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What to Look for When Buying a Used Car

Used Car Buying GuideThere are a few important factors to consider when buying a car. Should you get a new or used car? How do you avoid being pushed around by car salesmen? Should you buy an extended warranty? This car buying guide answers each of these questions and more to help you get the best deal.

Why Buying a Used Car Is the Way to Go

Buying a used car is always considerably cheaper than buying the same year, make, and model new. And just because you’re choosing to buy a used car doesn’t mean you have to buy an old car. Cars made just two or three years ago are often on the market for a very reasonable price. Buying a used car can be a smart financial choice, but it does require you to do more research and be more prepared.

The First Steps

Before you even start looking at cars, it’s best to figure out exactly how much you can afford to spend on a car. Money Under 30 suggests the following guidelines when deciding how much to spend:

  • General Rule of Thumb: 35% of your yearly income. If your yearly income is $50,000, then you’d be looking at spending about $17,500 on a car.
  • For the Penny Pincher: 10% of your yearly income. For the same income of $50,000, you’d be spending $5,000 on your car.
  • Happy Medium: 20% of your yearly income. This would mean spending about $10,000 on a car if you earn 50k.

Unless you’re planning on paying with cash, it’s also helpful to research auto loans to get an idea for what you qualify for. Check your credit score and use online resources to get a ballpark idea of what your loan options are.

What to Look for When Buying a Car and How to Look for It

Once you dive into the ocean of used car listings and dealerships, get familiar with the following used car buying tips:

  • History This is the hitch when it comes to used cars: you don’t know what the car’s been through up to this point. But that doesn’t have to be true. There are quite a few ways that you can check up on the car’s history.
    1. Make sure it has a clean title. This tells you that the car hasn’t been in an accident before. Plus, having a car with a clean title can help in your search for cheap car insurance.
    2. Search for a vehicle history report using the car’s VIN number.
    3. Read the buyer’s guide. This guide is usually a sticker or tag that comes on used cars. It will give you general information about the car’s history.
  • MileageThe general rule says that you should stick to buying used cars with less than 100,000 miles. There’s nothing inherently wrong with that rule. But there are a few other factors to consider. For instance, miles driven on the freeway cause more wear and tear than miles driven on local roads. So if you’re buying from the owner, you might consider a higher mileage car if it was hardly ever driven on the highway or freeway. You should also be cautious of older cars with very low mileage. A car that has sat unused for a long time comes with its own issues.
  • ReliabilityResearch to learn which makes and models are the most reliable.
  • Check for DefectsWhen you look at the car check for damage on the outside. Most dents and scratches aren’t a large concern. If you want to bargain, you can bring up what you find to the seller. But you should also keep an eye out for bigger issues, like rust or chipped glass.
  • Go on a Test DriveA test drive is always a good idea. While you’re in the car check the lights, buttons, radio, air, heat, etc. You’ll also want to check for any odd sounds or other driving defects.
  • Consider a CPO VehicleCertified pre-owned vehicles come with more quality assurance. A certifier (sometimes the manufacturer) has to inspect the car and perform any necessary repairs before certifying it. CPOs can also come with benefits like an included extended warranty.
  • Your InsuranceCheck your current insurance policy and how your payments could change depending on the type of car that you buy. For instance, certain luxury cars have a much higher insurance cost. You could also use comparison quote tools, like ours at Cheap Car Insurance, to find out which insurance can give you the best price for the car that you want.

Getting the Right Price

Out of all the advice we give in this car buying guide, this is probably what you care about the most. For one, make sure to compare prices. Check for other used cars of the same year, make, and model from other sellers. You can do research online, compare between dealerships, and check the prices for people selling their own cars.

You also want to make sure that you brush up on all of the tips in this guide before going to buy. If you go in unprepared, car salesmen could take advantage of your ignorance. And even if you do go in prepared, try to leave the dealership without negotiating. Take a night to think it over, and then negotiate over the phone or email. This will keep you from feeling too much pressure from the dealership or situation.

You can also time your purchase to get a good deal. The best time to buy a used car can depend on the make and model. For instance, four wheel drive vehicles are priced highest in the cold season, so you’d want to avoid that time of year. Aside from that, keep an eye out for dealerships that have good deals during holidays.

How to Pay

You have a few different options when it comes to paying for your used car. Since they aren’t as expensive as new cars, it’s more feasible to pay everything up front. You can also go to your bank and take out an auto loan. Or, you can finance the car through the dealership.

While it can take more preparation and feel like a sacrifice, paying with cash is often the best option. However, this isn’t always possible, and in some cases it can be smarter to finance or take out a loan. If you do enough research you can usually find a decently low interest rate on an auto loan.

Should You Pay for an Inspection?

Yes, you should. Even if the seller or dealership has already had an inspection done, it’s worth getting an inspection of your own. They usually cost a little over $100 and will help you catch any issues that would be much more pricey if you hadn’t caught them. It can be a red flag if the seller doesn’t let you get an inspection. Consider a different option if that happens.

When you get the inspection, ask for a written report. This will give you proof of anything the mechanic finds. The inspection is useful because it can prevent you from buying a car with big problems. But it also can help you get a better deal on your car. Sometimes the mechanic will catch issues that are easily fixed, but will still come at a cost. You can use those repairs to bargain with the original price.

Should You Pay for a Warranty?

Warranties can be a difficult choice. You’re already paying a lot for a car and it can be difficult to dish out more money. Warranties can be a smart choice, but it does depend on your personal circumstances, the car, and the warranty.

  1. First of all, consider if you can afford the large payout if something does go wrong with the car. If you would probably be able to afford the bill, it might be best to stay away from a warranty. It’s speculated that unless you have a notoriously unreliable vehicle, the warranty isn’t worth it.
  2. That being said, if you have to buy an inexpensive, less-reliable car, a warranty could be smart.
  3. The kind of warranty changes things as well. Third-party warranties are usually less trustworthy than manufacturers’ warranties.

Conclusion

Hopefully you feel more prepared for buying a used car. Now you can focus on the excitement that comes with picking out a car. Glance over this used car checklist one more time before you head into the dealership and you’ll feel confident picking out your new (for you) car.