Assess your total cost of ownership
Because alternative fuel cars are cheaper to own than their gasoline counterparts, thinking about the total amount of money you will spend on car expenses, versus just the sale price, is even more important. In addition to calculating your car payment, you'll need to make cost estimates for your fuel, depreciation, maintenance and repairs, as well as auto insurance.
It's easy to get estimates for these costs online with a few handy tools. For insurance, go online for a custom quote or call your agent. For fuel costs, the handy Vehicle Cost Calculator from the Alternative Fuels Data Center at the Department of Energy helps compare cars with different powertrains, such as an electric car to a gasoline car.
Don't assume you qualify for the lease deal or the low interest rate
The deals that are often shown in advertisements usually have stringent credit requirements, and/or hefty down payments. Generally, only about 10 percent of car shoppers qualify for the best deals offered in advertisements, so unless your credit is top notch, you may not be able to get it.
That actually might not be a bad thing, especially if the deal requires putting thousands of dollars down and you don't have a car to trade in.
Shop around for the best interest rate
Don't assume that the dealership can get you the best interest rate, either. Get quotes from national lenders online and contact your local lenders to see what they can offer. Don't forget credit unions, which often offer the best interest rates on car loans.
Even if you do qualify for that zero-percent or low interest loan from the dealer, you may still save money in the long run by taking the cash rebate and getting your loan elsewhere. If a dealer offers an interest rate that seems to good to be true, exercise caution and be sure you are not signing a contract that says the rate is contingent upon approval.
Determine if there are any federal and state incentives
While federal and state tax incentives are a thing of the past for hybrid and diesel cars, there are still incentives available for plug-in hybrids and electric cars. Federal tax credits range from $2,500 to $7,500 for these cars. Some states and even some cities and counties are offering different incentives, too. These incentives range from tax credits, to actual cash and to reduced rate or free chargers for your home. Many states also allow drivers of these vehicles to drive in the carpool lane as a solo driver, which, for some commuters, is a considerable perk.
Research all other discounts
While automakers tout "cash back" deals in their advertising, there are other cash discounts that many car buyers qualify for -- and these discounts can be combined with other cash back offers. If you are buying a car and are a student, recent graduate, a former or current military member or even a member at certain credit unions, there may be additional rebates you can get. Check the manufacturer's website for a list of these offers.