Smart Car Shopping: Tips to Find the Right Ride for You

Rhea-AI Summary

Mercury Insurance has released comprehensive guidance for consumers looking to purchase new or used vehicles, addressing the growing trend of extended car ownership, which now averages nearly 13 years according to PBS.

The guide emphasizes considering the total cost of ownership, including insurance, repairs, and fuel consumption. Justin Yoshizawa, Director of Product Management at Mercury Insurance, advises buyers to be practical and avoid purchasing more car than necessary.

Key recommendations include:

• Defining needs and budget while considering vehicle type, size, and intended use
• Following the 20/4/10 rule: 20% down payment, 4-year repayment term, and limiting transportation costs to 10% of monthly income
• For used cars: thorough inspection, professional evaluation, and vehicle history verification
• Researching market values through resources like Kelley Blue Book or Edmunds
• Getting pre-approved for car loans to strengthen negotiating position

The guide also highlights the importance of test drives and considering various powertrain options, including traditional gas, hybrid, and electric vehicles.

A guide to budgeting, researching and choosing a vehicle that fits your life and wallet

LOS ANGELES, April 28, 2025 /PRNewswire/ -- Shopping for a new or used vehicle requires a great deal of research encompassing many different considerations. Due to a number of factors — and according to PBS — the average length of car ownership has accelerated to almost 13 years, making your search for a new ride a rare and important "life experience."

To assist consumers who are in the market for a new vehicle, Mercury Insurance is offering some guidance to help choose a vehicle that best fits their needs and budget. 

One of the first things to consider is the category of vehicle you need, the powertrain type and then a feasible budget. Most consumers are likely familiar with traditional gas-powered vehicles, but there are also hybrid and electric vehicles, each with their own pros and cons. 

"When purchasing a vehicle, it is important to factor the 'total cost of ownership,' which includes variables beyond the purchase price like insurance, repair costs and fuel consumption," said Justin Yoshizawa, Director, Product Management, State, for Mercury Insurance. "Many consumers tend to buy more car than they need, which is both wasteful and costly, so I would encourage all shoppers to be practical and realistic before pulling the trigger. Bigger does not always mean better."

Here's a more detailed breakdown of new or used car-buying considerations to keep in mind:

1. Define Your Needs and Budget:

• What type of car do you need? Consider factors such as size, fuel efficiency, cargo space, new or used, and intended use (commute, family duty, etc.).
• Set a realistic budget: If you've been out of the market for a while, you'll be surprised by the cost of new and used vehicles. Determine how much you can afford for the car itself, as well as ongoing costs like insurance, fuel and maintenance. Remember, the excitement of a new car will wear off long before you send in your last payment, so don't overextend yourself financially.
• Research different models and trims and compare features like fuel economy, safety ratings and reliability. There are a variety of YouTube channels that offer helpful in-depth reviews of vehicles from automotive journalists, including Motormouth and Redline Reviews.

2. Inspect the Vehicle (Used Cars):

• Check the exterior and interior: Look for signs of damage, rust, and wear and tear. Examine the engine and undercarriage by looking for leaks and rust, or damage to hoses, belts and other components.
• Check the tires and brakes: Look for uneven wear, cracks or damage.
• Test drive the vehicle: While you should test drive any vehicle you plan to purchase, it is especially important to do so with a used car. Pay attention to how the car handles, accelerates and brakes. If you have items that you use frequently, such as car seats or sporting equipment, bring those with you to ensure they fit in the vehicle.
• Consider a professional inspection: A mechanic can inspect and identify potential problems that you might miss.

3. Research the Vehicle's History (Used Cars):

• Check the vehicle's history report on Carfax or similar sites: This can reveal information about accidents, damage and maintenance records.
• Look for a good service history and records: This can indicate how well the car has been maintained. Asking about the vehicle's previous owners can provide insight into how well the car was cared for.

4. Negotiate the Price:

• Get preapproved for a car loan before you start shopping, so you know what you can afford and can negotiate better.
• Research the car's market value: Resources like Kelley Blue Book or Edmunds can give you an idea of what the car is worth. Be prepared to walk away if you don't get a fair price.
• Don't be afraid to negotiate but also be realistic about what you can afford. Consider financing options.

5. The 20/4/10 Rule:

• 20% down payment: Your goal should be to make a 20% down payment on your new or used car.
• 4-year repayment term: Choose a repayment term of four years or less on your auto loan.
• 10% transportation costs: Spend less than 10% of your total monthly income on transportation costs.

"Doing your due diligence during the research phase of the buying experience can reduce the likelihood of ending up with a vehicle that you regret," emphasized Yoshizawa. 

For more tips when it comes to buying a new or used car, visit Mercury's blog.

About Mercury Insurance

Headquartered in Los Angeles, Mercury Insurance (NYSE: MCY) is a multiple-line insurance carrier offering personal auto, homeowners, and renters insurance directly to consumers and through a network of independent agents in Arizona, California, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia, as well as auto insurance in Florida. Mercury also writes business owners, business auto, landlord, commercial multi-peril and mechanical protection insurance in various states.

Since 1962, Mercury has provided customers with tremendous value for their insurance dollar by pairing ultra-competitive rates with excellent customer service, through nearly 4,100 employees and a network of more than 6,500 independent agents in 11 states. Mercury has earned an "A" rating from A.M. Best, as well as "Best Auto Insurance Company" designations from Forbes and Insure.com. For more information visit www.MercuryInsurance.com or follow the company on Twitter or Facebook. 

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SOURCE Mercury Insurance

FAQ

What are Mercury Insurance's (MCY) key car buying tips for 2025?

Mercury Insurance recommends following the 20/4/10 rule: 20% down payment, 4-year repayment term, and spending less than 10% of monthly income on transportation costs. They emphasize researching total ownership costs, including insurance, repairs, and fuel consumption, while avoiding buying more car than needed.

How does Mercury Insurance (MCY) recommend budgeting for a new car purchase in 2025?

Mercury Insurance advises consumers to set a realistic budget considering both purchase price and ongoing costs like insurance, fuel, and maintenance. They warn against overextending financially and recommend getting pre-approved for car loans before shopping to better understand affordability.

What vehicle inspection tips does Mercury Insurance (MCY) provide for used car buyers?

Mercury Insurance recommends checking exterior and interior damage, examining engine and undercarriage for leaks, inspecting tires and brakes for wear, conducting a test drive, and getting a professional mechanic inspection. They also suggest reviewing vehicle history reports through Carfax.

What is the average car ownership length in 2025 according to Mercury Insurance (MCY)?

According to the press release citing PBS data, the average length of car ownership has increased to almost 13 years, making vehicle purchases a significant life decision.

How does Mercury Insurance (MCY) recommend researching different vehicle models?

Mercury Insurance suggests comparing features like fuel economy, safety ratings, and reliability. They recommend watching in-depth reviews from automotive journalists on YouTube channels such as Motormouth and Redline Reviews for detailed vehicle information.