How to Buy a Used Car (Part 3 - Ultimate Car Buying Guide)
Many people are reluctant to buy a used car because they are afraid of getting burned. However, if you know what you’re doing, you can get an amazing deal on a great car. Here are some useful tips to help you get the best deal.
1. Know what you want. Settle on one or two models you really want to buy. Do your research. Consider factors that are important to you. Find the average sales price of the car from multiple sources to get an idea of what a good deal would be. Don’t just compare listed prices. Find out what the cars are actually selling for. For example, you can use eBay’s “Completed Listings” feature to check completed auctions to get an idea of the current market value of the car you want. Also, read reviews about the car from ConsumerGuide.com and CarandDriver.com. You may change your mind about a car after reading a review. There’s much more to a car than meets the eye.
2. Get a car under warranty. If you can afford it, you should get a used car that still comes with the original manufacturer’s bumper-to-bumper warranty. The fact that the car is still under factory warranty gives you some assurance that the car won’t have major mechanical problems. And if it does, you’ll be able to take it to a dealership and have it fixed for free. Used cars like that will be usually less than three years old. While still relatively new, the car will have already lost a lot of its value. That’s because new cars depreciate in value as soon they are sold, and the loss in value is the steepest in the first two years. When you buy a car that’s about two years old, you let someone else take that big depreciation hit. This strategy works especially well with American cars, which depreciate more rapidly than Japanese ones.
3. Sign up for CARFAX. Check the vehicle history report of any car you’re interested in.
4. Find out everything about each car. Find out about the number of previous owners, any accidents, mechanical problems, and maintenance history of the car. If possible, get the seller to put this in writing. If the seller won’t do it, be prepared to walk away.
5. Don’t buy a car that has had a major accident. Even if the car has undergone repairs, there can still be hidden damage.
6. Have the car examined by a mechanic. When you’re ready to buy a car, have it examined by a mechanic. This is called a pre-purchase inspection. You will have to pay for this, but if you buy the car without one and it ends up there’s something wrong with it, you only got yourself to blame. If the seller won’t let you do a pre-purchase inspection, be prepared to walk away. There’s no need for them to say no, unless they have something to hide.
7. Keep a clear head. Don’t fall in love with a car. It is okay to like the car you want to buy but don’t overdo it. You’ll end up paying more.
Buying from a Dealer:
8. Beware of common sales tricks. Read Car Sales: Trick of the Trade.
9. Get preapproved. If you need financing, get your financing at your local bank or credit union. If you can pay off the loan within a year and you have an adequate credit line and low APR offer, consider using your credit card to pay for the car. (Visa and MasterCard require dealerships to accept credit card payments of any amount. American Express does not.)
10. Don’t sign any As Is conditions. The dealer might try to slip these in without you noticing. You should have at least 30 days to check everything out. The whole point of buying from a dealership is that you’re getting at least a limited warranty.
11. Don’t buy an extended warranty from the dealer. If the dealership tries to sell you an extended warranty, turn it down. Even if you do need it, you can get it cheaper elsewhere.
12. Only haggle over price. If you’re buying your used car from a dealership, the down payment and monthly payment should be irrelevant. Ideally, you will already be preapproved for financing. And if you’re going to sell your old car yourself, there’s no need to discuss a trade-in. What you need to focus on is the final price of the car you’re buying.
Buying from a Private Party:
13. Find out how to transfer title. Each state has its own requirements. Read your DMV handbook to learn about the requirements for transferring ownership of a car. Don’t rely on the seller to know this.
14. Use Craigslist to search for cars. Since the listings are free, you will find a greater selection of used cars for sale.
15. Email offers. If you’ve done your research properly, you will know how much similar cars have sold for recently. Don’t just base your decision on the BlueBook value, which many people consider to be inflated. Imagine the lowest price you could possibly get on the car and ask the seller “Will you accept … for this car?” When you meet the seller and find out about additional problems with the vehicle, you should try to get an even lower price.
16. Meet them where they live. Set up a meeting by phone. Make sure you meet at the seller’s residence. There’s no reason for the car to be parked somewhere else. If they insist on meeting somewhere else, they may be hiding something from you.
17. Bring a friend. You never know who you’re going to meet. For your own safety, never go alone.
18. Be careful who you buy from. Find out as much as you can about the seller. When you go to see the car, you will find out where they live, but that’s not enough. Try to find out what they are doing for a living? And why are they selling the car? You don’t want to buy a car from some low-life. The best people to buy used cars from are professionals and international students. You can be sure they have had the money to maintain their car reasonably well and are under no financial pressure to defraud you. In addition, you should prefer female sellers over male sellers because men, especially young men, tend to have terrible driving habits, which of course affects the condition of their car.
Part 1 - Car Sales: Tricks of the Trade
Part 2 - How to Buy A New Car
Part 3 - How to Buy A Used Car
Photo Credit: brian-m
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