Americans buy a new car about every 3 to 4 years. Cars are not showing their age as much, and more people are opting to purchase a used vehicle. Used vehicle sales hit an all-time high in recent years.
Are you in the market for a ride? Why not buy used? Here are some of the most important things to consider when buying pre owned cars.
1. Set Your Budget
Before you start shopping, you need to determine your budget. This will help you limit your search. Be sure you stay firm to your budget because you are the one paying the bills.
A used car budget will be slightly different than a new car budget. You’ll also need to save money for an inspection and small repairs.
Be sure you also include figures for the other cost of car ownership including insurance, maintenance, gasoline, and any need repairs. Do your research and see what repairs are expected, including car parts.
2. Figure Out What You Need
After you determine your budget, take time to determine what you need versus what you want. Keep a list of all features that are important to you. Determine features you can cut out to get you to your price point.
You should start researching cars that fit your description. Look at Kelley Blue Book or similar sites to get a good idea of the car’s value before you walk into a dealership. Be sure to research before you set foot into a dealership, so you know the value of the car and have an idea of its worth.
You can sort by prices, features, models, and mileage. You can buy from a private seller or a dealership. Most sites, like AutoTrader, will let you search both at the same time.
3. Get a Vehicle History Report
It’s always important to get the car’s vehicle identification number (VIN). This way you can run a vehicle history report on sites like CARFAX and AutoCheck for any accident history. If the seller is reluctant to give you the VIN, this is a major red flag.
It’s also important to check the odometer reading to see if it lines up. There are actually cases of people rolling back car odometers each year.
4. Test Drive the Car
The most important part of buying any car is driving it. You want to make sure the car drives smoothly. Try to test it in a variety of ways like up hills, around curves, and speeding up.
If anything doesn’t feel right, don’t be afraid to walk away. You also want to be comfortable while you drive this vehicle. Just because you meet with a private seller, it does not mean you have to buy the car.
5. Consider a Certified Used Car
If you are worried about repairs and maintenance costs, you may want to consider a manufacturer-certified-pre-owned car. These cars offer you lower prices and security of a manufacturer warranty. Most of the time, these are lower mileage cars that have been serviced properly.
These cars may have been leased, service loaners, or used at the dealership for employees. Before a car can be certified, auto technicians perform thorough inspections. The manufacturer will then extend warranties to offer you additional protection against larger repairs.
These programs may offer additional benefits like roadside assistance, lower interest rates, and more. These cars will be more expensive, but still less expensive than a new vehicle.
6. Securing Your Loan
If you don’t plan on writing a check for the full amount of the vehicle, you will have to secure a loan for your purchase. You should consider financing before you purchase your car because you have several options. Your financing may change your budget slightly too, so it’s better to know ahead of time.
Lenders sometimes see used car loans as higher risk, so the interest rates may be higher than new car rates. Your credit score is one of the primary factors that determines your rate. You may want to check your credit before you start applying for loans, so you can see if there are any errors affecting your rate.
There are several places you can go to secure used-car financing. Some lenders have programs for buyers with damaged credit, first-time car buyers, and current customers that have other accounts.
Places to shop for loans include:
- Large national banks that have locations throughout the country
- Credit unions that are owned by their members
- Community banks that are just regional
- Online banks
- Finance companies
- Car dealerships
National banks are secure, but may have higher rates. Credit unions may have better interest rates and tend to be less expensive for used car financing, but you may have to be a member to get a loan. Community banks are smaller than national banks and can be more personal than a national bank.
Online banks are newer to the market and can streamline the loan process. If you don’t have a lot of questions, this bank may be a good option for your to get financing quickly.
Financing companies are like banks, but the only business they do is lending money. Several auto manufacturers have their own finance companies, like Honda Financial Services and Ford Motor Credit.
7. Get the Car Inspected
You should have a car inspected by a mechanic you trust. He or she can do a visual check of the engine and let you know about any red flags. The mechanic will run basic tests to look for major defects or mechanical issues.
This can help you prevent surprises that you can’t see with your naked eye. This person is trained to find all issues and is probably familiar with common problems with this particular make and model of vehicle.
Looking for More Information on Buying Pre Owned Cars?
It’s important to do your research when you buy a car, whether it’s used or new. Buying a car is a big investment, so you should find the best car for you.
When buying pre owned cars, it’s important to set your budget, do your research, complete a test drive, and get the car inspected. You should also have your financing in order.
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