Both new and used car prices have been skyrocketing the past couple years, and the market is competitive. But the vehicle price tag is not the only cost consideration. Make sure you’re prepared before you purchase to ensure you find the right fit for your budget.

Here are a few other very important factors you need to look at before committing to a specific purchase.

Fuel Economy

In the era of high gas prices, MPG is at the top of everyone’s mind. While a slightly lower rating may seem like a decent trade-off between vehicles, in the era of five-dollar gas that difference can have a substantial effect on your wallet (and the rest of your household budget). Before you choose that gas guzzler make sure you’ve accounted for the additional costs of a fill up every few weeks. Be prepared for sticker shock.

Hopefully gas prices will stabilize and drop back down to non-crisis levels but predicting when that change will happen is anyone’s guess. Make sure you can handle a few months of abnormally high prices if you’re still set on getting a set of wheels with a lower-than-average MPG. This may be the right time to consider investing in an electric or hybrid vehicle, which can protect you against future gas fluctuations.


Depending on your vehicle these costs can add up very quickly. Once you’ve decided on the type of vehicle you need, pay very close attention to the warranty options included, any extras available, and then spend some time doing research online. A few minutes of digging can let a buyer know if their next dream car is a well-oiled machine or not.

There are thousands of reviews out there. Check out the best-rated models for the type you’re considering and make sure the value matches the price. A little bit higher sticker cost may be completely worth it for a car that runs without issues for years.

Type of Vehicle

What kind of drive time are you planning to put on the car? Is this a commute-only vehicle? Do you work outside and need a pickup truck that can take a serious beating? Maybe you need an SUV for a growing family, two large dogs, and the ability to clean the inside just as easily as the outside.

While it’s tempting to consider getting a larger vehicle for “just a bit more,” shopping on a budget means consumers need to be honest with themselves about what they really need. If this is a second vehicle, only to be used for trips to and from school or the office, maybe electric is the way to go? The initial cost premiums are now more affordable as green vehicles become more common. If you need (or absolutely want) off-road capability, then that option will drive the rest of your purchase.

Being in the military can make things more complicated when it comes to considerations. The car that was perfect for one location may not be right for another. In addition to all the above factors, any responsible buyer needs to know how much vehicle they can afford. The Navy Federal Credit Union’s Auto Loan calculator can help you see what your car payment could be. Once you’ve tentatively found the car of your dreams you should get a copy of the vehicle history report.

If you’re like most car shoppers and don’t have enough cash on-hand to buy a car outright, you will need to get an auto loan. That’s where your credit score comes in. There are many factors that go into your score. Essentially, it’s a rating that tells lenders how likely they are to get their money back if they lend it to a certain individual. Regular payments, and low credit utilization (the portion of your credit limits that you actually use) will get you a higher score. Late payments, defaulting on debts, and very high amounts of debt will lower it.

The higher your score is, the better (lower) your loan interest rate will likely be. A very poor credit rating is 300-579 (out of 850). Anything over 800 is exceptional.

Regardless of your score, anyone planning to buy a vehicle should pull their rating as early as possible. Most of us don’t check regularly, and a lower-than-expected score will put serious limitations on your spending power when you start looking to purchase. With a few months planning, you can make efforts to increase your score by consolidating and paying down debt. Then when it’s time to apply for that loan, Navy Federal Credit Union has great rates that can help keep more money in your pocket as you cruise down the road.

Do your personal finances a favor and take the time to figure out exactly what you do and do not need in a new or used vehicle purchase. Armed with that knowledge, figure out a budget, pull your credit score, and if there’s some work needed, come up with a plan and stick to it. Ending up with the wrong purchase could have consequences that could impact your finances, not just your stress level.

This article was sponsored by Navy Federal Credit Union.