Used car prices are up tremendously as demand outstrips supply. The days of purchasing a low-cost used car are over, hence consumers need to shop wisely when acquiring a used car.
As expensive as used car prices are these days, they are still far less expensive than buying new ones. We have prepared seven steps to undertake when buying your next used car.
Step No. 1 – Research the Reliability Ratings
How will you know if a used car will stand the test of time? All matters considered, you will not. But you can find a solid idea based on a particular make/model’s reliability ratings. These kinds of ratings survey current owners, keep track of recalls, and consider longevity based on various factors.
You will find new and used car reviews are scattered throughout the Internet. Auto Trends offers them, but if you are looking for a comprehensive report, only Consumer Reports will do. We recommend the annual auto issue published every April to help you gauge vehicles. CR creates a comprehensive 17-point plan for each model with an eye on potential trouble. Then, make an informed decision on the type of vehicle you choose as you progress through the next six steps.
Step No. 2 – Find Current Vehicle Values
With vehicle prices sharply higher due to supply issues, expect to pay more than what you think a vehicle is worth by finding the current value.
There are three sites that we believe offer the best information. They are Kelley Blue Book, AutoGuides.com, and Edmunds. When using these sites, look for the market value. Then, input such details as the make, model, trim, and model year of a particular vehicle. Put in other specifics such as special features and packages. Finally, enter the vehicle’s condition and mileage.
With all the details in place, you will receive market values from all three. The prices should be similar, but there may be some differences. You can go with one source or all three by simply totaling the sums and dividing by three. That is the price you should pay for the vehicle you are examining.
Step No. 3 – Arrange Your Financing
The more cash you can bring to the table when purchasing a vehicle, the ideal this is for the consumer. After all, making monthly payments only delays full ownership of the vehicle. You will not receive the title until your loan is satisfied.
That said, the reality is that most people will finance their new or used vehicle purchases. We recommend shopping with your financial institution first, preferably a credit union. Why a credit union? Since you will generally find a lower-rate financing offer with this type of financial institution. Shop around, compare rates, and receive loan approval before you make your purchase. Having your loan in place ahead of time will give you leverage when you negotiate.
Step No. 4 – Shop Online, Then In-Person
The Internet has been a boondoggle for consumers. Yes, there are plenty of scams out there, but reputable businesses dominate. One of the best attributes of online searching is doing it without the pressure of a car salesperson looking over your shoulder or attempting to upsell you.
Besides visiting individual used and new car dealer websites, there are places to go to turn up local deals. The Facebook marketplace is one option, as are Craigslist ads. You can also visit sites such as TrueCar, Edmunds, AutoTrader, CarGurus, and VinSolutions to find your next ride.
Only check out a vehicle in person once you complete the next step. Following that, if the vehicle is sufficient, arrange an appointment with the seller and a test drive.
Step No. 5 – Obtain the Vehicle History Report
Has the vehicle you are interested been in an accident? If the owner says so, then that’s one way to find out. Another way is to obtain a vehicle history report for that vehicle by entering its specific 17-alphanumeric number. Known as a Vehicle Identification Number, the VIN can reveal much about a specific vehicle.
You have some choices when it comes to history reports, with CARFAX the market leader. Other companies offering reports include BeenVerified.com, VinCheckup.com, and AutoCheck.com. You will pay a fee for this service, but the reports should prove invaluable as you accomplish your research.
Step No. 6 – Arrange a Mechanic’s Review
If you plan to keep your used vehicle for several years, it is always a smart idea to have it checked out by a mechanic first. Yes, you will pay a fee for this service, but a reputable mechanic will give you a report covering the vehicle’s condition and potential problems.
This step is invaluable, especially if a major component such as transmission may need replacing. If it does, expect to pay thousands of dollars in repairs or avoid the cost completely by walking away from the deal. Either way, you’ll pay at least $100 for the service while coming away with the information you need to know.
Step No. 7 – Let’s Make a Deal
If everything checks out regarding a used vehicle, you are ready to negotiate. You already have its market price in mind, so use it as the basis for what you will pay for the vehicle. Start your negotiation by telling the buyer you have a loan in hand. That is knowledge worth sharing as it signals to the buyer that you have the funds available.
Use the vehicle history report and the mechanic’s report to negotiate from strength. Share the reports with the seller if they will not budge on the price. Offer about 10 percent below the posted price or lower if the car is above the market value. Again, use your research to show the seller what the vehicle valuation site identifies as the market value.
Only when you are satisfied with the price, finalize the deal. Keep in mind that the vehicle is not officially yours until the loan is paid off. Also, if there is a lien on the vehicle, work with the seller to have the funds paid off before finalizing your purchase.
Used Vehicle Sale
Congratulations on your purchase! More than 40 million used vehicles change hands in the U.S. every year. That’s approximately 2.5 times the number of new vehicles purchased annually. Thus, you are in great company when shopping for a vehicle.
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