There are four steps to choosing a vehicle: know your goals and budget, evaluate vehicle ratings and safety, examine automobile reports, and evaluate insurance costs.

Know Your Goals and Budget. Before you can choose a vehicle, you must know your goals and your budget. What is important to you? Have you written down your goals? For a good discussion on finding out what is important to you, review Section 2: Setting Personal Goals.

Are you living on a budget? It makes no sense to purchase a vehicle on which you cannot afford to make payments. It is important that the money you spend on a vehicle does not take away your ability to achieve your other important goals. Make sure you can afford the vehicle by knowing your goals and budget.

If you are planning to finance the vehicle (which I do not recommend), are there sufficient funds to cover the costs of the vehicle and still attain your other personal goals? In addition, are you putting aside money each month to fund the purchase of another vehicle once it is no longer cost-effective to run your current vehicle?

Evaluate Vehicle Ratings and Safety. As you are making decisions about an automobile, remember to pick a vehicle that is safe for your family. There are a number of good websites that evaluate vehicle safety records. A good place to start is the National Highway Traffic Safety Administration site at www.Nhtsa.gov. Other sites that evaluate vehicle safety ratings include Safer Cars at www.Safercar.gov and the Insurance Institute for Highway Safety at www.Iihs.org. Each of these sites offers information on safety ratings, crash tests, and other important information about specific vehicles. Find out the safety ratings of the vehicles you are interested in.

Examine Automobile Reports. In addition to looking for a strong safety record, look at overall costs of the vehicle, including its repair record. How many miles per gallon does the vehicle get on the highway and around town? With gas prices at nearly $3.00 per gallon, having a fuel-efficient vehicle makes a lot of sense.

Mileage and repair information can be found at a number of different websites, including Consumer Reports at www.Consumerreports.org. Consumer Reports gives relatively unbiased information on mileage and repair histories, so you can determine which vehicles have the best track records on repairs and which vehicles will be less costly to operate. This site has a lot of great information on mileage, repairs, and vehicle ratings.

Evaluate Insurance Costs. Pick a vehicle that is inexpensive to insure and drive. The Insurance Services Office (ISO) rates each vehicle on its loss history, a study on how much it costs to repair the vehicle, using a number between three and twenty-seven. Generally, the higher the number, the more expensive the vehicle is to repair and the more expensive the coverage. Sports cars, high performance cars, and SUVs are more expensive to insure. Find a vehicle that is less expensive to insure and cheaper to repair, and you will generally pay lower costs for insurance. Work with your insurance agent when you are considering purchasing a new or used automobile.