Perhaps your trusty old car has become a lot less trusty over the years. So much so that it makes more sense to replace it than to repair it for the zillionth time. If you’re reading this article, it’s safe to assume that you’ve already settled the all-important question of whether you should buy new or used.
Buying a used car is a great idea. You get a quality vehicle for a much more affordable price tag, and you let someone else take the steep depreciation rate from the first year. Having said that, this option does have some significant disadvantages.
For one, it’s harder to figure out if the car is worth what you’re paying. Of course, you expect a bit of wear and tear, but how can you know for sure that the seller is telling you the truth and how diligent they were about proper maintenance? You literally have to roll up your sleeves and look under the hood.
Right off the bat, we’ll give you two pieces of advice to keep you from getting swindled. Number one is to never allow your emotions to decide what car you should buy. This can mean that you need to take some time to think it over, which brings us to number two: don’t let the vendor pressure you into making a purchase.
More often than not, this is a red flag. They know that if they give you some time to process, you might realize that this is a bad deal. If it seems too good to be true, it probably is. The good news is that there’s no shortage of used cars on the market, so you can afford to walk away. Chances are you’ll find something better in no time at all.
Budget & Financing
Obviously, before you start shopping for cars, you need to know how much you can afford. If you go to a car dealership and say you’re interested in buying a used car, you can be sure that they’ll offer you some financing options but wouldn’t it be better to look for car loans by yourself beforehand? This way, you’ll know if you’re getting a good deal in terms of interest rates. Most often, the rates offered by the dealer are marked up from the lender’s rates so they can make some extra money.
Also, when you start looking for loans, don’t get too fixated on the monthly payment. You need to look at the big picture and do the math. The monthly rate may make it seem like a great deal, but if it means you’ll have to extend the loan term by another couple of years, you’ll end up paying a lot more on compounding interest.
And one last thing about financing you should keep in mind. Interest rates for used cars are typically higher than for new cars. That’s to protect the lender in case you default on your loan since they would get a better resale value on a new car.
Dealership vs Private Seller
Another common pitfall of buying a used car is automatically assuming that buying from a private seller is better. This mostly stems from unflattering stereotypes about fast-talking used car salesmen. Granted, some of them fit the profile to a T, but that doesn’t mean it’s most of them. Plus, if you have problems with your car after purchase, it will be a lot easier to get in touch with the dealership than with a private seller.
Moreover, you should know that a lot of highly entrepreneurial freelance dealers sell used cars through ads while pretending to be private sellers since they know that you’re more likely to trust them. They buy their used cars at auctions, fix a few things to make them look more presentable, take pictures and upload them on different websites.
A good way to tell them apart from genuine private sellers is to call and ask about “the car for sale” without going into specifics. If they need more details such as the make, model, and year, then they’re obviously selling several, so there’s a good chance you’re speaking to a freelance dealer. Either way, our advice is to approach all sellers like their dealers. Remember what we said: don’t let your emotions decide for you.
Research & Inspection
Getting a good deal on a used car takes a bit of research. You’ll want to take the car’s VIN (Vehicle Identification Number) and use a VIN decoder like the one from the NHTSA to see if there are any recalls. You’ll also want to check the car’s history to see if there are any previous accidents or title issues.
And of course, you’ll need to physically inspect the car. Even if you’re not an experienced mechanic, there are some things you can check. This is not to say that you don’t need to take the car to a qualified mechanic before making a purchase. You absolutely should. But this will help you rule out the cars that aren’t worth the hassle.
You can begin by checking for rust, scratches, and dents on the exterior of the car. Pay special attention to body panels that look uneven or areas where the color hues don’t match. These are signs that the car may have been in an accident and subsequently repaired.
The condition of the interior can provide you with a clear indication of whether the mileage is real. For instance, if the car is supposed to have a mileage of under 20,000, its interior should be in very good condition and look almost new. Check the upholstery, steering wheel, seat bases, and side bolsters. And while you’re at it, check the central locking, ventilation system, and lights as well. You should also take note of how the interior of the car smells because a musty smell could stem from leaks and water damage.
Then you can move on to checking under the hood since often that’s where you’ll find out why the seller is so eager to give you a great price. The engine area should be relatively clean. You can take off the oil-fill cap and look at the underside. Gunk can mean that the previous owner didn’t pay that much attention to maintenance. You can download a checklist on the internet, and there are also a lot of video tutorials showing you how to do a basic inspection, but, once again, unless you are a mechanic, you should always have a professional look at it before purchasing.