Reminders When Buying a Used Car
View more related buyers guides
Published by TOP4 Team
Why buy a used car?
If you've decided to buy a used car, you've already made a smart decision. You can get a car that’s almost as good as a brand-new one without paying for the depreciation that whacks new car buyers as soon as they drive the car off the ground. Even cars that are only a year old are 20-30% cheaper than brand-new cars. You can save the money for insurance. You have to know that some used cars are still under the factory warranty since most new carmakers now sell certified used cars. For those who worry about the condition of the car, its history can easily be traced using the Vehicle Identification Number (VIN). Moreover, if you buy from a private party, the negotiation process can be less stressful.
Choosing the right used car
At the beginning of the car-buying process, many people already know the car that they want. However, make sure your choice isn't obviously exceeding your budget. Does it meet your current needs? You may also want to consider building a target list of three different cars in the same class, which are built for the same market but have different features and sometimes lower prices.
Save money by buying a second-tier car.
A used car’s value is based on its condition, mileage, reliability, performance and popularity. However, do you want the same used car that everyone else wants? If so, you'll pay a premium for it. In some cases, the difference is the nameplate. How much difference in price separates good-but-popular cars from their good-but-overlooked counterparts?
Research your prospective used car.
Used car shopping involves inspecting the vehicle to determine its condition. This process is simplified if you’re buying a certified used car that has passed a thorough inspection and is backed by a manufacturer’s warranty. However, while buying a certified used car removes a lot of the painful guesswork about the vehicle’s mechanical condition, you definitely have to pay for this service. Most new cars are sold with a three years / 36,000-mile warranty. Therefore, if you buy a car that is 1-3 years old with fewer than 36,000 miles on the odometer, it will still be under the factory warranty.
How much can you afford?
A smart shopper will consider how to finance the car at the beginning of the shopping process. This will avoid unpleasant surprise later on and help you make an informal decision that fits your budget. If you're going to take a loan, how much can you afford to pay each month? And for the down payment, how much cash can you put down to reduce the monthly payments? Answering these two questions will help you determine a realistic price range for your used car. Once you've figured out how much you can spend for a down payment, a monthly payment and the car’s purchase price, print out these figures.
Set up financing for your used car.
These are the ways to buy your dream used car: cash, financing through a bank, financing through an independent source (online lender or credit union), and financing through the dealer. However, financing through an independent source is highly recommended, since it will usually save money and give you the most control over the transaction. Other advantages of choosing this method are:
• Keeps the negotiation simple in the dealership
• Lets you shop competitive interest rates ahead of time
• Eliminates dependency on dealership financing
• Motivates you to stick to your budgeted amount
• Lets you arrange low-interest loans online
Where to shop for your used car?
The three most common places to buy a used car are private parties, the used car section of a new car dealership, and independent used car lot.
Private parties usually have the most reasonable prices. The transaction will be more relaxing to buy a used car from a party than to face a salesman at a dealership. Still, there are advantages of buying from a new car dealership. Many used cars are trade-ins. Dealerships usually get these cars at very low prices. If you make a little bit higher offer – but one that gives them some profit, you might just get a great deal. Moreover, many dealerships offer certified used cars that have been thoroughly inspected and are backed by strong warranties. The internet is an amazing resource, but you should still try the conventional sources. Ask friends and relatives if they're selling a used car. Keep your eyes peeled for “For Sale” signs in car windows. Scan the bulletin boards at supermarkets or in local schools and colleges. Finally, don’t forget old faithful newspaper classifieds.
Once you find a prospective car, call the seller before you go to see the vehicle. In this way, you can eliminate cars that have problems like excessive mileage or a salvage title. Verify the asking price in the ad. While talking to the seller, it's a good idea to set up an appointment for a test-drive. If possible, make the appointment during the day so you can see the car in the daylight and determine its condition more accurately. Also, ask for the VIN so you can run a vehicle history report.
Contact or visit a car dealer near you today.