Top 8 Used Car Buying Tips
Purchasing a used car can be a daunting process, filled with uncertainties about its condition and performance. However, there are proven tips for buying a used car that can increase your chances of a successful purchase. Here are some reliable steps to enhance both your search and the final outcome.
1. Start with your lifestyle
Your lifestyle significantly influences the type of used car you might consider buying. For instance, factors such as whether you live alone or have a large family, your typical travel distances (short local trips or frequent long road trips), and your location (city, suburbs, or rural area) all play crucial roles.
Similarly, your driving preferences matter. Are you drawn to the agility of a sports car? Do you value the space, stability, and comfort of an SUV? Or perhaps you prefer the versatility of a standard sedan? Once you’ve clarified these aspects, you can proceed to the next stage of your car-buying process.
2. Consider your budget
Budget is a crucial factor when purchasing a used car, whether you’re considering a $1,000,000 investment or a $10,000 one. This includes both the overall cost of the vehicle and how much you can comfortably allocate towards monthly loan payments.
A practical approach to estimating your monthly car payments is to reverse-engineer your budget. Start by deducting your existing monthly expenses from your take-home salary. Then subtract discretionary spending like shopping, dining out, and entertainment. The remaining amount can give you a ballpark figure for a monthly used car payment that fits within your comfort zone. However, it’s essential to leave room in your budget for additional expenses such as insurance, fuel, and maintenance costs associated with owning a car.
While used cars generally come at a lower price tag than new ones, this may allow for shorter loan terms with lower monthly payments. Keep in mind, though, that used cars may require more maintenance over time compared to new vehicles that typically have less wear and tear.
How old is the car?
Budget and the age of a car are often closely linked. Generally, older models cost less, though vintage and classic cars are exceptions that we won’t delve into now. Unlike fine wine, cars don’t improve with age. As a vehicle ages, its parts wear down, leading to potential breakdowns and the need for replacements.
According to Consumer Reports, the first areas of concern with aging cars typically include the suspension, brakes, and other components. The suspension system ensures smooth handling both on and off-road, while other components encompass automatic transmissions, power steering, alarm systems, interior and exterior lighting, windshield wipers, tire pressure monitoring, and more. These are critical aspects to consider when assessing the longevity and maintenance needs of an older vehicle.
How many miles does the car have?
Just like a car’s age, mileage is a critical factor influencing its cost. Generally, higher mileage correlates with a lower price tag. However, this comes with trade-offs. A vehicle with higher mileage typically requires more frequent repairs and part replacements. For those planning extensive driving or long-term ownership, seeking a used car with lower mileage is advisable to minimize future maintenance costs.
3. Decide if you’re buying from a dealer or a private seller
Next, it’s important to weigh the trade-offs between buying from a dealer versus a private seller. A private seller is an individual selling their car, as opposed to a dealership which specializes in buying and selling vehicles. While negotiation is possible with both dealers and private sellers, dealers often have overhead costs and business expenses that may limit their flexibility in price negotiations.
It’s worth noting that financing options for private sales may be available through some lenders, although they can be harder to secure compared to financing offered by dealerships.
A note on used car warranties
New cars typically come with manufacturer warranties, which guarantee coverage for certain repairs within a specific time period or mileage limit, providing peace of mind to buyers.
However, when purchasing a used car, the original manufacturer’s warranty may have already expired. It’s important to inquire with the seller about the warranty status. If the warranty has expired, you can explore options such as contacting the manufacturer to inquire about extended warranty plans and associated costs. If extending the warranty isn’t feasible or cost-effective, you’ll need to budget for potential repair costs on your own.
4. Vehicle history
Once you narrow down your car choices, it’s crucial to conduct thorough due diligence with a background check. Numerous services offer comprehensive reports on almost any vehicle, providing vital information.
Key issues to look out for in a vehicle history report include accidents, water damage, incomplete repair history, and failed inspections. These details can significantly impact your decision-making process when buying a used car.
5. Get prequalified for financing
When shopping for financing, consider getting prequalified before making an offer. This preliminary step can provide insights into your credit status, estimate the amount you may be approved for, and streamline the purchasing process.
6. Take it on a test drive
It’s essential to take the car for a test drive before buying. Firstly, you’ll gauge if it feels comfortable and suits your needs. Secondly, you can spot common issues like worn brakes, rough acceleration, or unusual sounds. Drive on roads similar to your daily routes for a realistic assessment. Skipping a test drive is akin to purchasing shoes without trying them on — you won’t know if they’re the right fit.
7. Pick one and negotiate!
Once you’ve decided on a used car, you might consider making a counteroffer on the asking price. Begin by researching online resources that provide fair market values based on factors like the car’s year, mileage, and overall condition. Keep this figure in mind and aim to negotiate towards the lower end of the estimated range to reach a fair agreement.
8. Apply for your loan
Before heading to the dealership, consider applying for your loan online with selected lenders. You’ll typically need details about the car you’re purchasing, the dealership’s location, the financing amount, and the terms you prequalified for, if they’re still applicable. Personal information such as your residence, income, and employment status will also be required.
Your lender will review your credit history and other relevant factors to determine your creditworthiness. If approved, you can visit the dealership armed with your loan terms and finalize the purchase of your preloved car.
Ensure you’ve budgeted, researched, and thoroughly assessed your options beforehand. With your newfound knowledge about buying used cars, you’re well-prepared to navigate the market confidently.
In Conclusion
Armed with these tips for buying a used car, you’re ready to dive into the shopping process. Take it step by step, and soon enough, you’ll find a used car that’s a perfect fit for you and ready to call your own. Happy shopping!