales quotas.

Keep in mind that the retail price of a car is usually not the price you have to pay. Before you even think about going to the dealership, it's best to do some homework. The more you know, the easier it is to bargain with the dealer.

Your best bet is to figure out what options you need and want and then shop around on the Internet to learn about models and compare auto prices. Some great Web sites to visit include Edmunds, MSN Auto and ROAD & TRAVEL Magazine. These sites offer tools that allow buyers to customize vehicles and give insight to questions everyone should ask when shopping for a car.

Insure Your Future
Once you find the right car that fits your needs, wants and budget, you’re going to need to determine how to protect it – even before you buy. New York-based State Farm® agent, Linda Burchett, advises car shoppers to visit their insurance providers when they’re shopping for new cars and approaching other milestones such as getting married and starting a family.

“We’re there to help by providing sample quotes, identifying the proper insurance coverage and determining the right deductibles for each individual’s situation,” said Burchett.

Burchett urges car buyers to discuss coverage options in detail because driving with the minimum mandatory insurance is often not enough. Ask your insurance agent if you have the right amount of coverage to protect your assets and future.

Preparing a budget and making a list of needs can help in the buying process.

The early homework stage is the best time to think about car insurance, as rates can vary based on vehicle model, size, retail price and other factors. Smart shopping is just as important when looking for an insurance agent as it is when looking for a new car. In the age of well-advertised, quick-to-purchase insurance, a face-to-face relationship provides extra security knowing there’s someone right around the corner if you need them.

“You’re entering into a long-term relationship, so it’s important to find a company that gives you the service and convenience you need,” said Burchett. “State Farm has 17,000 agents who can provide service that is much more personal than a 1-800 number.”

One final tip to remember is to ask about insurance policy discounts. For example, State Farm offers discounts for good drivers. It also offers the Good Student Discount as well as multi-line discounts for customers who combine their auto with home, renters, life and other insurance policies. A higher deductible, the part of a covered loss that you agree to pay with your own money, may also allow you to lower the cost of your coverage.

To receive sample auto quotes for a certain vehicle, visit your local agent or go to statefarm.com®.

Make a List of all New Vehicle Ownership Costs
After determining the car and insurance policy, remember to factor in other expenses that will affect a vehicle’s purchase price, including maintenance, fuel efficiency and financing costs. Within each of these categories, follow the guidelines below to stay ahead of the game:

1. Be sure to fully understand the vehicle warranty details. If the car requires special parts or services, the costs for repair can jump dramatically. If you’re buying a used car, find out its history through websites like Carmax.com.

2. Use a reputable dealer that inspects used or leased vehicles bumper-to-bumper before reselling them. Some even offer used vehicle warranties.

3. In addition to pricing your vehicle of choice and selecting the options you need, you should visit automakers’ websites to find the average miles-per-gallon for each of their vehicles. This step will help you budget monthly gas costs.

4. If you prefer or require a larger vehicle, purchasing one that gets low mileage and costs an arm and a leg to fill up isn't necessary. With so many hybrids available today, and more on the way, it’s easier than ever to find a fuel-efficient vehicle that suits both your lifestyle and budget, while contributing to the reduction in global warming.   

5. Understand what you are buying, including the financing fees, which can fluctuate based on credit history. The price of the car may sound affordable but the financing could raise the car’s price a lot.

6. Know your credit history before visiting the dealership so you know what kind of rates to expect. If you have excellent credit ratings, make sure you’re getting a better-than-average interest rate. Some dealers are even offering zero percent financing right now to move 2008 models off their lots. Don't accept the dealership's financing as the final word. Consider other options available through your local insurance agency or bank.

Bring support to the dealership

Plan Ahead and Bring Support
Once you get to the dealer, there’s still more to consider. For example, if car buying intimidates you, don't be afraid to have someone tag along or get the vehicle inspected by an auto technician. A reputable dealer will permit your own mechanic to have a look under the hood. Be wary of those dealerships that won’t allow this as they may have something to hide. Having another pair of eyes can help you make a sound judgment. It’s your money so ask all the questions you need before making a final decision. Remember, you’re in control of the sale, not the dealership.

Once your budget is set, stick with it and be prepared to negotiate. Don’t be afraid to walk away if the deal isn’t to your liking and don’t let a salesperson talk you into a purchase you either don’t want or can’t afford. Once you’ve confirmed your budget, stick with it, which will enable you to make the right decision to secure your investment and future.

“One thing I tell women when shopping for a new car is not to get caught up in the emotions. Be careful not to fall in love with a car, or at least show that emotion in front of salespeople because they tend to play on your emotions to reel in the deal. Keep in mind that there are other cars and dealerships with deals to be had. In a slow market, you hold the upper hand,” Burchett said.  

Car buying may sound like work, but in today’s economy, smart spending is a must. A great deal is within your reach – if you are prepared. Before you know it, you’ll find yourself in a place where “I don’t know where to start” meets “It's all coming together.”