How to buy a used car without getting ripped off
By Laurence MacNaughton
Why buy a used car? You’ll save money – a lot of it. The average new car loses 20% of its value by the end of the first year. After two years, it’s worth 40% less than you paid. Can you imagine losing nearly half of your money in just two years?
Might as well roll the window down and toss out your wallet. Instead, save your money and shop for a used car. Here’s how.
Forget the old car-buying myths
In the old days, buying a used car meant buying someone else’s problems. And once upon a time, that might have been true. But today’s cars are better built than ever before.
The average car on the road today is 11 years old. More owners are keeping their cars to 200,000 miles and beyond. It’s a fact: modern cars, on average, last longer.
If you’re looking for a used car, you have a wealth of resources at your fingertips to help you shop smarter. You can tell what price you can expect to pay (the blue book value) on sites like kbb.com or edmunds.com.
And publications like Consumer Reports can give you solid reviews and reliability ratings.
How will you pay for a used car?
The smartest way to buy a used car is with cash. Mathematically, saving up for a car is cheaper than making payments.
Besides, if you can afford to make monthly loan payments to a bank, then you can afford to make those same payments into a savings account instead. Bonus: you’ll earn interest instead of paying interest.
If you do decide to go into debt to buy a car, decide how much money you’ll spend before you start shopping. Not only does that narrow down your list of car choices, it also gets you focused on finding the lowest interest rate.
Shop for a loan from your credit union or local bank. A loan from a car dealer is likely to be much more expensive.
Do you know what kind of car you want?
You might have a particular make and model of car in mind, which makes your search simpler. But if not, don’t feel overwhelmed.
Sites like Autotrader.com and Cars.com let you search not only by make and model, but by body style and features, too. (Look for “More Search Options”.)
Start with a list of features that you’d really like: four wheel drive, four doors, automatic transmission, and so on. Then narrow your results to your price range, and start looking at the lowest-mileage vehicles first.
Questions to ask when buying a car
When you find a car that might work for you, ask the seller a few questions:
• Why are you selling this car?
• Who did you buy this car from?
• What kind of work does it need?
All three questions are designed to get the seller talking about the car. It should be a pleasant conversation. If the seller gives you vague, confusing or troubling answers, look elsewhere.
Test drive tips
When it’s time to see a car in person, spend a few minutes walking around it, focusing on the details:
• Do you see dents, scratches, or rust?
• Do you see evidence of repainting?
• Are the tires worn out?
• Are there oil stains beneath it?
When you take it for a test drive, listen for squeals and clunks. Pay attention to the feel of the ride.
• Does it steer smoothly?
• Does it sway over bumps?
• Pull to the side when you brake?
• Bog down when you accelerate?
• Upshift and downshift smoothly?
Check every single system you can think of: headlights, turn signals, power windows, A/C, alarm and so on.
When you finish your test drive, you should be absolutely thrilled with the car. Don’t settle for a car just because the price is right, or because you’re tired of car shopping.
Remember, you’ll be living with your next car for a long time, so be patient. The right car is out there.
Get a used car inspected by a mechanic
When you find a car that feels just right, you should have a reliable mechanic inspect it. For about $100, a good mechanic can tell you what needs to be fixed right away, what might need attention down the road, and any deal-breakers that are more trouble than they’re worth.
If you still want to buy the car after the inspection (and you might not), use the information to negotiate a lower price with the seller.
If the seller outright refuses to allow a mechanic’s inspection, just walk away from the deal. It’s not worth the risk.
Check out the vehicle’s title
Make sure that the seller has the actual paper title. And, even more important, make sure that there is no bank lien on it (meaning that the seller is making payments on the car). If the seller doesn’t own the car outright, you’ll have to meet with the financial institution to buy the car.
Other dealbreakers to watch out for
• A salvage title (sometimes denoted by just an “S”)
• A title that is in someone else’s name, or a company name
• A vehicle that was just sold at auction
Any of these could signal a lemon, so proceed cautiously. Or better yet, keep looking. There are a lot of other great cars out there.
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