Calculate and Compare Before You Buy

There are many cost calculators designed to help you decide how much car you can afford. “AWARE”, or Americans Well-informed on Automobile Retail Economics, sponsors an “Auto Finance Calculator” on its website to help consumers make informed car buying decisions. Kelley Blue Book provides tools for comparing car pricing information, and IntelliChoice ranks cars by lowest repair, maintenance and fuel costs.

Consider using the 2/10/60 rule. It assumes a car ownership period of at least five years. Select the top five cars that fit your needs. For each car, double its retail cost, multiply by 10%, and divide that figure by 60. The result should give you the monthly cost to own over a sixty month, or five-year period. Check out the monthly listings of the lowest “True Cost to Own” (TCO) comparisons.

This year EPA is running new road tests that measure gas mileage under a wide variety weather and traffic conditions. The revised numbers should appear on window stickers for 2008 cars. In the meantime, you can use a calculator devised by Kiplinger’s Personal Finance Magazine. With this Kiplinger tool, you can tap into editors’ estimates of the MPG for hundreds of 2007 models using the new EPA standards.