Saving money by purchasing a pre-owned car can be an excellent way to stretch your dollars. But before making any decisions, do your due diligence and research the market thoroughly.
Here are a few tips to help you assess a used car: knowing your budget, doing research and negotiating. These strategies will enable you to get an excellent deal on your next vehicle purchase.
Know Your Budget
Knowing your budget is a critical element when shopping for a used car. Doing this can prevent you from purchasing something out of your price range and helping guard against being taken advantage of by salesmen at car lots.
If you don’t have enough cash to purchase a used car outright, financing the purchase is necessary. Crafting an effective financing strategy ahead of time will give yourself the best chance at finding the ideal vehicle within your budget.
As a general guideline for car buyers, they should not spend more than 20% of their gross income on an automobile purchase. This includes your auto loan payment, insurance premiums and maintenance expenses.
Do Your Research
One of the best ways to increase your chances of finding an excellent car is by doing research before visiting a dealership. This may involve asking questions to the right people at the right time and reading reviews of cars within your price range on sites like Edmunds. Additionally, have an in-depth knowledge of the vehicle you’re considering buying so that any potential issues can be avoided before they arise.
Start by creating a budget and understanding what you can afford. There are plenty of online tools that can assist with this, such as calculators and comparison shopping services. The key to success lies in using these resources as guides and staying committed to it.
Know the Vehicle’s History
When searching for a used car through online classified ads or private sellers, knowing the vehicle’s history can help you decide if it’s worth investing in. You’ll be able to determine what repairs have been done, if it has been involved in an accident and if any government-mandated recalls are open.
The report will also indicate if the vehicle has ever been declared a total loss or is in a salvage yard. This information can save you much hassle in the future.
Fleet or rental use is another key indicator to check for when researching a vehicle’s history. These vehicles tend to have better maintenance records than personal cars do.
Know the Vehicle’s Warranty
The manufacturer’s warranty is an essential aspect of purchasing a new car. This coverage covers parts and labor to correct any manufacturing or material defects. Usually, this warranty lasts for a specified period of time (e.g., 3 years and 36,000 miles), providing peace of mind to you as the new car owner for years to come.
There are several ways to determine if your used car is still covered under its factory warranty. The first step is locating your Vehicle Identification Number (VIN), which appears as a 17-character sequence on various places on the car body. This number looks like a snowflake and can be located somewhere on its exterior.
Your VIN number can provide valuable information regarding the coverage, original date of sale and transferrability to a second owner. Most bumper-to-bumper warranties can be transferred, however powertrain warranties are typically only valid for the original owner.
Negotiating a lower price on a used car doesn’t have to be intimidating. Just make sure you go in with an approach and utilize all your research.
First and foremost, you should determine the MSRP (Manufacturer Suggested Retail Price) of any car you’re thinking of purchasing. This is the price automakers set for their models and it also appears on new vehicles’ windows as their sticker price.
You’ll need to determine the dealer invoice price. You can do this by consulting pricing guides such as Edmunds or Kelley Blue Book for estimates.