What Car Should You Buy in 2023? Here’s What To Look For
Now more than ever, the options are endless when it comes to choosing the best car for your needs.
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Should you purchase a new or used vehicle? What about prioritizing gas or EV models? How do you know what car to buy this year and the best way to get your money to go the furthest with this purchase? Here’s what to look for if you’re planning to buy a car in 2023.
What Kind of Car Should You Buy?
The answer to this question depends on your lifestyle now and in the near future. Mark Holthoff, senior editor, content at Carvana, recommends assessing your expectations and goals with your life for as long as you plan to keep the car.
Here are some examples of different lifestyles that require different vehicle makes and models:
Parents planning to have four or more kids will need a car with third-row seating.
Owners of boats should look for cars with towing ability.
Drivers living and working in metropolitan cities where parking can be difficult will likely invest in small vehicles.
From here, Holthoff said you can start narrowing down your options. Look for vehicle subcategories that meet your needs and wants. Research the vehicle afterward by checking Consumer Reports, online and magazine reviews with initial test drives and long-term tests.
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By now, you might be looking at just a few vehicles. Renee Horne — chief marketing and customer experience officer, Chase Auto — recommends scheduling appointments to test drive any car you’re thinking about buying. During your test drive, Horne said to carefully look at the condition of the car’s interior and exterior, the layout and appearance of the dashboard and any additional tech features where you’ll need a walkthrough. If possible, simulate your daily driving conditions into the test drive. Horne said this may include bringing along car seats or other equipment you keep in your car daily.
Once the test drive is complete, Horne recommends asking about the car’s warranty and maintenance requirements. Ask if it’s possible to get an extended test drive or bring the car to your own mechanic for a second opinion.
How Do I Find Deals?
There are a few approaches you can take if you’re trying to find the best possible deal on your car purchase.
Shop at a Dealership
Car shoppers seeking good deals may consider multiple vehicles and shopping around at several dealerships. As you shop, Horne recommends getting your offers and any small details in writing. Doing so can help you stay organized and use these notes as part of your negotiation to secure the right vehicle.
Shop Online
Don’t really enjoy shopping at a physical dealership? Holthoff said to consider shopping with an online car retailer.
Comparison Shop
Whether you plan to find deals at a dealership or online, Holthoff said car shoppers can compare what the dealer is offering to what’s listed by reputable websites like Kelley Blue Book.
Shoppers may specifically take advantage of lists of the national average for used car prices. “Using these price estimates while shopping can make it easier to avoid overpaying,” Holthoff said. “It’s also easier to research a car’s maintenance history. If the car you are interested in has a history of accidents, you can leverage that to get a better deal or use this information to move on to a different vehicle.”
Should I Invest In an EV?
2023 might be the year you decide to swap out a gas-powered car for your first electric vehicle (EV). Making the decision to buy an EV, however, means preparing for upfront and ongoing costs.
Upfront costs: This includes the car’s price tag and at-home EV charging equipment. Horne said upfront rebates are available from federal and state governments. Some utility companies may offer electricity discounts and retail establishments may have parking perks for EVs.
Ongoing costs: This means electricity (instead of gas) and maintenance. EVs require less maintenance than traditional cars — Horne said EV batteries are covered by eight to 10-year warranties — and are estimated to save car owners $4,600 in maintenance expenses over the life of a vehicle.
Aside from upfront and ongoing costs, Horne said other key factors to consider include maintenance considerations, charging logistics and environmental sustainability.
How Do I Know This Car Fits My Needs and Budget?
You’ve done your research, taken some test drives and shopped around for the best deals. It’s time to purchase the car. However, the last thing any car shopper wants is to buy a vehicle that is too expensive. To determine if the car purchase fits your needs and budget, consider the 20% take-home rule, 20% down payment rule and 36% debt load rule.
20% Take Home Rule
A common piece of financial advice is total car expenses shouldn’t exceed 20% of your take-home pay. Holthoff recommends totaling up the entire monthly costs of fuel, maintenance, repairs, insurance and registration fees along with your monthly payment. To estimate vehicle maintenance and repair costs, use the AAA recommendation of setting aside at least $50 per month for both expenses.
20% Down Payment Rule
Car shoppers purchasing used vehicles are recommended to put a down payment on their loan.
“This will help secure a lower interest rate and reduce your overall monthly payment because you’ll come across as less risky to potential lenders,” Holthoff said. “A good rule of thumb is to put down at least 20% of the purchase price of the vehicle.”
36% Debt Load Rule
You don’t want to take on a new auto loan that is so expensive it strains your budget. Holthoff recommends using the 36% debt load rule. This rule states your fixed expenses shouldn’t exceed 36% of your take-home income and ensures you have enough room in your budget to cover your bills and enjoy a little extra.
Should I Pay in Financing or Cash?
Financing or cash are two typical ways most people buy a car. Horne said those who take out an auto loan via financing will need to pay this loan back over time with interest. Those who pay with cash have enough cash saved to cover the full purchase price of the vehicle.
No matter which you choose to do, there are advantages to using both methods. If you choose to finance with an auto loan, you’ll be able to pay it back quickly without worrying about having to save up for years to make the purchase.
Paying in cash can also help car shoppers save money. “By not having to make monthly interest payments on a loan, you’ll likely end up paying less for your car in the end,” Horne said.
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