Like any major purchase, buying a car is a big decision that merits research and preparation. While buying a used car from a dealer is a smart choice that can save you money, it’s also process that involves more time and effort on your part. Verifying the condition and history of a used car is the most important thing you can do to save yourself hassle, stress and money in the future.
If you are up for doing a little leg work, the advantages of buying a used car outweigh the risks. The alternative to buying a used car is to buy new, but the value of a new car drops as soon as your drive it out of the lot. After the first three years, a new car’s value depreciates up to 60%.
On top of the savings, you can get more for your money with a used car in good condition:
* Used car shoppers can negotiate bigger bargains.
* Insurance is often less with a used car.
* With a lower price point, you can afford more amenities.
Still, it doesn’t take a lot of experience to know why so many people still prefer to buy new cars. Buying a used car is a gamble. Fortunately, consumers have more tools available today than in the past, enabling them to easily trace a car’s history to verify to true value and condition of a used car.
Do your Research
Do you already know what type of car you want to purchase? Research used car prices online and make sure that your car of choice is within your budget. Read car reviews and consumer reports to make sure your sights are set on a dependable car. If your choices are still open, research comparable cars from less popular brands – Camrys and Accords, for instance, sell for around $3000 more than similar Galants and 626s.
Go to a used car dealership knowing the car you want and what you are willing to pay for it. If you go open minded, you may get overwhelmed with choices and looks and may not be happy with your purchase afterward. Don’t rush into purchasing a car. Test drive different cars of the same model to get a feel for how the car should handle.
Check the Car’s History
You’ve found a model that suits your budget and criteria, and it handles well when you drive it. Now it’s time to get investigative. Check the title or bottom right windshield to find out the Car’s VIN (Vehicle Identification Number). Order a car history report through a company like CARFAX for about $35. The report will include warranty information, safety and reliability ratings, and consumer ratings and comments. Not all accidents are reported, but this is a step worth taking.
Red Flags: major damage like a flooded engine; accidents; formal rental car (may be poorly maintained); registered liens against the car; mileage that doesn’t match the odometer (This means the odometer has been dialed back to hide a car’s true mileage. This is a red flag on the dealership.)
Befriend a Mechanic
Once you’re interested in buying a car, bring a mechanic to take a look at it. Though many cars are ‘certified’ these certifications are often backed by insurance companies. Certifications from the manufacturer hold more weight, but it’s still a good idea to bring a third party mechanic as they’re trained to spot potential problems you wouldn’t know to look for.
Negotiating
Negotiating is the name of the game at used car dealerships, but this doesn’t mean all dealerships are out to take advantage of you. First, treat your sales person with respect.A few tips on negotiating:
* Start negotiations as soon as you inquire about the car. If the car is priced at $14k, tell the salesperson your top price point is $13k and ask if it’s worth your time to test drive the car. This will signal that you’re a serious buyer, and a ‘yes’ response knocks off $1k right off the top.
* Calculate the total price of the car, including all of the fees the dealership will tack on. Negotiate based on this total price, not the sticker price.
* If you’re serious about a car, offer $2-3k less than the asking price and be prepared to meet somewhere in the middle.
* If the price feels too high or the sale person is pushy, walk away.
* If you are financing the car, compare the rates the dealership offers with a bank's. Finance departments have a way of playing with numbers so if you don’t consider yourself a numbers person, bring a friend along to make sure your financing works to your best interest.
* Ask your mechanic if the car is in top condition. The value of a used car is based on condition, mileage, performance, reliability and the popularity of the model. You don’t want to pay a premium for a popular car in poor condition.
While visiting multiple dealerships and ordering a car’s history may not be fun, it will help reduce your chances of buying a beautiful car that will break down on your first long drive. Take your time making a decision and try to enjoy the search. Buying a car is exciting – even a used car is new to you!
