Tips for Buying a Used Car. Buying a used car can be a tricky process to navigate because no two used cars are the same. Each car has it’s unique history which can either work in your favor or become your biggest nightmare. In addition to the steps required to get a good deal on a new car, when buying a used vehicle there are additional steps you must be aware of.
One of the most important steps is to make sure to run a used car history report in addition to having a certified mechanic inspect the car on a lift. Why should you spend your hard earned money on a mechanic? It’s better to pay for a mechanic now than spend thousands on repairs later.
You need to be very careful when buying a used car. You can easily end up with a lemon or rebuilt car. When you see a horrific wreck on the highway you probably don’t realize that many of those cars end up repaired, rebuilt and sold on the used car market.
There are positives to buying used. Most importantly you will get more value for your dollar since somebody else took the huge hit on the initial depreciation. This hit is the largest source of lost money when buying a car. By following our Tips for Buying a Used Car, you will learn how to avoid the common scams and pitfalls.
Plan Your Budget
Figuring out how much you are willing to spend on a used car is the first thing you need to do, and for good reason. First of all, buying a used car opens the door to other expenses such as licensing fees, insurance, and taxes. As a rule of thumb, you should not spend more than 20 percent of your salary on a used car, especially if you have other financial responsibilities and bills to pay.
You also need to decide between taking out a loan to pay for the car or paying in cash. Some people go for the first option in order to purchase a more luxurious model, others take out a loan so they won’t have to dig into their savings.
Keep in mind that a used car is probably going to require maintenance and a change of tires, unlike a brand new vehicle, so be prepared to set some money aside for any hidden costs you may encounter down the road.
Choose The Right Car
Now the fun begins — picking your car. Take some time to think about how you plan to use this car. For example, if you have a family, you’ll want enough room for everyone plus ample cargo space. If safety is a top priority, check out the Insurance Institute for Highway Safety for crash tests.
Narrow the field by making a list of must-have features. Then, search for models with those features using tools such as Car Finder on Edmunds.com. As you move forward, build a list of three target car models to research in more detail.
- Take your time and carefully examine everything you want to look at – not just what the seller shows you.
- Inspect the car on a dry sunny day if possible – it’s easier to see the visual clues to the car’s real condition.
- The older and cheaper the car, the more likely there will be something wrong, particularly once it’s done more than 100,000km. Be especially wary of engine wear and rust.
- Know what you can fix and the cost of having the work done.
Get a professional inspection
Always insist on having a full professional inspection before buying any used car. Most garages will perform these inspections. There are also specialist pre-purchase inspection services. After the inspection both you and the seller will receive a report detailing any repairs needed.
Build a Target List of Used Cars
It’s no secret that the Honda Accord and Toyota Camry make for good used cars. But they might cost a few thousand more than a comparable Ford Fusion or Kia Optima, even though these are good cars, too. So if you’re looking to save money, consider more than one brand. We suggest making a list of three cars that meet your needs and fall within your budget. Edmunds reviews have great information to guide your choices.
If you’re planning to buy a vehicle that is less than 5 years old, consider one that’s certified pre-owned(CPO). CPO vehicles have long-term warranties that are backed by the carmakers, not just the dealership selling it to you. Franchised dealerships that sell that same brand new are the only ones who can sell a CPO car of the same brand. So if you wanted a CPO Chevy Cruze, for example, you’d need to buy it from a Chevy dealer.
Check the Vehicle History Report
Unless you’re buying the car from a close friend or family member who can vouch for its history, plan to get a vehicle history report. This is an essential early step. If the car you’re looking at has a bad history report, the sooner you know the better.
AutoCheck and Carfax are the two best-known sources for vehicle history reports, which can reveal vital information about the car, including whether the odometer has been rolled back or if it has a salvage title, which means it has been declared a total loss by the insurance company. You’ll use the car’s vehicle identification number (VIN) to get this information, and in some cases, all you need is the license plate number.
Meeting with the seller
This is the point in the process when safety is most important. To make the used car buying process safer and more secure, arrange to meet with the seller in a public place, in daylight hours. With the increased popularity of online sales, it’s become common for buyers and sellers to meet in police station or fire hall parking lots.
Do they have to be in the car with you? Will they allow you to test drive the vehicle on your own if you leave a piece of ID as collateral? These are all decisions that you’ll have to make in partnership with the seller.Contact your local police station to see if they allow/encourage this, and if not, ask if they recommend any alternative meeting places. Speak with the seller ahead of time about how you plan to test drive the vehicle.
Negotiating Like a Pro
Out of all the steps to buying a used car, the one-on-one negotiation is the most daunting! You need to use all of the available information to your advantage to drive the price down. Before you begin negotiating, invest the time to do all of the research we recommend. Since there is so much to learn about negotiating, we have written a full page of advice for you.
Closing the Deal
Now that your price negotiating is complete, it is time finalize the transaction. You should never pay cash because if something goes wrong you may have trouble getting your money back. Besides, carrying around large sums of cash is dangerous. You should pay with a credit card if possible or a check of some type (personal, official check, etc.). With a credit card or check you have a paper trail and some recourse available if something goes wrong.
One of the trickiest things to deal with when finalizing the purchase of a used car is when the seller still owes money on it. This should only occur when you are buying from a private party. The lender is holding the title and you must make arrangements with them to have the note paid off and the title transferred to you.
Finalizing the sale
The rules and regulations around finalizing a private used car sale are different in every province, but each will involve a face-to-face meeting with the seller and the exchange of money. Use common sense around what kind of payment to accept, and never hand over payment without confirming the ownership transfer is legitimate.
In most cases, you and the seller will meet at a government office to transfer the vehicle’s ownership. If a seller tries to convince you to meet in the parking lot and exchange documentation ahead of time, don’t do it! Do all your signing in the government office.