The correct sentence is:
Mercedes decidió comprar un auto nuevo
Don't forget to include accent marks in Spanish words when required. In this sentence, the word decidió comes from the verb decidir, that is, is the conjugation of this verb for the third person singular in the preterite tense. The preterite tense is one of two simple past tenses. It is used to describe actions that took place or were completed at a certain point in the past.
