03 December 2014
How to Buy a Used Car: Be a Smart Consumer

Buying a used car can be stressful, but it doesn’t have to be. Discover how to find the right pre-owned vehicle and how to negotiate the best price, and remember, you’re in complete control. After all, you can walk off the lot and head for the next dealership, and car sellers know it.

Today, smart, prepared consumers can get more car for less.

1. Start with a realistic budget. The primary reason consumers buy used cars instead of new cars is the cost. They don’t want to spend more than they have to. If you’re paying cash, how much do you have on hand? If you plan to finance, how much can you afford to pay each month – comfortably?

2. How will the car be used? Do you take a lot of cross country trips? Or do you just need a car to run errands in town? Is this the way you get to work each day? There are plenty of reliable cars with lots of mileage left on them, but if you’re just driving around town, putting 5,000 miles a year on your car, you can spend a little less and still meet driving needs. Develop a list of possible makes and models to suit your driving needs. Then, do some research.

3. Do your research. The Internet has simplified used car shopping with online websites that list inventories of the car dealerships in your area – all in one place. Log on to used-car websites to compare prices, features, availability, special incentives – the Internet puts you in the driver’s seat. When you walk onto the lot, you’ll know what’s available from other car dealers. Know what you want, research what you want, then look for reviews of what you want.

4. Read reviews. Consumer Reports® regularly rates individual models for everything from reliability to how safe they are in an accident. Find online reviews of all the models on your short list and cross off those that don’t get reviewed positively by unbiased sources.

5. Buy from a private party or a dealer? The private sale may get you more car for the cash, but there’s no warranty. You bought the car and all the repairs that car may need. On the other hand, dealerships usually offer some kind of warranty. You’ll probably pay more because the dealership has to turn a profit, but in return, you get some kind of guarantee that the car won’t die in a day. Even a 30-day warranty gives you time to find out where that “clunk” noise is coming from. If it fits your budget and driving needs, look for a car that’s still under manufacturer’s warranty. Many car makers provide a five-year warranty on critical parts of their cars. This way you know you’re covered.

6. Never mention how much you can afford to a salesperson. Why? Because that’s what you’ll spend. When negotiating, let the dealer make the first offer. There’s usually a lot of flexibility in pricing used cars, so don’t take the first offered price. Without too much difficulty, a little push-back can save you hundreds of dollars, and maybe even get you a free set of floor mats. Also, remember, there are dozens of regional car dealers promoting their inventories online. If this deal doesn’t feel right – for any reason – be prepared to walk away. There’s always another car and another deal a few mouse clicks away.

7. Ask to see a history of any vehicle you consider. Using the vehicle identification number (VIN), you can get a history of that car online for a small fee. Ask the dealer to provide a vehicle history before you ink the sales agreement. If the car was in a tornado or a major accident, that’s something worth knowing before you buy.

8. Take a test drive. Slam the doors. Step on the gas. Check the brakes. Listen for funny noises. Even if you don’t know a fuel injector from a fuel tank, you should know what a good car sounds like. Take the car on some back roads, and take it on the local interstate. Don’t be rushed by the salesperson sitting next to you.

9. Have the car inspected by your mechanic. It’ll cost a few bucks, but should deliver some peace of mind.

10. Find the best financing. Once you’ve decided to buy, you’ll be ushered into the dealership’s F&I (Finance and Insurance) department. While many consumers like the convenience of one-stop shopping, financing is a major profit center for many dealerships. You may be able to get a better deal by talking to your bank about a car loan before you start your search. Your banker can tell you how much car you can afford to finance and what rate they are willing to offer. Then you can compare those numbers to what the dealership is offering and see which is better for you. Don’t let yourself be talked into a car loan that’s more than you can afford, or a rate that’s higher than your bank offers.

Become a smart, empowered consumer using Internet resources, due diligence, and plain old common sense to get the right car to fit your driving needs and your finances.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.


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