2025 Car Buying Guide: Everything You Need to Know
Disclaimer:
The information provided by Dirt Legal is for general informational purposes only and does not constitute legal or financial advice. Please consult your CPA or attorney for guidance on all financial and legal matters.
Buying a car can be just as stressful as it is exciting, but with the right preparation, it doesn't have to be! At Dirt Legal, we understand that the car-buying process can feel overwhelming, that’s why we’re here to help you every step of the way.
Having all of the key information is crucial to making a confident and informed decision. Whether you're deciding between a brand-new model or a used car, we have the road map for you.
Know Before You Go: Setting Your Budget and Needs
Before stepping into a dealership, it is always important to look closely at your finances. Often, experts recommend following the 20/4/10 rule:
Put down at least 20% of the vehicle’s price.
Finance the car for no more than 4 years.
Keep your total transportation costs (car payments, insurance, and fuel) under 10% of your gross monthly income.
This approach helps prevent overextending your budget while ensuring you can handle the ongoing costs of car ownership, according to The Swiss Journal of Economics and Statistics.
Calculating the Total Cost of Ownership (TCO) is your next stop for smart and safe financial decisions when it comes to buying a car. The TCO includes fuel, insurance, maintenance, taxes, and depreciation. According to a study by AAA, the average annual cost of owning a car in the U.S. is approximately $9,000, though this can vary depending on your vehicle type.
Next, think about your daily routines as well as your primary user for the vehicle, ask yourself these questions:
How long do you plan to keep the car?
Will you be towing anything, like a trailer or boat?
How much cargo space do you need for hobbies or work equipment?
Is fuel type important to you (gasoline, hybrid, electric, diesel)?
Will you be using the car in extreme weather conditions (snow, heat, etc.)?
Do you want a car with a specific type of transmission (manual or automatic)?
Do you need a vehicle with high-ground clearance?
Do you need a fuel-efficient car or an electric vehicle to save on gas?
Will you need ample seating and storage space for passengers and luggage?
Matching your vehicle to your lifestyle is one of the most important steps in the car-buying process. When your car aligns with how you live, work, and play, it can enhance your daily experience and eliminate common frustrations, according to the Kelley Blue Book.
Here are some great tools such as finance tracking apps and car loan calculators to aid your decision:
Features to Look For: What Matters
Every car has different features, which is why it is crucial to prioritize safety, efficiency, comfort, and practicality. Prioritizing your well-being while buying a car should always be kept in mind, considering advanced driver assistance systems such as blind spot monitoring and adaptive cruise control can make driving less stressful.
Rearview cameras and parking sensors can also come in handy, aiding you in avoiding obstacles such as a busy parking lot. Checking scores from organizations such as the National Highway Traffic Safety Administration and the Insurance Insitute for Highway Safety to ensure the car offers top-tier protection is also an essential step to take on your car-buying journey.
Fuel efficiency is something that should be at the top of your mind as well, higher miles per gallon can mean substantial savings over time. Hybrid or electric vehicles offer significant savings on fuel and reduced emissions, electric vehicles often qualify the owner for tax incentives.
Know What to Avoid: Red Flags for Buying New and Used
High-Pressure Sales Tactics: Watch for salespeople pushing you to decide on the spot, take your time.
Unclear Pricing: Be aware of a lack of transparency in terms of taxes, fees, and add-ons
Limited Vehicle Inventory: Being told the car is not available and being pressured to buy another one
Tires: Uneven tire wear could indicate alignment issues or suspension problems.
Interior: Check for excessive wear on the seats, pedals, and steering wheel, as these could suggest high mileage despite a lower odometer reading.
Paint and Rust: Look for mismatched paint, bubbling, or rust spots, especially near wheel wells and undercarriage areas.
Vehicle History Report (VIN): Obtain a vehicle history report with Dirt Legal here to check for prior accidents, title issues, or flood damage.
Digital Displays: On newer cars, look for flickering or misaligned numbers, which could indicate odometer tampering.
Service Records: Cross-check the odometer reading with mileage recorded during routine services.
Dealer Tactics: Recognizing Upselling Tricks
Car salespeople often try to upsell customers. Here's what you should watch out for:
Extended Warranties: While these can be useful in some cases, they’re often overpriced. Research warranty options outside the dealership to compare costs.
Add-Ons and Accessories: Dealers may try to sell unnecessary extras like paint protection or fabric treatments. Politely decline unless it’s something you truly need.
Monthly Payment Focus: Salespeople might steer the conversation toward affordable monthly payments to distract from the overall price. Always negotiate the total cost, not just the payment.
Push for Upsizing: Be aware of salespeople pushing you to buy a bigger or more expensive car than you need
Seal the Deal: Financing Options
There are multiple financing options available depending on your needs including loaning and leasing. A loan allows you to own the car outright once payments are complete, while a lease is essentially a long-term rental: you return the vehicle at the end of the lease term (unless you decide to purchase it).
Typically, loans come with higher monthly payments because you're covering the full cost of the car plus interest, but this comes with no mileage limits or restrictions on customization. On the other hand, leasing offers lower monthly payments because you are only paying for the vehicle's depreciation, often coming with mileage caps and restrictions on modifications.
What About a Car Title?
When you’re buying a car, the last thing you want is to deal with a missing or lost title. If you’ve ever found yourself in this situation, Dirt Legal’s Car Title Recovery Service can help make the process seamless. Whether you’ve misplaced your title or never received one in the first place, Dirt Legal guides you through the steps to get it back quickly.
With expertise in each state’s rules and a customized approach to your situation, Dirt Legal ensures that you can get the title for your car or any other vehicle without the added stress. That way, you can focus on the excitement of your new ride!
Drive Off Into the Sunset: Post-Purchase Tips
Before you hit the road, there are a few essential tips you need to know to properly take care of your car. A car is an investment and regular maintenance is the key to keeping it in top condition. Here are some key post-purchase tips:
Schedule routine oil changes
Check tire pressure
Replace filters as needed
Stay on top of your car’s maintenance schedule outlined in the owner's manual
Don’t ignore warning lights or strange sounds
Celebrate Your New Ride!
It's time to celebrate your new ride, congratulations! Plan a road trip, take a scenic drive, or simply cruise to your favorite spots. Celebrating this milestone is about more than just driving—it’s about the freedom and possibilities that come with your new wheels.
Happy driving!