Americans love their cars. Believe it or not, the average car sold in the U.S. in the last few years was worth $35,000.
However, not many people can afford that. If you are looking to buy a vehicle, used cars are the most popular option, and for good reason.
However, when purchasing any vehicle, especially used, there are some important things to keep in mind before signing anything.
Luckily, we have you covered. Let’s talk about the things to know when buying a used car.
Why You Should Buy a Used Car
Of course, there are certain things you should never buy used, but a car is not one of them.
Financial advisors will typically recommend buying a used car with fewer miles on them. The reason is that a car’s value depreciates the most in the first two years.
Buying a car that is between 1 and 3 is years old is the best use of your money, because the price will have dropped significantly, but the value will not be significantly damaged in that amount of time.
7 Things To Know When Buying A Used Car
Whether you are looking to buy or lease a vehicle, there are a few things to know before you shop. If you are looking to lease, find your dream car with the cheapest lease deal.
Some places can be tricky, and some good salesmen might convince you to buy on impulse. Here are 7 tips to keep in mind before entering any dealership.
1. How Much Can You Afford
Think very carefully about this. Even if you can afford a solid down payment, think about any monthly payment you can make.
If you are scraping together rent money at the end of the month and have little wiggle room, be very careful about adding an extra $300 to your monthly expenses, without even factoring in car insurance.
2. Think About Other Expenses
The value of your car is a direct link to the amount of insurance and excise taxes you will pay. Also, beware of gas guzzlers.
Not only that, but maintenance costs are certainly not equal among cars. Parts for foreign cars can be much more expensive than vehicles made in the U.S.
While Toyotas and Hondas are technically foreign cars, they have plenty of factories in the U.S. and they are some of the most commonly used vehicles in the country.
Also, consider the longevity of the vehicle. If you take out a 5-year loan for the car, are you reasonably certain that the car will last that long? If you buy a vehicle with 50,000 miles on it, and you average 10,000 miles a year, then a 5-year loan may be a smart idea.
However, if the car has 100,000 miles on it and you drive 30,000 miles a year, it may not be wise to purchase the vehicle. Just be sure to factor in all of the various expenses associated with the car.
3. Know The Dealership
Most people don’t even go to restaurants these days without checking their online reviews. This, however, is a long-term commitment. Be sure to do your research.
Make sure you are not getting scammed. This dealership in Washington will buy your old car for 110% of the Kelley Blue Book (KBB) trade value!
4. Check Prices
Make sure that you look online for the estimated value of any vehicle you are purchasing or trading in. Again, this is a commitment, so be very diligent in your research so you don’t regret it later.
5. Check the Vehicle History
This is an important step. This will tell you if the odometer was rolled back, or if the car has been in any accidents and a lot more you might need to know before making any purchases.
Autocheck and CarFax are the two best-known and most commonly used reports. Make sure you ask to see them.
6. Always Test Drive and Inspect
This one should go without saying, but seriously. Don’t ever buy a car without driving it first. You may hear a concerning noise in the engine or notice something that could cause an issue later.
Check every little detail of the vehicle before making a purchase. Look for dents, scratches, or damage to the exterior. However, there are more important things to look for.
Check the windows and doors to make sure they work correctly, make sure that you are comfortable driving the vehicle and check under the hood for any obvious concerns.
If you have a mechanic that you trust, have them inspect the vehicle before purchasing. If the inspection is expensive, only have them inspect “the one”.
7. Learn to Negotiate
Don’t be outlandish, but also don’t be too easy. Remember, this is a long-term purchase, and you are the customer. You do not owe the dealer anything.
If you see something concerning on the vehicle, tell them that you will not purchase it without it being fixed. If they can’t fix it, ask for a price drop.
If you know the Kelley Blue Book value and the vehicle history, offer a number that is a couple of hundred dollars lower than what you believe is a fair price. If you can negotiate it down to that fair number, then you are golden.
If $200 doesn’t seem like much to you, consider this. If you wanted to buy a candy bar and one store down the street sells it for $2, while the one you are at sells it for $202, you would go down the street. $200 is still the same amount in this case.
Now that you have all the things to know when buying a used car, make sure you follow through on them and stay informed long before you make any purchase.
If this is your first time buying a car, don’t be nervous. Just follow these guidelines and make an informed decision.
One last tip after purchasing a used vehicle is to always have a little extra money in your checking account in case of any unexpected repairs. Check out some stress-free money saving tips to get started on that today!