10 Important Used Car Buying
by David Louis Johnson
1. Define a budget before you go shopping for a used car.
Whether you are paying cash or financing you need to know how much vehicle you
can afford. If you are financing, it is recommended that you don't take a term
longer than 60 months.
2. Don't get hung up on a particular make or model of used car. Most cars built
in the last few years are reliable and will serve you well. Don't pass up a
great buy on a car or SUV because you don't like the badge.
3. Take a thorough test drive. Make sure you drive your new-used car in a
situation like you would drive it in everyday.
4. Know the used car market. You want to do this not just to make sure you get a
good deal but also to save yourself from headaches. Know the wholesale vs retail
value of the models you are considering. Keeping in mind that the dealer will
need to make a small profit, try to buy you used car of choice at the lower
range of retail values.
5. Directly related to #4, make use of wholesale guides. In Canada, Canadian
Black Book or in the US Kelley Blue Book whole sale values.
6. Have a realistic understanding of what your trade is worth. Many less
experienced buyers fell into the trap of thinking their trade in is worth many
times what it is. This can lead to trying to buy a vehicle that is way out of
their budget. Using the wholesale guides listed in #5, try to determine the true
value of your trade. If the car is older than about 6 model years you may want
to consider selling it yourself as it will be worth so little to the dealer.
Bear in mind your trade is worth the wholesale value (not what you see on
Craigslist) minus any repairs it may need. For example a car that sells for
$5000 retail may need $1000 in work, then the dealer will need to make a profit
so the real trade value would be $2000-$3000.
7. Get everything in writing. If there are any promises or warranty attached to
the purchase of your used car make sure you get the details in writing. Ideally
you will buy a car with some left over factory warranty on it. Most manufactures
today offer at least a 5 year warranty on the car's engine and transmission that
is transferred form owner to owner.
8. Know the history of the used car you are considering. This is very important.
Many of the "great deals" out there are damaged vehicles that have been
repaired. It is normal for a car to have a few bumps and scraped in its life
(repairs typically costing $1000-$4000). Where one needs to be careful is when
you see a repair for over about $6000. This means there was significant damage
done to the car. Even after a good repair the car is never usually the same if
there has been frame damage. In short shy away from anything with a rebuilt
status of an accident claim exceeding about $6000. In Canada CarProof offers a
comprehensive report on the history of a vehicle as does CARFAX in the US.
9. Control your emotions. If you want to get a good deal on a car don't let
wants turn into needs. Remember there are many cars out there make sure you have
covered all the bases before you make a decision.
10. Try to find a good sales person and dealer. Who you buy the used car from is
almost as important as the car itself. Try to form a good relationship with a
dealer and salesperson who are knowledgeable and trustworthy. This relationship
can be of great value during and after the sale.