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Step 1: Decide what you want or need in a car. Cars tend to be status symbols - expensive status symbols at that. If that is what you want and you can afford it, you probably aren't interested in my advice. However if you are willing to pass on impressing your neighbors and really want to save money, here are some tips.

Consider a used car. New cars are nice but expensive. Furthermore, most tend to lose value quickly. Those first few miles that change it from "new" to "used" also drastically reduce the price you can get if you sell it. Some claim that the price of a car drops 10-20% as soon as you drive it off the lot. That is probably an overstatement, but it does drop. And don't pay too much attention to that old saw about buying someone else's troubles when you get a used car. If you are careful you can take advantage of the people who just have to have something new and get a good vehicle at a good price. Studies show that in most cases it is cheaper to fix a car than to buy a new one.

I'll give some tips below for new cars if that is what you really want, but first let's look at buying used.

You can get a used car either from the owner or from a dealer. Dealers have to make a profit so in many cases it is less expensive to buy from the previous owner. However many dealers have started providing guarantees on late-model used cars which is an advantage if you are worried about reliability. If you go that route, be certain that the car you buy is really guaranteed, not just "certified." Some unscrupulous dealers have been known to certify that the car is in good condition, but to not guarantee it. That "certification" just ruins the good paper it is printed on. Read the guarantee carefully and be certain you understand just what it covers and what the dealer will do if there is a problem. Does it cover only the engine, the whole power train, or the entire vehicle? If there is a problem will they fix it in a timely manner in their shop? Many of those guarantees are in fact rather good, but check to be sure.

What if you buy from a private seller? You won't get the guarantee you might get from a dealer but you there are independent mechanics who will, for a reasonable price, check the car over and tell you what they think of it. Some will even guarantee to perform any repairs for defects they miss in that inspection. That at least gives you some security.

Of course on any used car you can check out some things, even if you are not a mechanic. Are the tires good?

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