We got our first car in 2005, the year we came to this country. That was a used car we saw on Craigslist. There were hardly any people to turn to for tips for the car those days. We were new and were still getting accustomed to the car buying process. Now after 10 years and having purchased 2 more used cars, here are some basic tips for anyone who’s looking to buy a used car in the US.
Buying a used car isn’t as easy as it sounds. More time you spent in searching and researching, the better deal you’ll make, most likely. If you’re dealing with this for the first time, here’s how to navigate the dealership and walk out with a reliable automobile instead of a lemon.
Have a fixed Budget
Having a budget is important. When you don’t have a budget, you tend to spend more than you can afford. Of course, setting a budget can be difficult without knowing what kind of car you want.
Know The Car You Want
Knowing the type of vehicle you want can help you assess whether your budget is reasonable. It also helps you avoid the classic sales pitch where a salesman talks you into a vehicle that he wants to sell you rather than something you can afford.
When you don’t have any idea what you want, it becomes all about squeezing as much money out of you as possible. Don’t let that happen.
It’s all about aligning your budget with your goals and wants. Be realistic about both. If you want a Ferrari, you’re going to have to pony up quite a lot of money. That’s why most people don’t own Ferraris.
On the other hand, you probably want a vehicle that’s reliable, and those can rarely be had for $500.
The used cars at Carmax or online listings would be a great example of where to start looking for price comparisons on makes and models. Just make sure you know what you want before you step foot on the dealer’s lot.
Checking forums can be a great way to research both dealers and vehicles. Other people probably have already had problems with a vehicle you’re considering. Opening up an account with a car forum targeted at your desired make and model can save you thousands of dollars.
For example, Honda-Tech.com is a forum for Honda enthusiasts. If you sign up there, you will be in the company of professional and amateur mechanics and people who are generally very knowledgeable about Hondas.
This is a great place to ask questions about a Civic or Accord you’re considering buying. Let’s say you’re considering a Civic, but you heard that the newer models have had problems with second gear.
Sure enough, you hop on the forums and find out that the 6-speed transmissions in some Hondas grind going into 2nd gear. But, there’s a simple fix for it. You could decide to walk into a newer Civic purchase knowing that you’d have to fix the transmission or you could opt for another model year that didn’t have those problems.
Autotempest and similar forums exist for a variety of different manufacturers, whether you’re considering a BMW, a Toyota, A Ford, or GM product.
Look For Used-Car Auctions
A used-car auction will get you into a used car for much less money than what you’d pay at the dealership. But, these auctions are usually crowded with dealers. So, you sort of have to know how to outbid or avoid them.
If you do decide to go this route, take a friend who has experience buying vehicles from a dealer.
Find Out What The Certification Process Consists Of
Does the used car dealer offer certified used vehicles? Great. Now, find out what that certification process is. Some used car dealers will (unfortunately) use this as a sales gimmick to get you to feel safe about the vehicles they sell.
Get It Inspected By Your Own Mechanic
Always have a used vehicle inspected by a mechanic you trust. Unless you know your way around a vehicle, you’re going to want a second opinion from an expert.
Think Before Financing Through The Dealership
There’s a reason why they often call them “stealerships.” When a dealer offers to finance, stop. Go talk to your local bank. Dealer financing is almost never a great deal because the dealer cuts another deal with a preferred lender and is allowed to charge additional interest on the loan to you.
The difference between what the lender offers and what you’re offered by the dealer is pocketed by the dealer.
For example, a dealer might offer you 10 percent financing on your vehicle. Meanwhile, the bank they’re going through to secure the funds for you is charging the dealer 8 percent. The difference – 2 percent – is pocketed by the dealer.
Instead of taking this deal, you should go directly to the bank. Although I have a very different opinion about dealer financing. When we bought our Toyota Camry, we got a 0% car loan from Toyota Finance.
I tend to believe the fact that loans on new cars are cheaper than the loans on used car as the valuation of used cars is a difficult task. Lending for a used car is riskier than lending for a new car.
Be Willing To Fold
This is the first rule of negotiation, be prepared to walk away. Sometimes, you just can’t get a deal. That’s OK. You don’t have to buy or even consider every car out there. You could show up to a buyer’s house or a car dealership and find out that there’s something wrong with the vehicle that you didn’t notice in the ad.
Being willing to walk away from a deal means that you’re not emotionally attached to the car before you’ve given it a test drive and verified that it’s mechanically sound.
This is one of the best ways to avoid being taken. It’s also something a lot of people have trouble doing. Stay objective, be honest with yourself about how much you really know about the vehicle and the seller, and you should be fine.
Martha Wood is a car loan officer. She loves sharing her insights online. Look for her posts on many personal finance blog sites.
Johnson McGee says
Learning the different percentages that have to do with financing is a great idea. If you educate yourself, you can know when you’re getting a good deal. I have been thinking of trading in my car recently. I want an SUV so that I can go camping more often.
Charlotte Eddington says
Your comment about making and keeping a budget, is a great idea. Cars range from cheap to extremely expensive. If you don’t create and stick to your budget, you might end up paying too much for your car. Thanks for sharing your used vehicle dealer tips.
Thank you for tips.
I like that.
Kyle Ross says
These are some great tips, and I appreciate your advice to know what kind of car you want. By making this decision and staying firm, you won’t be tempted to purchase a different one the dealer talks you into. That could lead to a hasty purchase, and you could lose money, especially if you don’t know much about the other type. Thanks for the great post!
Natalie Darcy says
I agree that having a fixed budget is essential for this type of thing. If you can’t do this you can accidentally pay the price of a brand new car. Forums are also essential, but pretty confusing. I have had trouble with these in the past so I appreciate your detailed tips and explanation. Thank you for such a helpful article, I will be applying your tips when I finally purchase a used car of my own!
Lauren Woodley says
The car that I have driven for 10 years didn’t pass inspections this time around, which means it’s time for me to buy a new car. That being said, looking for a new used car can be difficult and somewhat overwhelming so the tips you give to make this process easier were definitely well received. Specifically, the suggestion you give to get the car inspected by a mechanic before buying it. I think that this could definitely be beneficial because it will give you a thorough look inside of the car and see if it is running properly. Overall, this will help you get a reliable car that will run correctly for a long time. Thank you for sharing!
You are exactly right. The more research you can do the better it will be for you in the long run. Thanks so much for sharing your thoughts.
Jason Strong says
I’ve been saving my money over the last couple of years to buy a car and I think I finally have enough. One mistake that I made was that I didn’t research what kind of car I would want and then set a budget. I see that I should have done that first, so I need to go back, research a car, and then set a budget for myself and not break it.
Simon Brooks says
I definitely agree, having a budget is one of the best tools you can put in your belt before you go out looking for a new car. A budget is a great way to make sure you don’t overspend on the car and that you’ll still be able to find something in your price range. Of course, when coming up with the budget, you also want to make sure that you include the cost of any repairs that the vehicle might need later.
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i like it very much
can you not be a bit more elaborative?
Deedee Lewis says
I agree with your tip about having a used vehicle inspected by a mechanic you trust. If the used dealership allows it then it would be helpful in the car buying process so that you know exactly what you are getting. I will for sure keep these car buying tips in mind for the next time I’m in the market for a car.
Stacy D. says
there are lots of other cost efficient websites for vin lookup: trustvin.com, for instance