The best cars to buy

Transportation is one of the three biggest expenses for most Americans. While not everyone needs to drive a car, the decision on what to drive for those who do drive should be pretty easy.

For most of us, the choice of what automobile to buy or lease should boil down to three factors:

1) Safety - we should buy one of the safest cars on the market. It makes no sense to compromise on this factor.

2) Utility - once we have a list of safe cars, we should find one that meeds our minimum needs. It makes no sense to buy the safest compact car if you are hauling five children and a spouse around.

3) Cost - once we have a safe car that meets our needs, given almost all cars are depreciating assets, we should buy or lease the one with the lowest cost of ownership. These costs include depreciation, fuel and insurance.

We can find the safest cars from the Insurance Institute for Highway Safety (IIHS). While there are other safety ratings from other organizations like the NHTSA and Consumer Reports, IIHS gets us in the right ballpark. It is highly unlikely for a top rated car from IIHS to get poor markets from another organization.

The utility consideration should be straightforward. Importantly, don't buy or lease for your immediate utility, but your likely utility over the life of the vehicle.

Cost is not just the headline cost to buy or lease the vehicle. As mentioned above its everything. For new and used cars, check out kbb.com for their 5-year cost of ownership information. Given the depreciation of most vehicles, you will usually be better off buying or leasing a used car rather than a new car. However, this is only the case if that used vehicle has been maintained and driven properly. As such, go for a certified vehicle unless you are highly confident in the condition of the vehicle.

Imagine you are a new driver who doesn't need a big car, doesn't have a lot of money, and just wants the safest and cheapest car around. What should you buy?

Best Cars to Buy:

#1: The 2018 Kia Soul is an IIHS Top Safety Pick+ winner and has a KBB 5-year cost to own of ~$30,000.

#2: Hyundai Elantra (~$31,000)

#3: Toyota Corolla (Top Safety Pick)

The 5-year costs really start to increase have #3 or they are only Top Safety Picks (rather than Top Safety Pick+)