Buying a used car is a great way to save money, but many people fear that it means buying somebody else's problems. In fact, people trade in perfectly good cars all the time, and some people hastily trade in their cars as soon as they pay off their car loans. This isn't a wise move because even an honest car salesman will tell you that the only way to get your money out of a new car is to drive it until the wheels fall off.
How To Find a Good Used Car
When it comes to used car shopping, limit your search to late-model vehicles with low mileage on the odometer, due to warranty and wear and tear issues. Dealer warranties routinely cover drive trains for 100,000 and sometimes even up to 200,000 miles.
New cars depreciate quickly, losing a significant and disproportionate amount of their value in the first few years of ownership. This depreciation is priced into the purchase of a used car. This means that late-model used cars offer quality that is comparable to new vehicles at an affordable price.
Late-model used vehicles generally qualify for the balance of the factory warranty when purchased from a car dealer. The car may also be eligible for an extended warranty, which can be purchased for an additional cost from a dealership. Keep in mind that new car dealers specialize in late-model vehicles, sending older, higher mileage vehicles off to the auction or to smaller, road-side car lots. The odds of buying a solid used car from a new car dealer are much higher than the odds of finding a quality vehicle sold by a road-side lot or a private owner. Certain companies, like CostCo also offer specific used car programs.
Once you know that you are seeking a specific car with specific features, you will be able to inspect multiple vehicles and compare them against each other. To narrow down your list, start by thinking about what you want, such as gas mileage and four-wheel drive. Answering these questions will help you find a car that best fits your needs. Reading reports about vehicle reliability and maintenance costs will help too, keeping in mind that exotic models, like Jaguars and Porsches, are often significantly more expensive to repair than domestic vehicles.
Once you've got a category in mind, such as a four-door sedan or pickup truck, you can compare the offerings from various manufacturers. At this stage, call your insurance agent to get an estimate because if the car is significantly more expensive to insure, you can cross it off your list.
Your ultimate goal is to find a vehicle that is reasonably priced and in good condition. It may be worth your while to pay a little more for a better used car because your goal is to spend less money than you would spend on a new vehicle.
Once you've identified a few vehicles that you would like to consider, look them over carefully, inside and out. Note any scratches, dents, tears, rust or other signs of wear. When you test drive the vehicle, take it out on the highway and cruise a few back roads too so that you can see and hear the vehicle's performance in a variety of driving conditions.
If you don't know much about cars, take along a friend, parent, or another person who does. When you've narrowed your list down to just one or two potential vehicles, jot down the vehicle identification numbers and order a vehicle history report from one of the many services that provide them. Finally, hire a professional mechanic to inspect your car prior to making your purchase. Spending a couple hundred dollars upfront can save thousands in repair bills later.
The Bottom Line
While the fear of spending thousands of dollars on something that might break down is certainly understandable, with prudent actions on your part, the odds of buying a good, solid, reliable used car have never been better. Go in well prepared with comparable cost information at your fingertips and a budget in mind. If you're also planning on taking out a loan to purchase the vehicle, then an auto loan calculator could be useful for ensuring you've covered all of your bases. When you are ready to make a deal, negotiate the price.