Used Car Buying Guide
There may be more maintenance required on a used car that's out of warranty, and its financing may be a bit more expensive. But, choosing a vehicle with a good predicted reliability rating and low ownership costs can help you saa tremendous amount of money.
used car buying guide
In this guide, we'll take you through the steps you should follow to find the right used car, secure affordable financing, pay a fair price, and minimize the chances that you'll get a vehicle that's unreliable, overpriced, or unsafe.
Fortunately, used car buyers have more resources today than ever to learn about repair costs, frequent problems, and reliability. Information about certified pre-owned warranty coverage, average costs for common repairs, and predicted reliability ratings can be found in our used car reviews. You can see what issues drivers are dealing with by checking out dedicated owners' websites, such as Odyclub.com for the Honda Odyssey minivan. If owners of a particular car are having problems, they're probably talking about them somewhere on the internet. Just search for the car's name and "problems" in any search engine to get an idea of common issues.
An oft-overlooked factor you should consider when shopping for a used car is the cost of auto insurance. Prices can vary substantially based on the model you choose. Our guide to car insurance is the place to find the cheapest insurance with the right coverage for your new-to-you vehicle.
With our used car rankings, shoppers can compare pre-owned vehicles by their overall scores and individual factors car buyers tell us are critical to their buying decisions. These factors include predicted reliability, safety, performance, and interior comfort and features.
When you buy a pre-owned car, you can get options and features at a fraction of the price they'll cost you on a new car. Option packages and higher trim levels don't command nearly the same premiums on used vehicles as they do on brand-new cars.
Not sure if you want to take the leap into a used car with no warranty coverage? There is a used car option that does have factory warranty coverage. Manufacturer-certified pre-owned cars (CPO cars) offer a blend of used-car affordability with manufacturer-backed warranty coverage. They're usually low-mileage cars that are just a few years old, with service records and no history of accidents. They are often cars returned at the end of leases, dealership service loaner vehicles, or vehicles driven by dealer or automaker staff.
Another benefit of automaker-sanctioned CPO programs is access to special used car financing deals. Used car loans typically cost more than new car financing, but a CPO financing deal with a low interest rate can dramatically cut the cost you have to pay on your auto loan.
If you're sitting on a pile of money and plan to pay cash, you can skip this section. If, however, you're like most used car buyers, you'll need a loan to help pay for your used vehicle. It's true that you can have the dealership's finance office arrange your financing. Still, if you want to save money, you need to get a pre-approved financing offer before you get anywhere near a car dealer. A dealer may be able to beat your pre-approved loan, but if you don't have one, they'll have no incentive to do so.
If you're buying from a private party, you have no choice but to find your own financing. The process can be different for private-party buyers, so be sure to talk to your lender about what they'll need to move your loan application forward.
Shopping and applying for used car financing is similar to getting a new car loan, but there are some important differences. Because lenders consider used car loans somewhat more risky than new car loans, you should expect to pay a higher interest rate. Lenders typically consider used car loans riskier for several reasons, including the fact that their values are less predictable. It's the car's value that acts as collateral on the loan. Used car buyers also may face higher repair costs, which can compete with making timely car payments.
You might think you have to go to a brick-and-mortar bank branch to get a car loan, but there are many places you can finance a used car. Some work better with different types of borrowers than others, so you should talk to several before you decide which financing deal is best for you. Some lenders have programs that provide lower rates or other benefits to existing customers, while others cater to borrowers with damaged credit. You can save money and hassle by taking advantage of these programs.
Community banks offer many of the same auto-lending services as large banks, but they do so with a smaller geographic footprint, fewer branches, and often a more personal touch. Like credit unions, community banks are great places for borrowers who need a bit more help to finance their used car purchase successfully. With their roots in the communities they serve, many will be able to offer tips about other businesses in the area that can help you through the car-buying process.
Just as smart buyers should talk to multiple car dealerships and other sellers before buying a used car, you should apply at multiple lenders to find the best financing deal. It's critical to do so during a short span of time, so the credit reporting agencies don't think you're taking out multiple loans and ding your credit score over and over. Do your shopping over a week or so, and they'll just see it as one transaction. That's important, because each transaction that pulls a credit report lowers your credit score by a few points.
It's important to run the numbers yourself and not to rely on the math of a salesperson. They're trained to keep you focused on the payment, because they know that's the easiest way to get you to overpay for your used car.
Just as there are many places to get used car financing, there are various places where you can purchase a used car. Each has its strengths and weaknesses in terms of service, ease, and price. Like the car you want to buy, you should strive to learn as much as you can about the dealership or private seller trying to sell it to you. Checking the company out with your local Better Business Bureau or consumer protection agency is an easy way to find out about their track record. You don't just want to look at the number of complaints, but how they responded to correct the problems.
Most new car franchises have adopted strict COVID-19 protocols, mandated by their manufacturers, to protect both customers and dealership staff. Some have robust online buying processes and home delivery options.
When it comes to used car dealerships, national or regional used car superstores are the new kids on the block. They offer many of the same advantages of franchised new car dealerships, such as expertise in handling paperwork, step-by-step buying processes, and access to an array of lenders. Many sell their own line of add-on products, such as extended warranties valid at any of their locations.
They also have access to a vast selection of used cars. With most dealerships, you're limited to the pre-owned vehicles they have on their lots. That's not the case with used car superstores such as CarMax, which can draw on inventories from across the country and bring those vehicles to your local outlet.
Independent used car dealerships are typically small, locally owned businesses. They buy and sell used vehicles, arrange financing, and take care of the purchase paperwork. Their inventory typically comes from wholesale auto auctions. Most don't have service departments and have less total overhead than a typical new car dealer.
Because of their reputation for taking advantage of the most vulnerable buyers, most consumer advocates advise against buying a car or financing at a buy here, pay here dealer. If your credit is so poor that this type of dealer is your only option, you should not be buying a car. Doing so only invites further financial troubles.
When you buy a car from a person or business that's not in the business of selling cars is known as a private-party purchase. It can be the cheapest way to buy a used car because you don't have to pay for a dealership's overhead or profit. A private-party sale generally provides the seller with the best return, and the buyer with a lower price than they would find at a dealership.
Sales Information: The sales information section of a vehicle history report will show when the vehicle first entered service and how many times its ownership has been transferred. Watch for vehicles that have been moved repeatedly from state to state, or from an area that has recently endured floods, fires, hurricanes, or other natural disasters. Not only is moving a car one way to mask title issues, but it can also be used to hide flood damage.
When the time comes to start looking at used cars in person, your first impression of both the vehicle and the seller should tell you if you should move the process forward or walk away. If you're looking at a car from a private seller, it's a good idea to treat it like a blind date and meet somewhere public away from your home and theirs. You want to look at cars in the daylight, as the dim light of evenings can prevent you from spotting damage.
Evaluating a used car means using all of your senses (except maybe taste, because that would be gross). It should also include your sense of intuition, which will help you determine if something doesn't seem right.
Taking a test drive is one of the most critical tasks in buying a used car. However, the rules have changed due to the coronavirus pandemic. You need to place your personal safety above all else. You should insist on taking your test drive solo. If the seller refuses, either walk away, or set strict ground rules about mask-wearing, drive with the windows down, and ask them to sit as far away as possible.
While you should note every flaw during the drive, not all should eliminate the car from consideration. Some issues can be used as bargaining chips when negotiating a price. All issues should be brought to the attention of your pre-purchase inspection mechanic. 041b061a72