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Deals On Wheels: New Car BuyingTips

Economic crisis or not, there are folks out there who need to buy a new car. Everywhere we turn, whether it is a newspaper or on TV, there are endless commercials for "fabulous" deals on vehicles.

"I'm in market for a new car, let's say. What do I need to look for?" asked Early Show co-anchor Julie Chen.

According to David Champion, director of the auto test center for Consumer Reports, right now is a good time to buy, assuming that the individual has the money and/or can obtain financing.

Dealers are anxious to move cars off their lots, so they are offering lots of bargain-basement prices and are willing to negotiate on just about everything.

Champion points out that what consumers shouldn't do is to jump on something just because the car dealer is offering you an amazing price. A lot of the cars that are being pushed right now are trucks and SUVs - vehicles that cost a lot to fill with gas, and that have poor resale values. Although gas might be relatively cheap at the moment, experts agree it won't stay this low for long. Instead, Champion recommends that consumers think about the following:

  • Plan on owning for 5 years: This is how long most people keep a car. So think hard about what you'll really need the car for over that period. Be realistic and practical.
  • Don't "overbuy": If you will be the only person in the car most of year, except for that annual summer vacation with the kids, then buy a smaller car, not a minivan. You'll save money in the end by simply renting the minivan for that week-long vacation, or for the day you need to move your child to college.
  • Consider total cost to own: You must look past the initial price tag. Think about fuel efficiency and how much you'll be spending on gas. Think about how much the car costs to maintain and repair. Think about how much you'll need to spend on insurance for particular models, and how well the car will hold its value over the next five years.
  • A note on depreciation: If you head out to the dealerships now, you'll likely find some 2008 models still on the lot. Because dealers are particularly eager to move these vehicles, you'll see some great prices. But keep in mind that as far as resale goes, you're essentially buying a car that's already a year old, even though you haven't put any miles on it yet. When you go to sell it in five years, you'll be selling a car that's six years old, and you'll get less money for it. Weigh this when making a final decision.

    In general, bargain-minded consumers should be looking to buy small sedans and small SUVs.

    These cars are fuel efficient, versatile, and likely have good resale value. Below, are four specific recommendations from Champion: (*Please note that all prices are the suggested baseline prices for the vehicles. The prices will rise as you add more features).

    HONDA FIT / $14,750

    "It's a relatively small car, but it also has good amount of room inside," Champion says. "It's fuel efficient and fun to drive. I would not take it regularly on road trips, but for the urban commuter it's easy to drive and park."

    TOYOTA COROLLA / $15,350

    "Again, this is a small but roomy car," Champion says. "It's easy to get in and out of. Its average miles per gallon of 32 is great, and reliability ratings have been excellent."

    CHEVROLET MALIBU / $21,605

    "If you're looking for a larger family sedan and trying to go domestic (versus the excellent Japanese models, Honda Accord and Toyota Camry), this is nice and roomy," Champion says, adding that he likes the car's finish, the 4-cylinder engine is economical, and that reliability is good so far.

    SUBARU FORESTER / $19,995

    "This small SUV comfortably seats five," Champion says. "The older versions were quite tight inside, but the '09 is much roomier. Unlike many other SUVs it's not too high off of the ground, so it's easy for all members of the family to climb in and out. It steers well, and has a nice smooth ride."