Regardless of how much car a person can afford, many people choose to always purchase used cars. The reason for this is they’d rather wait for the 30% value a car loses in it’s first year. The value decreases by nearly half that for each year up to year six, so waiting for the second year could save you thousands of dollars on a car that is equally as good. Many used cars are in such great shape they still appear new.
If you’re in the market for a used car, there are some things to look for prior to your purchase. Here are some tips to help you along the way.
Finding a Dealer
Not all dealerships are alike. In fact, some have bad reputations and there’s good reason for that. Many shady dealers will try to defraud you by masking problems with the car or adding on extra fees that increase the price of the car after you’ve already negotiated a price.
When searching for a dealership, read the dealership reviews. Also, get recommendations from friends and family. If they had a good experience they may still have the salesman’s business card. Ask for a referral.
Buying From a Private Seller
If you are contemplating purchasing a car from an individual, you won’t be provided with an accident report. However, you can still obtain a VIN report which will list any insurance claim history on the vehicle, which will also reveal accidents.
Usually, an individual will be more negotiable on the price, especially if they have just recently purchased or are planning to purchase a new vehicle themselves. A drawback to dealing with a seller is they can’t provide you with a warranty for the car.
Have a Budget
Before you start looking at cars, have a set budget. If you’re paying cash, know how much of your available funds you’d be willing to part with. If you’ll be financing, know the maximum monthly payment you can afford that won’t put you in a bind. Also, decide the longest you are willing to pay on a loan.
If you go over your budget, you risk putting yourself in a financial bind. Make a commitment to not go over what you have determined you can afford, no matter how tempting it might be.
Review Makes and Models
Know what you’re looking for, otherwise, you’re going to be looking at every used car within your price range, and that’s a lot of cars.
- Is there a certain body style you prefer?
- Do you need to seat a set number of people?
- Do you transport large items that require more room?
- How important to you is gas mileage?
You should ask yourself these questions and then find five or six cars that match your preference. Read about their safety features and ratings so you can narrow down your search. You should be able to narrow your list down to two or three models that are the best fit for you.
The Test Drive
The test drive should reveal a lot to you. Be sure to drive on streets as well as highway to get a feel for how it handles, how it turns and how it brakes.
Also, look at the odometer. The average car puts on 12,000 miles per year. If the odometer is under that, the car could be a steal. If it’s over that, inquire as to why. Also, ask if there are any maintenance records. If the car has high mileage but has been well-maintained, it could still be a good buy.
Inspect the tires to make sure the tread life looks healthy. If you have to replace the tires, that’s going to eat into your set budget. It may also give you more room to negotiate so that it evens out.
Last, inspect the interior and functionality of all the features. Is the condition acceptable to you? Check to see if the stereo works. Check if the AC cools, and make sure the turn signals are functional.
If you must use financing, be leery of financing offered by the dealership. Often times, this financing has higher interest rates and higher associated fees. The dealership may even be receiving a kickback for utilizing certain lenders.
Consider the benefits of refinance loans over auto loans. If you refinance your mortgage, you’ll come in at a much lower interest rate than you would on an auto loan. This could save you hundreds of dollars over the life of the loan.
Nothing about buying a used car is easy, nor should it be. Your auto is an investment in your future, so the better informed your decision is, the more likely you are to avoid any headaches later on. As you go through this experience, have patience and don’t settle. Eventually, you will find the right car and you’ll be glad you took your time.