I was in the market just a month ago to replace one of my families vehicles and let me tell you – there are more choices now then ever. Crossovers, SUV’s, hybrids, etc… But what it all boils down to is what price range you need to be at and whether or not you will be obtaining a loan with a down payment and monthly payments.

Generally speaking most people (95% according to the US Banking Assoc.) will be buying their next vehicle with a loan. New cars will definitely have lower interest rates. The range of the interest rates that you will be offered very greatly depending upon your credit. If you have great credit (a FICO score of 720 or greater) then you’ll have no problem getting the best rates out there. There are even cut rates or zero percent incentive rates from the manufacturer for those with great credit.

For those with average credit scores (usually 600 – 710 or so) you will still get a good rate but on a new car you might have to take the incentive money instead of the buy down or zero percent rate. Don’t feel bad if you are in this range – most people (70%) do not qualify for incentive rates and therefore take the manufacturers rebates instead.

With these incentives on new cars (even if one does not qualify for the incentive or buydown rates and takes the regular rebates) you can get a pretty good deal on almost any new car. What you have to keep in mind though is the fact that new cars drop drastically in their value over the first year of ownership. This is fact and most will drop anywhere between 25 and 30% in value in the first year (this is commonplace with new auto sales and car salespeople are known to lie about these figures).

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If you have a tendency to change cars often (like purchasing a new car every two or three years then you may be better off with a used car). Another reason why many people buy used cars is because you can get a more up-fitted or fully loaded car with far more options for less money.

Generally speaking, you can go up a class of car and have it come fully loaded with a used car with low miles for less then you would pay for your new car. For instance, if you are looking at a brand-new Toyota Corolla or Honda Civic you can get a low mileage used Toyota Camry or Honda Accord with leather, V6, aluminum wheels and loaded for a few thousand less.

If you read Consumer Reports magazine you will see that nine times out of 10 it’s a better deal for you to buy a used vehicle rather than a new vehicle. Yes, with the new vehicle you get a brand-new vehicle that no one else has owned and you have a full new car warranty. But with a low mileage used car you can also get a warranty that is every bit as good as the one with the new car for less money.

Once you’ve decided to buy a used vehicle or a new vehicle, whatever be the case, you then still have to go and negotiate with the car dealership(s). Watch out for hidden fees and charges – especially the Documentation or Doc fee. Some states have already limited this to $50 (like in California where the state senators found the Documentary fees to be nothing more than a shady way of extracting more money from unsuspecting customers). Other states like North Carolina have car dealers charging ridiculous amounts upwards of $500 or more for these “Doc” fees.