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    Buying Guide

    What to Know When Buying a New Car

    Navigate your next car purchase with confidence. Our car buying guide can help you to find safe, reliable models, understand car finance and insurance, and find car deals. Step one is to make sure that buying new or used is the right choice for you.

    Close up of a car's headlight with another car out of focus in the background.

    Photo: Getty Images

    Top New Cars Questions


    Should you buy a new, certified pre-owned, or used car?

    • Illustration of a sparkling new blue car with 4 dollar sign stickers indicating full price.

      New Cars

      Price factor Prices can evoke sticker shock
      Finance factor Lowest interest rate but greatest depreciation
      Reliability & History Highest owner satisfaction and reliabilty
      pros & cons
      • Full bumper-to-bumper warranty
      • Latest safety features
      • Higher insurance and taxes
      • Many hidden costs, including destination charges
      New Cars Ratings
    • Illustration of a slightly sparkling blue car with 3 dollar sign stickers indicating slightly less than full price.

      Certified Pre-Owned Cars

      Price factor Price premium over buying a regular used car
      Finance factor Elevated used-car interest rates
      Reliability & History Higher satisfaction and reliability than a regular used car
      pros & cons
      • Save money over buying new
      • Inspected, refurbished, warrantied
      • Selection can be limited
      • Still a used car
    • Illustration of a blue car with 2 dollar sign stickers indicating a discount from full price.

      Used Cars

      Price factor Greatest savings (sales price, taxes, insurance)
      Finance factor Higher loan interest rates
      Reliability & History Risk that the car is misrepresented. Best years are behind it.
      pros & cons
      • Massive selection
      • Can order online from services like Carvana
      • Private sales mean dealing with all the paperwork yourself
      • May have no or minimal warranty
      Used Cars Ratings


    How to make sense of car pricing lingo

    Here is a glossary of common finance and lease terms you'll encounter in a dealership’s finance office.

    illustration showing a car key attached to a tag with a dollar sign on it
    MSRP
    The manufacturer's suggested retail price is the price automakers recommend dealers charge for a new car. It is printed on the window sticker and serves as the starting point for negotiation.
    illustration of a calendar with a percentage symbol in the center
    APR
    The Annual Percentage Rate is the yearly cost of borrowing money to finance a vehicle, shown as a percentage. This includes interest and lender fees, and it may include broker fees to the dealership if the loan is arranged by them.
    illustrated pie chart with a quarter part separated from the rest and marked with a dollar sign
    Down payment
    This is money put down up front to reduce the balance that will be financed. For leases, this is often referred to as the cap cost reduction.
    illustration showing a set of car keys with a dollar sign tag imposed over a calendar background
    Lease
    Lessees pay to use a car for a set period, often with lower monthly payments than a traditional purchase, but the vehicle must be returned (or purchased) at the end.
    illustration showing destination marker with dollar sign imposed over a calendar background
    Residual value
    This is the vehicle’s projected value at the end of a lease. The lease cost is based on the difference between the MSRP, or negotiated price, and the residual value.
    illustration showing two cars silhouetted with an arrow looping through a dollar sign from one car to another
    Trade-in value
    This is how much the dealership offers for your current vehicle when using it to buy or lease a car. Check your trade-in value.
    Line graph chart showing downward trend with a silhouette of a car and a dollar sign in the middle
    Depreciation
    This is the vehicle’s value lost over time and miles, impacting resale and the true cost of a purchase.
    illustration showing a circular arrow pointing counter-clockwise revolving around a dollar sign
    Incentives and rebates
    Automakers and dealerships can offer various enticements to motivate buyers, such as discounted financing, cash rebates, and special programs for college grads or military veterans.
    illustrated silhouette of a car with a prize badge in the upper left corner
    Invoice price
    This represents what the dealer pays the manufacturer for a vehicle—in theory. But it doesn’t tell the full story. Buyers should focus instead on the average transaction price, which reflects what people paid for the car.
    illustration showing a silhouette of a car with a line drawn through it splitting it in half
    GAP insurance
    This protection covers the difference between what you owe on a loan or lease and the car’s value if it’s totaled or stolen.

    What you should know before going to a dealership

    • Couple walking around car dealership
      7 questions to ask before buying a car

      Finding the right car and then negotiating the best price can be a whirlwind experience. So what do people who have recently purchased a new car wish they had considered more carefully? See advice from our experts and consumers.

      Illustration: Heemin Yang
    • Cars at a dealership
      Should you buy a new, certified pre-owned, or used car?

      Our analysis shows that reliability and satisfaction vary significantly among these purchase strategies. Our experts reveal the key differences and provide exclusive advice backed by data.

      Photo: Tomasz Zajda/Adobe Stock
    • close up of hand holding car FOB, handing to another person's hand with blurred cars in background
      Why choosing the right car matters more than ever

      High transaction prices and market uncertainty might have you worried about your next car purchase. That’s why it’s more important than ever to choose a car that will be worth every penny you spend, and that will serve your needs for years to come.

      Photo: Getty Images
    • Woman smiling driving on a sunny day
      Best new-car deals

      Check out these CR Recommended cars with incentives. Each is a good, safe, and reliable car that can also save you money.

      Photo: Getty Images
    • woman at car dealer checking pricing on her smartphone
      Leasing vs. buying a new car

      Buying involves higher monthly costs, but after you pay off the loan, you own the car. Leases have lower monthly payments, but you don’t own the vehicle and can get caught in an endless cycle of car payments.

      Photo: iStock
    • Photo collage showing shaking hands over a car with writing and scribbles from the foursquare deal sheet.
      How to beat the four square and other dealership tactics

      We talked to former car salespeople to learn their tricks and asked our own experts for their advice. In this article, we let you know what sales tactics to look out for in the order you’ll encounter them, and the secrets of how to conquer them.

      Photo Illustration: Lacey Browne/Consumer Reports, Getty Images

    CR's Build & Buy Car Buying Service

    Consumer Reports members can access the Build & Buy Car Buying Service at no additional cost.

    Learn More about Build & Buy
    • Through this service, you can compare in-stock vehicles, see what others paid, and customize payments online.
    • Find the car you want and get up-front price offers online from local certified dealers.
    • On top of national incentives, CR members are eligible for additional incentives from select manufacturers.
    • Plus, you can get an instant trade-in value for your current vehicle to use toward the next car purchase.

    Everything you need to know about car insurance

    • Red SUV in bubble
      Best car insurance companies

      We highlight the top performers based on a national survey of more than 40,000 policyholders.

      Photo Illustration: Consumer Reports, Getty Images
    • Car insurance buying guide

      Here is everything you need to know about getting the right insurance at the right price.

    • a blue SUV wrapped in bubble wrap
      How to save big on car insurance

      Check our actionable tips to lower your premiums based on survey responses and expert advice.

      Illustration: Sinelab

    CR’s exclusive car buying tools