by Scott Allison

Created on: December 21, 2008   Last Updated: January 06, 2009

One of the biggest investments a person will make is buying a new car. With some prices being almost one third the cost of a new home, it's important to research the many options available before making any kind of final decision. There are also some questions to ask yourself before committing to several years of payments.

The first question is why buy a new car? You could probably save yourself a bundle of money by purchasing a slightly used vehicle and be just as well off. For most people, a new car is a sign of prestige or a symbol of the image they like to uphold. For others, it's the appeal of reliability, safety and technology that draws them to a new car. Very few used cars are offered with the kind of warranty a new car comes with. There are some warranties now that are bumper to bumper with 100,000 miles of coverage. There are always restrictions on all warranties, but that's a huge amount of coverage considering most vehicle owners won't even put 100,000 miles on a car before deciding to trade it in. There have also been remarkable advances in safety and technology of new cars over the last couple of years. So, buying new definitely has it's advantages as long as you don't mind paying for all of that new technology.

Before you commit to buying new, though, you may want to examine your financial situation. Do you have good job security? Is your marriage on stable ground? Is your driving record in good shape? All of these questions come to mind as they will impact your decision once you've made your choice to buy new. Taking on a payment book, you'll be ultimately responsible for, may not be such a good idea if any of the above questions can't be answered without a shaky response. If you lost your job, how would you make the payments? If facing divorce, who will retain possession of the car and who will have to make the payments? And if your driving record is weak, how much will full coverage insurance cost?

Once you feel comfortable that your lifestyle will support buying a new car, you need to investigate your finances to see if your bank account will stand behind you. It's estimated that you will need to budget 20% of your net earnings to afford a new car, meaning after taxes, a car payment would require almost a quarter of your income. You'll then need to know how much of a down payment you can afford and how much of a monthly payment you could make on your new car financing.

With all of that said, and you're ready to research your new car, let's

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