Most important piece of advice I can think of: purchase cost is only a small fraction of what you'll spend on the thing. Base your decision on total cost, which will include parking, insurance, gas, tires, repairs and depreciation (decline of resale value).
Be sure to question the root assumption "I need to buy a car". Depending on where you live there may be alternative modes of transportation (e.g. public transport, self-powered) or alternative modes of use (long-term rental, car sharing, or complementing non-car transport with occasional rental).
That's a good point. Is there any way to get an idea of how much a car will cost in maintenance etc? Fuel economy is easy but I'm not sure how to work out how much a car will cost for replacement parts, maintenance, etc.
I'll see if I can check how similar cars have fared in depreciation using second hand car listings, although if anybody knows a more efficient way to do this it would be very handy.
Unfortunately in my circumstances (area, job, lifestyle), some form of motor vehicle is pretty much vital.
So I'm looking at buying a car. At the moment I am using my parents' old car, however when I move out of home I will not be able to take it with me, and it also lacks some of the features I would like (cruise control in particular).
I'm looking at buying a small car, probably a hatchback. At the moment I have saved around AU$12,000. My parents are willing to lend me some amount, probably up to $5000, and I work for a bank which can give me a loan at a very favourable staff rate. I earn a bit over $325 per week at the moment and I have few living expenses beyond luxuries, that income is bolstered semifrequently when I can work extra shifts. At the beginning of 2013 I will be seeking a full time job as a high school teacher.
Looking at a few car websites (in particular carsales.com.au) it appears I can buy a fairly good second hand car for around $15,000, or a brand new car that seems quite good for around $24,000. This is a very rough guide to local prices.
I am aware that my decision process in this judgement is very fallible because I don't know much about buying cars, e.g. the potential pitfalls of a second hand one, and any other things I need to take into account.
Being as this is by far the most money I will ever have spent on a single thing and it is likely to last me for most of a decade at least, I am strongly motivated to make this decision rationally.
Does anybody have any advice they can give on how I can decide how much money to spend, or things I should consider when comparing potential cars?