Your Guide to Buying a Used Car
If only you could buy a used car like you buy your groceries; you pick one off the shelf, you toss it in your basket, and you pay for it at the cash register. But a vehicle is a more complicated purchase. You’ll probably have to get financing for a used vehicle, which is a process in and of itself. And then you’ll need to take steps to ensure that the car you’re buying is in good condition.
Buying a used car definitely isn’t as easy as buying groceries. But it also doesn’t have to cause you stress or anxiety. Just follow our simple guide to make a successful used vehicle purchase.
- Determine Your Budget
The first thing you need to do is determine what your budget is. Pour over your finances and see how much money you can pull together. Some used vehicles might be cheap enough to buy out-of-pocket. Lots of people pay cash for vehicles that cost between $2,000 and $4,000. Keep repair costs in mind, too. If you’re going to have to pay for new tires after you purchase the vehicle, you’ll want to factor that into your costs. Maintaining your car is a constant expense (never a bad time to get yourself a car cleaning kit).
If you need to get financing, determine how much money you can put toward a down payment. The higher your down payment, the lower your auto loan rate may be.
- Get Pre-Approved for An Auto Loan
Auto loans are commonly used to purchase used vehicles. On average, auto loans have a term of about five years. Because the term is so short, the interest rate tends to be high. But it’s hugely beneficial to get pre-approved for an auto loan. First, you’ll have a realistic budget. Second, you’ll be in a stronger negotiating position with dealers (we’ll get to that at the end). Third, you won’t get burned by high rates that come from dealer financing.
- Find the Right Car at a Trustworthy Dealer
Once you have financing down, it’s time to begin your search for the best used car. Do research on makes and models of different vehicles and make a list of the ones you like. Then, narrow it down to two or three vehicles that usually go for a price that fits within your budget.
Next, see if you can find those vehicles at your local dealerships. There are lots of dealerships that sell used cars, but not all of them are trustworthy. Some dealers may try to conceal deficiencies in a vehicle. Other dealers may try and sell a vehicle for a price that’s much higher than the going-rate. Try and find dealers that sell certified pre-owned cars. For example, if you find a dealer that offers certified Mercedes-Benz cars for sale, it means they sell used vehicles that have been maintained using only authentic Mercedes parts. Certified used vehicles are typically heavily maintained and drive better than other types of used vehicles.
You can also buy from a private seller. Private sellers are usually citizens who are just trying to get rid of an old vehicle, and they can offer great prices. Obviously, private sellers won’t be selling certified vehicles, and you’ll want to be sure to meet them in a public place that’s safe. But you can get some of the best deals from these sellers.
- Shop Prices
Never inquire with only one seller. Always visit different sellers and see which one offers the best price and the best quality vehicle. A used car is an expensive investment, so it’s important not to rush your purchase.
- Test Drive
Test drive the vehicle you’re thinking of buying. You’re test driving for two reasons. First, you want to make sure that the car runs well. Second, you want to make sure that you like the feel of the car, that you enjoy driving it. Be sure to go driving on the freeway, and test out the car’s turn radius, A/C, and headlights. Some features, like the radio, don’t need to be perfect. Worry about the most important components first, like the headlights — you can always upgrade your car sound system later.
- Inspect the Vehicle
The biggest concern when you’re buying a used car is that you’ll pay too much for a vehicle that’s in poor condition. A car is a huge, intricate piece of machinery. A car could have a nice paint job, but have bad defects.
Always arrange for the vehicle to be inspected by an auto mechanic of your choosing. For a small fee, you can have a mechanic inspect the vehicle and identify the condition of the internal components. This is a common practice when you buy a vehicle. If the owner or dealer refuses to let you take in the car for inspection, it’s a red flag that the vehicle may be in poor condition.
Finally, it’s time to negotiate the price and seal the deal. If you’ve been pre-approved for a loan, try and negotiate the price below the loan amount. Don’t let the dealer price the vehicle higher; insist that you’ll only buy at the price of your loan. Many dealers will agree to this so long as the vehicle you’re buying isn’t commonly sold at a price higher than your loan.
Congrats! Once you’ve carefully navigated each of these seven steps, you’ll be driving home from the dealership in your newly-owned used vehicle. Remember not to rush the process, and only buy a vehicle that you’re truly going to be happy driving. A used car is a large investment, so don’t settle for anything.