How to buy or keep a car in tough economic times

The news continues to get worse. The automotive industry is experiencing a meltdown, as consumer confidence and spending ability erodes. Yesterday's downer came from General Motors admitting that bankruptcy proceedings may be a real and near-term option without more aid. Now, the Bureau of Labor Statistics reveals that the national unemployment rate rose to 8.1 percent, with the total number of unemployed persons increased by 851,000 to 12.5 million in February.

It is hard to sell cars to people without jobs, disposable income, or desire to simply indulge. Consequently, February car sales plummeted, and there is no end in sight.

So, what should you do? Well, that depends. There are essentially two roles consumers can take: buyers and long-term owners.

Buyers are in the driver's seat, capable of finding a great deal from nearly any brand. As always, it is key to research the best car for your needs and budget, then focus on the deal. Don't be swayed by snazzy marketing campaigns. As we have shown, it takes more than a discount for an offer to be desirable – the car itself should be "good" as well. (Read "Best new car values: It's more than dollars and cents.")

And truly consider if buying a new car is the right move. Perhaps a late-model used car would suffice, saving money on the purchase that may either keep coin in your pocket or be put toward a model with even more crash-test protection and safety features. (Read: "Used car savings for savvy shoppers.")

ConsumerReports.org has a wide range of information and tools to help in choosing the right car, from the detailed model overview pages to our list of new-car Best Values (factoring owner costs and test scores). But, perhaps the quickest and easiest way to get started is with the interactive New Car Selector, a nifty online tool that allows you to narrow your search by the factors that matter most, such as car type, brand, fuel economy, safety, test scores, and price. When you're ready to buy, brush up with our comprehensive buying advice section, as well as read "How to buy a car in today's market" and "Car-buying tips for getting the best deal today."

Watching the dour headlines and negative employment trend lines should be a reminder to us all to make prudent automotive decisions. Buying a new car can help stimulate the economy, though sometimes the smarter decision may be to hold on your aging car for another few months or even years. Cars can last much longer than the typical ownership period, and they generally become less expensive to own after the first few years. (Learn how to make your car get to 200,000 miles.) You also have to consider your own household's economy as the first priority before you go out and single-handedly save the country. Think through the risks and benefits, and definitely do the research.

—Jeff Bartlett