5 rules for first-time car buyers

Red car in shopping cart

Buying a car doesn't have to be as bruising as some stunt on "Jackass."

Our 5 rules for first-time buyers can help you avoid all of the pitfalls and drive home with the right car or truck for you.

Rule 1. Don't think of a car as an investment.

Unlike a home, a car loses value every year. It really is just a washing machine on wheels.

The average new vehicle will lose 30% of its value during its first year.

That's why a very smart guy like Phillip Reed, the senior consumer advice editor at the auto Web site Edmunds.com, says a two-year-old used car is the best bet for first-time buyers.

Rule 2. Decide how much you can afford and stick to it.

You're buying a car to get you around, not impress your friends.

It shouldn't consume more than 20% of your take-home pay, and that includes everything from monthly payments to gas and insurance.

Spending more than that for some extra degree of cool is just throwing money away. And it cuts into how much you can spend on things like renting an apartment or hanging out with your buds.

Our auto loan calculator can determine the monthly payments for any deal.

Rule 3. Be a smart shopper.

Use the Internet to compare the features and prices of cars in your price range.

Narrow your choice to no more than two or three favorites and concentrate on finding the best possible deal among those models.

Interest.com's 10 smart moves for buying a great used car or truck can help you sort through all the choices to find the right one at the best price.

Knowing what you want, and how to get it, is the key to being an empowered consumer.

Rule 4. Be prepared to be snubbed.

Car salespeople make most of their money from commissions.

They often view younger shoppers as low-potential customers who lack the cash and credit needed to close a deal.

Just getting a test drive could prove difficult at some dealerships.

When someone does offer to help, don't be surprised if the salesperson ignores what you say and insists you'd be better off with a car or truck that isn't on your shopping list or even in your price range.

The salesperson doesn't know or care what's best for you. He or she is just trying to take advantage of your inexperience to push you into a vehicle that's been languishing on the lot and the dealership is desperate to sell.

This is no time to start deferring to your elders. If you're not totally satisfied with how you're being treated, it's time to move on.

Rule 5. Check your credit history before applying for a loan.

Don't risk being turned down for a loan because you don't know what's on your credit reports.

You may have never seen your credit reports before and a surprising number contain wrong information about bills that you've paid or debts that aren't even yours.

Go to AnnualCreditReport.com to find out what all three major reporting agencies -- Equifax, Experian and TransUnion -- are saying about you.

Each report will include information about how to fix mistakes or how to submit explanations for any valid negative information on the report.