Used Car Buying Guide: What You Need to Know

    Nearly everyone will need to buy a car at some point in their lives. Most car buyers will not have the ability to buy a brand new car, and so there’s a thriving used car market. However, it can be intimidating to buy a used car. There are a number of different factors that buyers need to keep track of. That’s why we’ve put together this helpful guide to help you get the best deal on a used car.

    The Best Place to Buy Used Cars

    One of the first issues that any used car buyer needs to resolve is where to get a used car. There are two primary options for consumers: buying a used car from a dealer, or buy from a private seller. Each of these choices has its own pros and cons.

    Buying a Used Car from a Dealer

    Buying a Used Car

    Dealers are the most common choice for used car sales. A dealer is a company that sells cars as its primary business. Many dealers get used cars as a trade in when someone buys a car from them. As a result, dealers usually have a wide selection of used cars.

     Greater protection under the law

     Greater opportunity for warranties

     Car is more likely to have routine maintenance done

     Car is more likely to have been inspected

     More financing options

     Ability to trade in old car toward cost of your new used car

     Customer support

     Established trust and credibility

     Dealer handles title transfer and other bureaucratic processes

     More likely to have vehicle history

    As you can see, buying from a dealer gives you all of the benefits that you get from using any professional business. The dealership has a closer scrutiny from regulators, and thus has to meet higher standards for the cars they sell than private sellers do. However, there can also be some drawbacks, namely:

     More expensive

     May not be as motivated as private seller

     More paperwork

     Less ability to haggle or negotiate

     Less personal

     May not have the type of car you’re looking for

    Dealers are not as flexible as private buyers, and so the disadvantages of using a dealership all center around that lack of flexibility. Furthermore, the things that make a dealership attractive, such as tighter regulation, also have their own tradeoffs, like more paperwork.

    Buying a Used Car from a Private Seller

    Buying a Used Car

    Dealerships aren’t the only place to go for used cars. Many private individuals are also looking to sell their car directly. Private sales can be more attractive to some customers, and less attractive to others depending on their needs. There are a number of benefits to purchasing a used car from a private seller.

     Greater variety

     Easier to negotiate or haggle

     Prices are usually lower

     Less paperwork

     More payment options

    Private sellers don’t have the overhead or organization that dealerships do, which can work to the customer’s advantage. Moreover, because buying from a private seller is a private transaction, customers can pay through any method the seller agrees. This means customers could pay with Paypal, bitcoin, or even trade labor for the car. No matter how flexible a dealership is, it is very unlikely they will let you work off the cost of your used car.

    Private sellers do have their fair share of disadvantages though, including:

     Less oversight

     Less legal protection

     Potentially unsafe

     No warranty

     No recourse through business organizations like the Better Business Bureau

     Harder to verify car condition

     Can’t trade in toward payment

     Harder to get vehicle information

    Private used car sellers don’t have the same protections that dealerships have. As a result, there are fewer options for buyers to redress issues. Moreover, buying a used car from a private individual can be unsafe, especially if the transaction involves a large amount of cash.

    As you can see, private used car sellers and used car dealerships each have their own benefits and disadvantages. Buyers should carefully weigh these and determine the best used car source for them based on their needs and priorities. A buyer that needs a car quickly and is confident about their ability to evaluate the car’s condition, may prefer a private used car seller. However, buyers that lack mechanical know-how or want more protections may prefer a dealership.

    Things to Check When Buying a Used Car

    As with any purchase, it is important to make sure you are getting the best value when you are buying a used car. After all, no one wants to wind up with a lemon! However, cars are more complicated than many purchases that we make. In fact, it has been argued that a car is the second most complex purchase most people will make, next only to a house. There are a few things that a buyer can look into in order to determine if the car they are considering is worth the price being asked for it.

    Vehicle History

    One of the first things that any savvy used car buy should consider is the vehicle’s history. Cars that have been in accidents are more likely to have underlying issues that haven’t been detected yet. Additionally, cars that have had major repair work or major components replaced are also more likely to run into problems down the road. Understanding what, if any, accidents a car has been in, and the extent of the damages, is a good indication for what you can expect from the car.

    Another indicator of the car is the ownership history. Cars with more owners are more likely to encounter problems, as people are more likely to trade in or sell their car when they feel a major repair bill coming up. Cars with fewer previous owners are more likely to be taken care of and well maintained, decreasing the risk that they’ll need major repair work.

    Vehicle Condition

    Another important factor to consider when buying a used car is the condition of the vehicle. Buyers do not need to be certified mechanics to spot many problems. For example, what is the condition of the interior? Is it clean and well cared for? Full of rips, tears, and stains? Are there handles, buttons, or levers broken? Not only will these observations give you a better idea of the value of the car, but they will also provide insight into the car itself. A used car with a ripped and stained interior is less likely to have been maintained mechanically, and thus should be a red flag.

    Another thing that buyers can evaluate is the bodywork. You should be sure to check the condition of the paint, looking for dents, breaks, and scratches. Buyers can also look for signs of rust. If a car was kept in an environment that allowed rust to form in one place, than it can form in other places as well. Buyers should be especially aware of rush when buying cars from locations that get regular snowfall. The grit and salt used to keep roads safe from snow and ice can also play havoc with bodywork and mechanics.

    Finally, buyers should do a visual inspection of the engine. Once again, one need not be a mechanic to make basic observations. Buyers should check for rust spots, leaks, and general condition. They should look at the belts to see how worn down they are and to check that they are properly aligned. Engines that have rust spots, leaks, or worn belts are more likely to need service in the future.

    Once users have checked the interior, bodywork, and engine of a used car and found them suitable, the next step is to take the car for a test drive.

    Test Drive Checklist

    It is important to give the car a full evaluation before buying it, and a test drive is a great way to get an understanding not only for the condition of the car, but to determine if it is enjoyable to drive and will meet the buyer’s needs. When you’re on a test drive make sure to do/check for these things:

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    Turning Radius

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    Visibility in front of, behind, and through
    mirrors of the car

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    Left Turn

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    Unusual smells

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    Right Turn

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    Steering responsiveness

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    Freeway acceleration

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    Heater/AC

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    Stopping time/distance

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    Radio/CD/SAT/Audio Input + speakers

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    Noise from loose or missing seals

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    Horn

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    Engine noise – it should be regular and even. Sounds that are out of rhythm or seem out of place are a red flag

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    Comfort

    Following this checklist will give you a good idea of the state of your car. Most dealerships and private sellers will also allow you to take the car to a third-party mechanic so that you can get an unbiased opinion about the car’s mechanical health, and what, if any, major repairs will be needed soon.

    Paying for a Used Car

    Once you’ve found a car that suits your needs and have ensured it is structurally and mechanically sound, it is time to pay for your car. While you can buy a car outright with cash, a check, cashier’s check, money order, or other method, most people will need financing. Getting a loan for a used car is a bit of a mysterious process, so here’s some things you should know:

    The Loan

    Used car loans most often come from banks, though some dealerships will also offer financing. Most banks will allow you to pre-qualify before you start shopping for a used car. This will give you a better idea of how much of a loan you can get, so you can narrow your price range ahead of time.

    Interest rates for used car loans are usually lower the newer the car is. This makes sense, as the newer the car the more value the bank can get for it should you default, therefore newer cars are a lower risk to bank. Your interest rate will be based on your credit score, and your monthly payments will be determined by the total cost of your loan. One of the best way to get your monthly payments lower is with a down payment.

    used auto loan

    The Down Payment

    A down payment is how much money you pay toward the car upfront. Part of your down payment can include the value of any trade in should you use a dealership. Down payments lower the overall amount of money you will need to borrow for the car, and so make your monthly payments lower. Depending on the interest rate you are offered, it may be better to make as large of a down payment as possible to reduce the monthly bill.

    used auto loan

    Insurance

    Everyone who drives understands that they need car insurance. However, some people may not consider how their insurance interacts with a car loan. If you need to finance your car then it is likely your lender will require you to take out a comprehensive coverage insurance policy, which will be more than the state minimum insurance in most cases. This can add to your insurance if you previously only carried the minimum, but does protect you in case the worst happens. Having comprehensive insurance means that if your car is totaled you won’t have payments for a vehicle you no longer own or use.

    used auto loan

    Warranties

    The last thing that buyers have to decide is if they want any kind of warranty, assuming that is an option offered.

    Advantages of Warranties

     Reduced cost of routine maintenance

     Reduced cost of major repairs

     Protection from unknown mechanical issues

     Indication of vehicle quality

    Disadvantages of Warranties

     Cost more money, which could mean a bigger loan

     May not be used

     May not cover issues that come up

     Issues may not justify cost

    It is up to each buyer to determine if they should get a warranty based on the car they are getting and their specific needs and budget.

    Final Words

    As you can see, there are a number of ways to make buying a used car less stressful. Be sure to understand what you are looking for and to carefully evaluate the car before making a purchase, and you’ll find yourself on the road in no time.

    buying used car