What to Know When Buying a New Car
Navigate your next car purchase with confidence. Our car buying guide can help you to find safe, reliable models, understand car finance and insurance, and find car deals. Step one is to make sure that buying new or used is the right choice for you.
Photo: Getty Images
Top New Cars Questions
Should you buy a new, certified pre-owned, or used car?
-
New Cars
Price factor Prices can evoke sticker shockFinance factor Lowest interest rate but greatest depreciationReliability & History Highest owner satisfaction and reliabiltypros & consNew Cars Ratings- Full bumper-to-bumper warranty
- Latest safety features
- Higher insurance and taxes
- Many hidden costs, including destination charges
-
Certified Pre-Owned Cars
Price factor Price premium over buying a regular used carFinance factor Elevated used-car interest ratesReliability & History Higher satisfaction and reliability than a regular used carpros & cons- Save money over buying new
- Inspected, refurbished, warrantied
- Selection can be limited
- Still a used car
-
Used Cars
Price factor Greatest savings (sales price, taxes, insurance)Finance factor Higher loan interest ratesReliability & History Risk that the car is misrepresented. Best years are behind it.pros & consUsed Cars Ratings- Massive selection
- Can order online from services like Carvana
- Private sales mean dealing with all the paperwork yourself
- May have no or minimal warranty
What makes a CR Recommended new car?
CR Recommended new and used cars have a strong Overall Score, factoring road test results, predicted reliability, owner satisfaction, and safety.
-
Road test
Each car we test is purchased anonymously and put through more than 50 tests at our 327-acre test facility. Those tests include acceleration, braking, emergency handling, and fuel economy, among others.
-
Reliability
Every year, we collect detailed information on CR member experiences with hundreds of thousands of cars. Analyzing this data, broken into 20 key trouble areas, reveals the likelihood of problems.
-
Owner satisfaction
Surveys reveal whether a CR member would definitely get the same car if they had a chance to do it over again, effectively measuring whether a car lived up to its owner’s expectations.
-
Safety
This rating combines the results of our dynamic tests, such as braking and handling, with crash test results from IIHS and NHTSA, giving credit for key safety systems that have been shown to decrease crashes and injuries.
How to make sense of car pricing lingo
Here is a glossary of common finance and lease terms you'll encounter in a dealership’s finance office.
- MSRP
- The manufacturer's suggested retail price is the price automakers recommend dealers charge for a new car. It is printed on the window sticker and serves as the starting point for negotiation.
- APR
- The Annual Percentage Rate is the yearly cost of borrowing money to finance a vehicle, shown as a percentage. This includes interest and lender fees, and it may include broker fees to the dealership if the loan is arranged by them.
- Down payment
- This is money put down up front to reduce the balance that will be financed. For leases, this is often referred to as the cap cost reduction.
- Lease
- Lessees pay to use a car for a set period, often with lower monthly payments than a traditional purchase, but the vehicle must be returned (or purchased) at the end.
- Residual value
- This is the vehicle’s projected value at the end of a lease. The lease cost is based on the difference between the MSRP, or negotiated price, and the residual value.
- Trade-in value
- This is how much the dealership offers for your current vehicle when using it to buy or lease a car. Check your trade-in value.
- Depreciation
- This is the vehicle’s value lost over time and miles, impacting resale and the true cost of a purchase.
- Incentives and rebates
- Automakers and dealerships can offer various enticements to motivate buyers, such as discounted financing, cash rebates, and special programs for college grads or military veterans.
- Invoice price
- This represents what the dealer pays the manufacturer for a vehicle—in theory. But it doesn’t tell the full story. Buyers should focus instead on the average transaction price, which reflects what people paid for the car.
- GAP insurance
- This protection covers the difference between what you owe on a loan or lease and the car’s value if it’s totaled or stolen.
What you should know before going to a dealership
-
7 questions to ask before buying a car
Illustration: Heemin YangFinding the right car and then negotiating the best price can be a whirlwind experience. So what do people who have recently purchased a new car wish they had considered more carefully? See advice from our experts and consumers.
-
Should you buy a new, certified pre-owned, or used car?
Photo: Tomasz Zajda/Adobe StockOur analysis shows that reliability and satisfaction vary significantly among these purchase strategies. Our experts reveal the key differences and provide exclusive advice backed by data.
-
Why choosing the right car matters more than ever
Photo: Getty ImagesHigh transaction prices and market uncertainty might have you worried about your next car purchase. That’s why it’s more important than ever to choose a car that will be worth every penny you spend, and that will serve your needs for years to come.
-
Best new-car deals
Photo: Getty ImagesCheck out these CR Recommended cars with incentives. Each is a good, safe, and reliable car that can also save you money.
-
Leasing vs. buying a new car
Photo: iStockBuying involves higher monthly costs, but after you pay off the loan, you own the car. Leases have lower monthly payments, but you don’t own the vehicle and can get caught in an endless cycle of car payments.
-
How to beat the four square and other dealership tactics
Photo Illustration: Lacey Browne/Consumer Reports, Getty ImagesWe talked to former car salespeople to learn their tricks and asked our own experts for their advice. In this article, we let you know what sales tactics to look out for in the order you’ll encounter them, and the secrets of how to conquer them.

CR's Build & Buy Car Buying Service
Consumer Reports members can access the Build & Buy Car Buying Service at no additional cost.
Learn More about Build & Buy- Through this service, you can compare in-stock vehicles, see what others paid, and customize payments online.
- Find the car you want and get up-front price offers online from local certified dealers.
- On top of national incentives, CR members are eligible for additional incentives from select manufacturers.
- Plus, you can get an instant trade-in value for your current vehicle to use toward the next car purchase.
Everything you need to know about car insurance
-
Best car insurance companies
Photo Illustration: Consumer Reports, Getty ImagesWe highlight the top performers based on a national survey of more than 40,000 policyholders.
-
Car insurance buying guide
Here is everything you need to know about getting the right insurance at the right price.
-
How to save big on car insurance
Illustration: SinelabCheck our actionable tips to lower your premiums based on survey responses and expert advice.
CR’s exclusive car buying tools
-
Used car marketplace
Illustration: Lacey Browne/Consumer Reports -
Trade-in estimator
Illustration: Lacey Browne/Consumer ReportsSee how much your car is worth.
-
Maintenance and repair costs by brand
Illustration: Lacey Browne/Consumer ReportsBrands are ranked by their costs over time, looking at 5- and 10-year intervals.