Used Car Buying: 5 Things to Know Before Buying
Buying a used car isn’t something many people look forward to. Unlike buying a new car, where the thoughts of reliability, mileage, and vehicle history reports aren’t in buyers’ minds, you have a lot more due diligence to perform when buying a used car vs. buying a new car.
For those want to go above and beyond to not only get a great deal on your next vehicle, but ensure you do so on a budget and end up with the best option, this guide is for.
Here are five things you need to know before buying a used car!
Plan and Stick to a Budget
Having a budget based on what you know you can afford is the first step to avoiding trouble when buying a car. It doesn’t matter how much you make, buyers of all income levels can find themselves in hot water when they don’t crunch the numbers carefully enough.
The first step is to figure out the total price of the car. Most buyers think only in terms of monthly payment, which is the first mistake you can make when buying any vehicle. Many experts believe that your car values should only total half of your annual income. This means if you make $50,000 a year, you should only have $25,000 in cars.
Others believe keeping all automotive-related expenses to 20% of take home pay--which includes car payment, insurance, registration, repairs/maintenance, and gas--is the best way to look at vehicle affordability.
But at the end of the day, each individual’s situation is different. A couple with kids may need to be more strict with their budget, while a single person with less responsibilities and expenses may want to splurge on a nicer vehicle. It all depends on your own research and what you believe can realistically fit into your budget.
The most important thing is to stick to the budget once decided upon and avoid the temptation to spend more than you’re able to afford.
Research Reliable Vehicles
Once your budget is finalized with a price, research your available options that are within your budget. Sites like U.S. News and World Report’s car research portal offers detailed lists of the best vehicles in many categories based on balanced criteria, including expected prices.
They even offer lists to search for specific types of vehicles under a certain price point. This may be one of your best resources for those looking to quickly get a bird’s eye view of what’s out there and which vehicles are highly rated compared to others.
Once you’ve got your list down to a few vehicles, check the reliability based on user data using sites like Car Complaints and True Delta. These sites feature detailed information from real owners that will give you insight into typical issues some models have, when they occur, and what they cost to fix.
Using these resources will help you make a more informed decision on the specific model to purchase, and help you avoid models with severe issues.
Search for Market Pricing
Most car dealers use tools to price their vehicle based on the local market and condition of the vehicle. You can utilize similar tools to verify that the price you’re getting matches the market value to ensure you’re getting a fair deal.
Sites like NADAGuides.com and KBB.com offer detailed pricing data that shows the fair market value of all vehicles. NADA will breakdown how much mileage and vehicle options play into the overall price of a vehicle, while KBB provides a base average and a range for fair market prices.
Keep in mind many listed vehicles may have added options or extras not counted, which can explain why some vehicles are listed higher than others in the fair market value spectrum.
Now that you’ve got this pricing, you can start browsing car dealer websites to discover vehicles that meet all of the criteria you’ve found throughout this process.
Ensure You Review the Vehicle History Report
After you’ve found a vehicle that fits your budget and research criteria, always be sure to check the vehicle history report for red flags. Many vehicles may be priced lower than others due to accidents, multiple owners, other damage.
The vehicle report can also tell you how regularly the vehicle was maintained and any specific repairs that were done during its lifetime. If you want to get really detailed, you can check the vehicle’s maintenance schedule online to see if the vehicle history report matches up with the data provided.
Always Test Drive Before Buying
Depending on your personal preference, test driving may not be as important to some as it is to others. But every vehicle is different, and you may not like how the seat feels, how the steering feels, or how the throttle and braking feels.
If you’re going to spend a lot of money on something you use as often as a vehicle, it’s important to actually enjoy it instead of just putting up with it.
To get a really good idea of how the vehicle will treat you, ask the dealership for an extended test drive and spend a few hours driving around town and going about your day. While it’s easy to overlook flaws during a 10-minute test drive, your true feelings will come out once you’ve had extended time to drive around, park, run errands, and get used to the vehicle.
Armed with this information, you’ll be able to plan your next used car purchase like a pro!