25 Jan How to Buy a Used Car
Purchasing a used vehicle instead of one that is brand new is a great way to save money when buying a car. After purchasing a new vehicle, you can anticipate a depreciation as soon as you drive off the dealer’s lot. When buying a used car, the original owner bears the burden of the steep depreciation during the first years of its ownership.
When buying a used car that is out of warranty, more maintenance may be required, and the financing costs may also be higher. You will save a significant amount of money if you purchase a vehicle with a low ownership cost and a high predicted reliability rating.
You can follow the steps for how to buy a used car in this article to find the right one, get financing that fits your budget, pay a fair price, and minimize the chances that you’ll end up with a vehicle that’s unreliable, overpriced, or unsafe.
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How to Buy a Used Car: 9 Tips
1. Set Your Budget
There is more to budgeting for a used car than looking for a pre-owned car, truck, or SUV that comes with an affordable monthly payment. You need to look beyond the monthly payment to get an accurate picture of how much the vehicle will cost you overall. Your loan cost, how much you’ll pay to insure your new ride, parking, and maintenance costs all factor into your car loan cost. Our rankings and reviews of used cars include information on how much ownership will cost you. Additionally, our insurance hub offers tips to help you find the right coverage.
In today’s market, used car buyers have more resources available to them than ever before! These resources give information on repair costs, frequent problem types, and reliability. Buying a used car can be expensive, so it’s essential to think about the cost of auto insurance when shopping. Rates can vary significantly based on the model you choose. Here you can find the most affordable car insurance coverage for your vehicle and find the right coverage at the lowest price.
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2. Get Car Loan Pre Approval
Getting a preapproval for a car loan beforehand gives you more power and ease when starting the shopping and buying process. As you begin researching a car, you will find this helpful in narrowing down the models that will be best suited to your lifestyle and, most importantly, your budget. Since you know you have been pre-approved for the loan, and dealers know you’re a “qualified buyer,” you’ll have more control during the buying and negotiation process.
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3. Check the Prices for Used Cars
It is estimated that by 2020, used cars will sell at an average price of around 22,000 U.S. dollars. The average price of a new car or light truck is almost 17,000 U.S. dollars more than the average price of a used light vehicle.
It is now easier than ever to determine a used car’s value through online tools. However, some vehicles still require more thorough research because the market is constantly fluctuating.
Using an online estimate tool is the best way to determine what your car is worth. Several free resources allow you to plug in basic information about your vehicle and receive an instant value estimate that you can print out. Below are some popular resources:
Kelley Blue Book
Usually abbreviated as KBB, Kelley Blue Book is an online car valuation site that provides car value estimates. The value of your car is determined by the make, the mileage, and the color of your vehicle, among other details. The KBB will give you an instant cash offer for your car based on its value if you are thinking about selling it. The website makes it possible for you to find out the price of both new and used cars, as well as view vehicles for sale at dealerships in your area. You can also compare a used car rate on this KBB official website by clicking here.
Edmunds’ car appraisal tool is similar to KBB. Still, it uses a more in-depth appraisal tool that determines your car’s value by considering whether or not it was in an accident or had cosmetic damage. Using Edmunds’ website, you can learn about new car pricing and see what used cars are available in your area. To assist you in making a car buying decision, Edmunds publishes comprehensive vehicle reviews and long-term results of field tests.
National Automobile Dealer’s Association
NADA uses slightly different criteria than KBB and Edmunds to determine your vehicle’s value. According to NADA, wholesale prices, current market prices, and demand for cars in your area are the most critical factors. The car value appraised by NADA tends to be higher than that calculated by KBB or Edmunds, which is something to consider. However, NADA doesn’t provide a used car marketplace, nor do they offer a variety of vehicle comparison tools.
4. Check the Vehicle History Reports
Since 1954, the U.S. has assigned vehicle identification numbers (VINs). At that time, industry standards did not exist, and each manufacturer-assigned VINs differently. As one of the first steps towards the standardization of VINs, the National Highway Traffic Safety Administration created a 17-digit VIN system in 1981.
The VIN can be compared to a fingerprint as no two VINs are the same. VIN numbers contain the following information:
- Manufacturers of automobiles
- Country of origin
- Vehicle assembly plant
- Engine type, model, and body type
- The year of the model
Other sites, like CarFax and AutoCheck, charge fees for a vehicle history report but provide more helpful information, such as accident history, service history, oil changes, and transmission replacements.
5. Contact the Seller
There are many places to purchase used vehicles, and many people obtain financing for used cars as well. There is both a strong and weak point in terms of service, ease, and pricing. To make an informed decision, you should find out as much as you can about the dealership or private seller from whom you plan to purchase the vehicle. Getting the Better Business Bureau or a consumer protection agency’s opinion on a company is a great way to determine trustworthiness.
Buying From a Private Party
Private party purchases occur when you buy a used car from an entity not in the business of selling cars. Private party purchases can be one of the cheapest ways to buy a used car because you do not have to pay for a dealership’s overhead or profit. When a private party sells a vehicle, the seller usually makes the most money, and the buyer gets a better deal than they would from a dealership.
There is a trade-off between the buyer and seller. There is also the paperwork from the DMV for the sales, title, registration, and other requirements. Private-party car sales are almost always as-is transactions. After handing over overpayment, the buyer has no recourse if something goes wrong with the car.
Buying From a Dealership
Franchised new-car dealers typically charge more for used cars. However, a seamless purchasing process may be worth it. As part of your contribution, you will have to contribute towards the dealer’s overhead, the salesperson’s commissions, and other administrative costs. However, the dealership will take care of the paperwork associated with the deal. This is especially useful if you purchase the car in a different state from where it will be registered or completing a complex transaction.
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6. Test Drive the Car
Taking a test drive is essential when in the market for a used car. Unfortunately, the Coronavirus pandemic has changed some of the rules. Safety is a top priority, so insist on test driving the vehicle alone. It is recommended you walk away from the seller if they refuse, or set strict ground rules about mask-wearing, allow the windows to roll down, and ask them to sit as far away as possible.
Test drives should be thorough, so driving around the block doesn’t cut it. Besides checking the car’s condition, it’s also an opportunity to see how it suits your needs and whether you would be comfortable in it long-term.
7. Have the Car Inspected
After an incredible test drive, you might feel ready to write a check and drive the car home right then and there. However, there is one more step to complete. An independent mechanic should inspect the car before purchasing, with the exception of a new vehicle from a franchised new-car dealership. In that case, you may be able to get the factory warranty covered with a relatively new certified used car.
8. Negotiate the Price
Negotiating prices is an art. The purchase of a car is nothing more than a business transaction, so don’t make the price personal. Your bargaining position will be weaker if you show emotion, negotiations based on facts, not feelings, are stronger.
It is up to you to decide what kind of negotiation strategy you want to use to get the best deal. When purchasing a vehicle through a dealer, you will have to negotiate with a specially trained salesperson. Salespersons often approach you incrementally – one step at a time – to direct you towards the deal they have in mind.
Generally, dealership salespeople will want you to focus on the monthly payment. At the same time, you should keep your attention on the car’s total cost. You have to keep in mind that they will want to package everything together as soon as you have a trade-in or need financing, and you wish to keep them as separate as possible.
9. Get the Title Changed to Your Name
Inexperienced buyers, please note, transferring the car’s registration and insurance is critical! When a claim is made, the names of the vehicle owner and the name on the insurance policy have to match to avail coverage for the damage caused in the event of an accident.
Documents proving your name change, such as birth certificates, marriage certificates, divorce decrees, or court orders, must be collected by the buyer. Your vehicle title should reflect your corrected name under “New Registered Owner,” and the statement of facts should also reflect the correction. To request the correct paperwork, contact your local DMV. Title correction fees may be waived in some states.
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How to Buy a Used Car — Is a Used Car Right for You?
If you’re looking for an affordable price and a wide selection of vehicles within your budget, buying used is an excellent decision. There is bound to be something to suit everyone’s needs among the variety of body types, configurations, and trim levels in our used inventory.
The significant advantage of buying used is the lower price, one of the most important advantages. When the cost to buy is lower, more opportunities to find a home that fits your needs. If you compare the prices of new cars with what you can afford to spend on a used car, you may discover that you can afford a higher trim level or more features. You may be able to spend your money more wisely when you purchase a used car.