The car business, that is. What do we mean insane?

Well, the car business is big, BIG business. The average new car MSRP today is around $20,000 (weighted from approximately $18,000 domestic, $23,000 import). To put that into perspective for you: for every Dodge Intrepid that Chrysler sells, Kelloggs has to sell 6,700 boxes of Apple Jacks to achieve an equal amount of sales at the retail level.

On top of having a wondrous sales price, the car business has a large capital asset barrier to entry, which in theory allows the car makers to sell cars at higher profit margins. (Chrysler reportedly makes over $10,000 profit on each new Grand Cherokee it sells to its dealer franchisees.) Even in a climate which has a shrinking number of manufacturers, the choices for the consumer have been expanding, as each company tries to find niches in which to build highly profitable vehicles.

What do all these insane figures and business trends mean to you, a Foolish car buyer?

Well, more choices are probably good for consumers, provided that consumers stay informed about the choices. It is important to remember here a critical concept: You don't want to be sold a vehicle by a salesperson you've known all of three hours. Instead, you want to purchase the vehicle you've already picked out yourself, preferably in the comfort and convenience of your own home. This idea alone will save you a great deal of time and money if and when you set foot on a car lot.

If this is so, then you have to do some homework in order to find your top choices. Here in Step 3 of this Foolish Car Buying process, we will find our Big Fit, and in so doing will narrow the field substantially.

As a consumer you are best served if you compare apples to apples. In car buying terms this means that when shopping, you should compare vehicle features within a segment. That is, look at what Ford's full-sized pickup has to offer compared to that of Chrysler, GM, Toyota, Nissan, and all the other entries in that vehicle niche. If, however, you find yourself looking through the buff books, exhibiting the same enthusiasm for the Ford F-150 (a truck) as for the Porsche Boxster (a sports coupe), you are either totally car crazy or you haven't narrowed the field to a manageable level by determining your Big Fit.

So, before you go thumbing or clicking through Edmund's (a buying guide), Automobile Magazine, or old reports from Car & Driver, take out a blank piece of paper and a pencil and determine your Big Fit. Here's how:

Draw a vertical line down the page from top to bottom about 2 inches from the right edge. Inside that 2-inch right-side margin, vertically list these vehicle categories:

1. Sub/Compact
2. Family sedan or station wagon
3. Sports Car - sedan/coupe/convertible
4. Minivan
5. SportUtility Vehicle
6. Pickup Truck
7. Full-Size Van or Conversion Van
8. Luxury Sedan

Next: on the left side of that vertical line, write down your answers to the following five questions, which we call your Foolish Vehicle Use Profile. Leave the most space for the fifth question, since it is the most important.

1. How many miles a year do you think you're going to put on this vehicle? (A guesstimate is all that is needed. If you don't know, base it on the current vehicle's use. Example: 15,000 miles/year.)

2. How much time, on average, per day, will you be spending in the vehicle? (Again, a guesstimate. Use all drivers lumped together. Example: 3 hours)

3. What type of driving will the vehicle be used for? (Example: 60% city, 30% highway, 10% off-road)

4. Write down the budget numbers you came up with in Step 2. (Example: $5,000 down, with a max of $350 per month over 3 years)

5. Write down all the reasons that you want and need this vehicle. This is the key question. Use this brainstorming technique: quickly write down whatever pops into your head (having to do with reasons to buy the car, that is. We're not interested in your impure thoughts just now). Keep asking yourself, "How am I going to use this vehicle?" The longer the list, the better. We've provided some examples below. Don't restrict yourself to these, but use them as a guideline for your potential choices:
   1. commute to and from work
   2. take Billy, his seven friends, and all their equipment to and from hockey practice twice a week
   3. go on extended (1 week) family vacations
   4. go camping
   5. do daily errands (must have cargo space for 8-plus bags of groceries)

   Now go back through these reasons that you want and need this vehicle, and underline the most important points. You'll probably find three or four primary uses which will make up 80% to 90% of the vehicle's actual use time.

   Now for the tough part. Based on your answers to question #5, begin crossing out the major vehicle groups that don't fit your vehicle use profile. In other words, if one of your key uses is "take Billy, his seven friends, and all their equipment to and from hockey practice twice a week" then go ahead and cross out "sports coupes" because these vehicles are designed as two-seaters. (You can revisit the idea of buying a Lamborghini once Billy is out of the nest, grown up, and playing left wing for the Toronto Maple Leafs.) This "negative elimination" is very effective in helping us to match a vehicle group to our needs.

   Even after you've winnowed down the list, you'll be left with a large choice of vehicle makes and models to sort through in Step 5. You may find that after performing this negative elimination you still have several categories left. If so, examine the rest of your answers to question #5; see if any points jump out and eliminate a vehicle category.

   If you still find yourself with several categories, use your answers to the first four questions in order to zero in more precisely on your needs. For instance, each one of these vehicle segments has vehicles that are "low-end, mid-range and high-end" with regard to price, so perhaps you could lop off all the high-end vehicles in these categories.

   You might decide, for instance, that those eight hockey players would wreak havoc on the new leather-and-burl interior of our 1998 $49,195 stickered Lexus LX450 Sport Utility Vehicle (and yes, that price is before the $112 optional floor mats!). Of course, the Ute segment has become so popular of late that the manufacturers have swarmed to it like flies to --- well, you get our point. In fact, not only has this segment split into price levels, it has splintered into several size-segments, as you can now buy a "mini" Ute, a regular-sized Ute, and a super Ute.

   If by this time you're down to one vehicle group, you've slam-dunked the Big Fit! Congrats: you've eliminated 80% of the choices available to you as a consumer. Now it's on to Step 4, where we'll determine if we are predisposed to being "new" or "used" car buyer. Until then Be Foolish, and buckle up!