When done right, buying a used car can be an excellent financial decision. It allows someone else to take the biggest depreciation hit, and you still get to enjoy a fairly new model at a more affordable cost. But finding the right used car takes work and shouldn’t be rushed. Read on for tips to get the best deal possible.
Buying a Used Car with Cash
Buying a used car with all cash is great for negotiating a good price and sticking to a budget. Just be sure to leave some funds in your savings account for repairs or other emergencies down the road.
Financing a Used Car
If you don’t have enough cash to buy a used car outright, you’ll need to obtain financing. Start by reviewing your budget and determining what you can afford to pay each month. Then, shop rates and seek out a lender, like Orange County’s Credit Union. This should all happen before you start car shopping.
When you get pre-approved for a loan, you get to work out the math in advance. You’ll know your interest rate, term options, and the max amount of money the lender is willing to give you. You know exactly the price you can pay to get the desired monthly payment you want. The pre-approval ensures you stick to your budget. It’s as good as a cash offer.
Choose a Used Car for Your Specific Needs
Once you’ve determined your budget, you can finally start researching used cars in your price range. Consider your lifestyle, and then look for makes and models that have proven track records and will fit your needs. For example, if you have a long commute to and from work, you might look for a late-model hybrid that will help you save on gas.
Research Used Cars
The best place to start your used car research is online. You’ll be looking for reviews on reliability and cost of ownership, plus any specific features you desire (like ample cargo space for your family or exceptional gas mileage for long commutes). Next, check Kelley Blue Book or Edmunds for pricing on a model in good condition.
Find a Seller
Once you’ve decided on a car that is roughly in your budget, you need to find one for sale. Used car sellers abound – from private owners to brand-name dealerships offering certified pre-owned cars, to the corner lot that sells cars purchased at auction. It’s hard to know a safe bet. If you need help, try our auto buying service through Autoland. It takes the hassle out of searching for and negotiating a car purchase. Just tell them what you want, and what you can spend, and they’ll do the rest.
Test to See if It’s the One
Once you identify a specific used car to buy, reach out to the seller to set up a test drive. It’s also a good time to get the vehicle identification number and do a check on the vehicle’s history. If it has been in accidents or suffered other damage, you may want to walk away. At the very least, it’s leverage to negotiate a lower price. If the history checks out, meet the seller for a test drive to get a hands-on feel for the car.
Negotiate and Buy Your Used Car
Once you’ve recieved a pre-approval, done your research, and test driven to ensure you actually like the car, you’ll be ready to negotiate on the price. Being armed with financing and knowledge about what the car is worth should help things go smoothly.
If you’re buying from a dealer, try negotiating with the online fleet manager before you step foot on the lot. This is usually a good way to show you’re a serious buyer and could save you time once you get there to close the deal.
If at any point you feel the seller is being unreasonable or trying to give you the run around, walk away. If they're serious about selling the car, and your offer is fair, they’ll call you.
Final tip: never let the seller know you absolutely need to leave with a car at the end of the conversation. They will use that to make you give in when you want the negotiation to end. Show up with a full belly and be prepared to spend all day if that’s what it takes to get the best deal.