Used cars can represent a great deal. For one thing, new cars lose up to 30% of their value in the first year alone, and up to 60% by the end of five years.
But all you will miss when you buy that same car used is the new car smell. It still has a ton of life left in it, but at a much more reasonable price.
However, demand for used cars has skyrocketed this year due to lack of new cars on dealer lots. That means you probably won’t get the lowest price ever if you need to buy a used car soon, but there are still some things to know that can get you the best possible deal.
Stick with us to get prepared for that exciting day when you snag the keys to your fantastic, new-to-you ride.
Know Your Budget
Before you do anything else, crunch the numbers and decide how much you can spend on your new vehicle. Dealers will use all kinds of tricks to get you to spend more, and it’s too easy for them if you don’t know how much you can reasonably afford.
A good general rule is that your monthly payment should not exceed 20% of your take-home pay. But don’t overlook the total cost of the vehicle, because spreading the payments out for too long means you could end up paying for that car even after it dies.
Remember, too, that used cars have greater maintenance needs than new ones, so you’ll need to budget for tune-ups and repairs. Other costs of ownership should be factored in as well, such as new tires, oil changes, fuel, and insurance.
Know Your Needs
The last thing you want to do is show up at the dealership without a definite short list of vehicles in hand. Lots of cars look exciting, but you need one that is both aesthetically pleasing and reliably functional for the kind of driving you generally do.
Because stock will be limited, it’s all the more important to do your research early and pinpoint dealers that have the kind of car you want. Early preparation in this type of market makes it less likely that you’ll have to settle for something that doesn’t quite fit the bill.
Look online for honest and unbiased reviews of vehicles.
Know Your Due
In the world of used car sales, every deal is different. While the dealership may be offering certain incentives or discounts, your salesperson might not tell you this outright. So before you show up to buy a used vehicle, take some time to learn everything you can about the dealership itself.
It’s also good to familiarize yourself with the terms and conditions that often surround a used car purchase. For example, if you choose a car that’s under five years old, it could still be covered by the manufacturer as well as the seller. To take advantage of this, ask for a CPO vehicle – one that is certified pre-owned. This is a distinct category within used car sales.
Know the Market
Many factors go into how much you will pay for your car. Right now it is a seller’s market because there is more demand for the products than there is supply. But the reputation of the particular make and model also matters.
If you’re going for one that is known to stay reliable for a long time, it will probably cost more. On the flip side, you should also be able to recognize if a car is priced too high for its expected lifespan.
There are so many different ways to source a used vehicle these days, from traditional dealerships to private sellers and newer online-only sales platforms. Take a look at them all to be satisfied that you’re getting the best price.
Private sellers almost always charge the least, but you also don’t get much in the way of protection against deceptive sales tactics. If you go this route, budget a couple hundred dollars to have a mechanic check out the car before you buy.
Know the Car
Obviously the test drive is an important element in the car-buying process. Here is where you compare everything you know about the type of car to the reality of the actual car you’re driving. Based on its history prior to being listed for sale, even the most reputable car brand can become a lemon.
Take as much time as you need during the test drive to get a sense of the handling. Later, note the condition of interior and exterior surfaces. Things like dings in the body, cracks in the windshield, rips in the upholstery, or sticky controls can be valuable bargaining chips for you when it comes time to talk price.
Another vital step is to pull the vehicle history report. Sites like AutoCheck can let you know if this particular car has a salvage title (meaning that it has been declared a total loss by an insurance company) or if the odometer has been rolled back. Typically you can also see how many previous owners there have been.
Armed with this information, you will be ready to make a great deal on your new used car, despite the current seller’s market. While dealers may have a strong hand to play right now, so do you. They need to keep making sales to close out their year strong. Remember that any old car can usually get you from point A to point B, but a truly smart buy will bring joy to the family for years.