2020 AAA Car Buying Guide

Ellen Edmonds, AAA

Purchasing a car is the second largest investment behind a home that most people will make in their lifetime. The car buying process can be seen as difficult, time-consuming and stressful. Understanding all of the options available as well as individual needs can ease some of the anxiety associated with purchasing a car. AAA offers the following guidance when it comes to shopping for your next vehicle.

Shopping for a Car in a Pandemic

As Americans return to work, school and vacations in the coming months – how we approach life will look very different and car buying is no exception. AAA offers the following advice to consumers when shopping for their next vehicle during this time.

Do as Much Research Online and Over the Phone as Possible

You may be able to complete the entire transaction virtually without having to visit a dealership.

Virtual or In-Person Transaction

A fully virtual transaction may not work for some buyers who prefer face-to-face interaction and having the ability to browse cars in person and test drive the ones they like. If you choose to visit a dealership or private buyer:

  • Before going to the dealership, call and ask about their policy regarding in-person visits. There may be a limit to the number of customers allowed in the showroom or they may require setting an appointment ahead of time. Ask about their procedure regarding test drives, cleaning between customers and other precautions they are taking to observe social distancing guidelines. Many dealerships are even offering to bring vehicles to a buyer’s home to look over and test drive.
  • With a private buyer, make sure you can conduct business without having to enter their home or business. If you decide to test drive the vehicle, consider wearing gloves, a mask and using hand sanitizer as needed. Ask if the seller will allow you to test drive alone or if they would consider sitting in the back seat on the passenger’s side if possible.

Before Buying Your Next Car

Dollars and Sense

Before considering any specific makes or models, determine what makes sense for your budget. Consider how much a trade-in is worth and how much money you want to put toward the vehicle. Investigate both financing and leasing options. Spend time calculating all of the costs (depreciation, insurance, maintenance, fuel and monthly payment) to decide how much you can afford without overextending. Each year AAA produces Your Driving Costs, an in-depth cost analysis of new car ownership. This study includes formulas and information that can help you determine the cost of cars you are considering for purchase.

To Finance or Lease?

Aside from the type of car you’d like to purchase, whether to finance or lease will be the other big decision you make when buying a car. This will be determined by your personal situation including budget and how long you plan to keep the car. For example, if you are someone who is an early adopter of new technology, likes to change cars often or doesn’t put a lot of annual miles on a vehicle, leasing may make more sense. Make sure to evaluate both options to ensure you pick the one that will best suit your needs long-term. If you find financing is the best option for you, make sure to get pre-approved for a loan. This way you’ll know how much you can afford and will help when you negotiate loan terms with the dealer.

How Long is Too Long for a Car Loan Term?

Manufacturers and dealerships sometimes offer extended loan terms as an incentive to buyers. In some cases, these loans can be as long as 84 months with interest as low as zero. Initially, a loan like this may be attractive to a buyer since it will help lower the monthly payment. However, you should understand that with longer term loans there will be a period of time when the vehicle will hold less value than what is owed due to depreciation. If you plan to keep a vehicle for a long time, this may not be a factor and a longer loan term may make sense. Either way, consider buying gap insurance for all loan terms, especially those that are longer than five years.

The Car’s Purpose

Take a realistic look at how the vehicle will be used:

  • What types of trips will you most frequently take?
  • How many passengers will the vehicle need to carry?
  • Will it be used for a commute? If so, for how long (time and distance)?
  • Will the vehicle be driven on the highway?
  • Will you need extra cargo space?

Must-Haves versus Wants

Make a list of all the required features the vehicle should include, making sure to separate ‘wants’ from ‘needs.’

  • How much occupant and cargo capacity?
  • Minimum fuel economy?
  • Safety features and technologies?

When making the list, do not just think about needs today, but also look several years down the road.

  • Could children be in the future?
  • Could the commute lengthen?
  • Will there be a need to transport passengers that require special accommodations?

Understand the Difference Between Certified Pre-owned and Used

Look at pricing options for both new and slightly used vehicles. New vehicles typically come with longer warranties, buying incentives from the automaker, the latest features and are widely available. There are two types of used vehicles to choose from – certified pre-owned and used. The advantage of a certified pre-owned vehicle is the original owner has absorbed the majority of the depreciation cost, while the vehicle still has quite a few of the latest features and a manufacturer’s warranty. Non-certified, pre-owned vehicles typically are less costly, but are older and usually come without a manufacturer’s warranty. 

Are You Covered?

Review the length of the warranty of vehicles being considered and exactly what it covers. Investigate the maintenance costs associated with the car by reviewing its recommended maintenance schedule and pricing out the cost of several of the regularly needed maintenance items. Consider purchasing an extended warranty – if you do, understand what’s covered as not all extended warranties are the same.

Safety First

Check the safety ratings of all models under consideration from the National Highway Traffic Safety Administration at Safercar.gov and Insurance Institute for Highway Safety. Evaluate the safety features available on each model. If using a car seat for a child, check if the vehicle’s Lower Anchors and Tethers for Children (LATCH) system is easy to access.

Ask a Friend

Seek recommendations and reviews from friends, family and colleagues on their vehicles. Supplement by reading both professional reviews, such as those provided in AAA’s Car Guide or by AAA’s Auto Buying experts at AAA.com/AutoBuying.

Variety is the Spice of Life

Narrow the choices down to two or three vehicles that meet all the criteria. By allowing flexibility, buyers have more negotiating room and a better chance of finding the best price. Once you have narrowed down your choices, contact your insurance agent to obtain a quote on each vehicle.

Understanding Today’s Vehicle Technology

Many new vehicles are equipped with Advanced Driver Assistance Systems (ADAS), which are designed to support the driver and improve safety. AAA has conducted extensive research of these systems and other types of vehicle technology in order to help inform consumers when it comes to the purchase of their next car. 

Now It’s Time to Buy!

In the past, buying a car almost always started at the dealership or with a private owner. Today, however, consumers may begin their shopping experience online by researching and pricing out the vehicles up for consideration. Many dealerships and other suppliers even offer an entirely virtual buying experience including home delivery of the vehicle. There are pros and cons to both in-person and online car buying and it’s important to weigh both when considering the best option for you.

Shopping online allows you to browse at your convenience and look at a large variety of vehicles without having to discuss with a salesperson. Others enjoy the face-to-face interaction and having the opportunity to interact with and test drive vehicles in person. No matter which route you go, the steps to buying a car, whether online or in-person, are essentially the same.

Tips for Test Driving

You may not feel comfortable visiting a dealership in-person but would still like the opportunity to test drive the vehicle you’re interested in. Many dealerships are now offering to bring a vehicle to the customer’s home for a test drive and preview. Check with the salesperson you’re working with on your options for a contactless experience. Once you have the vehicle, AAA recommends the following test-driving tips:

Kick the Tires

Walk around the car. Visually inspect the vehicle to see if there are any uneven gaps between body panels (e.g. doors, trunk, hatch, etc.) which may indicate the vehicle was damaged at some point.

  • Check for bubbles and pitting on the paint
  • Open and close the tailgate or trunk and doors
  • Does it sound solid and well-made?
  • Are the door gaps even?
  • Is it the right size for the needs of your family?
  • Will the design allow for easy loading of luggage, sporting goods and groceries?

Be a Backseat Driver

Ask the salesperson to take you for a preliminary test drive. You can focus on the ride without the distraction of driving, and you are more likely to notice noise and overall comfort. And, of course, you can evaluate backseat room for future passengers.  

One Size Does Not Fit All

Get in and try the car on for size. Check the legroom and visibility. How easy is it to adjust the seats? Are the controls easy to read, reach and use? Try all of the accessories and options, such as air conditioning, the sound system and navigation aids.

Take It for a Spin

Drive the exact model of the car you want to purchase. If possible, pick your own route for the test drive that mirrors your daily driving routine. It is a good idea to test the car’s ride quality and handling on a number of different road surfaces: city streets, hills, freeways and winding roads.

Test the engine’s responsiveness in real-world conditions. Is there a smooth and constant delivery of power? Try merging onto the highway, passing, and stop-and-go city driving. Spend part of the test drive with the air conditioner on to see if it affects engine performance.

  • Look for smoothness and ease of operation. Listen for hesitation or straining.
  • Check steering responsiveness. Practice long turns and sharp turns. Safely practice sudden swerves and gradual lane changes.
  • Your life could depend on your brakes, so put them to the test. Brake both softly and decisively to gain an accurate idea of the car’s stopping distance.
  • At various speeds, listen for excessive engine, road and wind noise. Check for squeaks and rattles coming from the interior and bodywork. Listen with the windows open and closed.
  • Parallel park to discover any blind spots or potential difficulty in identifying the corners of the car.

Sign on the Dotted Line

Once you’ve found the right vehicle for you – it’s time to make it official. In most cases, there are three separate negotiations that occur when purchasing a car: the price of the new vehicle, trade-in value and finance rate if applicable. Take your time and negotiate them individually. Remember – you control the deal. Only buy the car you want with a deal and price that you feel comfortable with.