So, as I've mentioned, I have to buy a car. Any useful insights about buying a car?

I applied for an auto loan and was offered a terrible, awful interest rate. I'm horrified of dealership financing.

My dad says lease a car. I'm not invested in buying something brand new just for the "ooh, shiny" factor, but I'm also afraid of being saddled with a used car that starts sucking two months after I buy it (which happened with my roommate's slightly used volkswagon).

Oh, I forgot to mention, I canceled the loan with the awful rate.

If there is any possibility that you'll be moving to a different state during the term of the lease, make sure to check that there is no prohibition on moving. Some leases require the car to be primarily located in the state where it was leased during the entire term. Even if there is not that particular requirement, keep in mind that you will likely have to return the car to the same place you leased it, another consideration if you are potentially moving.

If you get a used car, consider the cost of repairs and reputation for reliability. I drove a Saab for years, and the cost of repairs was significantly more than that of many other cars. (I wouldn't be surprised if it was the same with your roommate's VW). Go for something that has a reputation for holding up well, and isn't insanely expensive to fix. Toyota or Honda are good.

www.edmunds.com - I love this website.

PS - at Edmunds, you can find out which dealerships are offering deals for low APRs and/or cash back.

If you are still thinking new, how about looking at a hybrid. You get a decent federal tax deduction. A lot of states offer deductions or credits for hybrids, too. (NY does, for example).

With how gas prices are now, it seems like the tax savings and the gas savings may make up the cost difference between a hybrid and the most similar traditional car within a couple years.

I know that's what I would do, like, if I had a chance in hell of owning a car.

I will second used Toyotas if you want to go that way, though. I had one that made it to over 300,000 miles No joke... 1993 Corola. Never once got stuck in the snow, either, and my mom's a nurse so she drove it in every Buffalo road closing and blizzard since it was new. It was pink, I had hello kitty seatcovers. Only ditched because of an accident.
My mechanic once told me, when getting an oil change, that if everyone drove Toyotas he would be out of work.

A new car will lose ~50% of its value in the first three years. Not worth it unless you want the shiny. Mid 90s vehicles can be had for next to nothing (relatively).

Fewer features = fewer things to break.

If buying used, motoring organisations will (for a fee) examine the vehicle for you. Also check the car's history (US equiv. of a HPI check?)

Used Toyota Corolla, no question. OTOH, the Honda Civic just went through a facelift, and the older ones are going to be discounted while the hip kids all buy the shiney. Either the Corolla or the Civic will be very reliable and economical. As boring to drive as watching paint dry, but reliable.

I prefer dealing with other people, rather than dealerships, because I like to try to get as much history on the car as possible. Stuff off the lot might as well have rolled out of a black hole, for all the maintenance history you get. More importantly, used car dealers are professional liars. Nice, amicable, professional liars. Private people may lie, but they don't practice the skill 8 hours a day.

The exception I'd make w/r/t buying used from a dealer is for the Factory Certified cars, which are lease returns that come with an OEM guarantee. If the dealer only says "12 month warantee", it is through a 3rd party company, and may only apply at the dealership itself. The Certified cars are waranteed through the manufacturer, and the warr. is good at any dealer. I made back the Factory Cert. $ premium on a Saab in one service visit.

Do try to get a pre-purchase inspection done at an independent shop. For about $75 they will tell you if there are any big surprises hiding inside. Sorry about your roomie's VW, but they have a bit of reputation for that.

Can you join a Credit Union? They will have the least usurious rates for car loans.

If you'd like to know about cars with high repair costs and unobtainium parts, feel free to drop me a line; I've owned a Fiat, a Honda, 2 Alfa Romeos, 3 Saabs, and an Audi. I am a glutton for punishment, it seems.

Just in general: Bring a flashlight when you look at a car. You want to look for leaks, drips, wet-looking areas, or places where dirt is either sticking, or has been washed away. Modern cars don't leak all that much. You will find that 'normal' dirt from the road is dry and cakey, whereas oily dirt is, well, oily. Some weeping around the engine is ok, particularly around cam covers, but it's a judgement call. You are mostly looking for oil that is out of place; a drop on a gasket is fine, a few drops on the inside of the hood are out of place.

And what with the recent hurricanes, watch out for flood cars. A car that's been underwater will never run right again. Run a CarFax on the VIN, but remember that it may not be the whole story. Sniff for funk, pull back carpeting in the trunk to look for ickyness, etc. With searchable databases like CarFax, it is harder these days to make a living selling fraudulent cars, but there is always someone willing to try. Caveat Emptor, as always.

If you are still thinking new, how about looking at a hybrid. You get a decent federal tax deduction. A lot of states offer deductions or credits for hybrids, too. (NY does, for example).

With how gas prices are now, it seems like the tax savings and the gas savings may make up the cost difference between a hybrid and the most similar traditional car within a couple years.

Don't buy a hybrid unless it is insanely cheap - they are much dearer to run (any government subsidies aside) than a conventional car and the resale is crap. Several governments started using them here as a political stunt (look how green we are, so vote us back in!) and they are now regretting it - they cost around 20% more to run over the long term because the batteries die a sudden and horribly expensive death.

If you can possible swing it (and it doesn't sound like you can), buy new and look after it like a baby - get every service done as per the book, fix every little thing that breaks immediately, no matter how minor. It will repay you in spades for many years to come. I wish I could buy new and do this but, instead, I have been able to buy two cars that have been treated like this (the previous owner of one of them begged us to sell it back after six months) and it was the best decision I ever made car-wise. If you can't do this, search and search and search to find a car that someone loved and continue to love it.

Also, look around for the most common, most mundane cars on the road - they are the most common because they last. Look for cars that had a long model run and where the old models are still on the road.

You don't need to know lots about mechanical stuff to check out a car - as above, look for leaks of oil or any other fluid under the car and under the bonnet - anything that leaks is going to cost money. Be wary of freshly-cleaned engines - is it just detailing, or something more? Get right under the car - dealers rarely clean the engine where it is hard to access.

Take your time - research, research, research. Look for the equivalent of carsales.com.au (where we bought one of our cars)and the red book. Ask around - don't be afraid to ask people you spot in car parks with a car the same model as the one you are thinking of. Be prepared to make a quick decision if a true bargain comes up - it doesn't happen often, but true bargains won't give you time to think about them.

Are you confused yet?