10 Used Car Buying Tips
When you buy a used car, you'll choose a vehicle offered by a dealer or buy from a private-party seller. In either case, following these 10 used-car buying tips can help to ensure that you get a great car at a great price.
- Know What You Need. In life, there are things we want and there are things we need. When buying a car, it is important to be sure that needs are addressed first--seating, cargo volume, fuel economy, safety--before wants are accommodated. Choosing a vehicle that meets your needs will make you happier with your selection.
- Know What You Can Afford. Once you know what you need, it is time to determine what you can afford. If you're paying cash, this part is easy. If you're getting a loan, you'll need to use a financing calculator to determine the right mix of down payment, interest rate and monthly payment to fit your budget. Also, don't forget to consider maintenance and insurance costs. Some models are less expensive to maintain and insure than others.
- Arrange Financing in Advance. If you are getting a loan to pay for the used vehicle, arrange for your financing in advance. That way, a dealer must beat your established interest rate to earn origination of the loan. If you're buying from a private party, having the loan approved and the funds ready makes the transaction go smoother.
- Choose a Model Known to be Reliable. Now it's time to pick a car that meets your needs and budget. You'll want to focus on models that are known to be reliable as a hedge against making costly repairs in the future.
- Research Values. Once you've settled on a vehicle, it's time to research used car values for that particular vehicle. Consult multiple sources and average the data to find the most accurate numbers for trade-in, private party and retail values.
- Consider CPO. Buying a certified pre-owned (CPO) vehicle from a dealer costs more, but also brings greater peace of mind because the dealer performs rigorous inspections, replaces worn items, reconditions the car, ensures a clean vehicle history report, and offers a limited-time warranty. Buying a CPO model is as close to purchasing new as it gets, without actually getting a new car.
- Perform a VIN Check or Obtain a Vehicle History Report. When buying from a private party, be sure to obtain a Vehicle Identification Number (VIN) report, also known as a VIN check or vehicle history report. Companies that perform these services can help used-car buyers to spot potential problems before the transaction.
- Have a Mechanic Inspect the Vehicle. Unless you're buying CPO, it is wise to have an independent mechanic inspect any used vehicle you're seriously considering for purchase. A mechanic can identify signs of previous damage, note items that need repair, and provide a service estimate that can be used to help lower the price of the vehicle.
- Payment. When paying for a used vehicle, you will do so at the dealership selling the car, at your bank when buying from a local private party, or through an Escrow.com online escrow account in any case when the transaction cannot be handled in person.
- Consult the DMV for Transfer of Ownership Requirements. When buying a used vehicle, your state's deparment of motor vehicles (DMV) has certain requirements of both the seller and the buyer. It is important to review those requirements and be prepared to fulfill them at the time of payment and ownership transfer.