5 Worst Mistakes You Can Make Buying a Used Car
Buying a car is always tricky. Whether you are scouting a local car dealership or sorting through used cars online, the experience can be overwhelming, especially if it’s your first time. Since new cars come with warranties and a pre-owned model may not, consumers have a separate list of concerns when buying used.
Still, there are advantages to choosing used over new. If a vehicle is at least four years old, chances are the biggest chunk of depreciation already hit. Whatever the owner originally paid, you will pay a fraction of that price for a car with (ideally) fewer than 80,000 miles. That’s why some cars are always better to purchase used.
By that point in the vehicle’s life, there are going to be extensive reviews online detailing reliability and other long-term ownership concerns. In other words, you’ll know if a brand-new model turned out to be a lemon. As you sort through the vehicle types at prices you plan on paying, you can begin narrowing the search.
However, your task is only beginning. Once you spot a car, truck, or SUV you’d like to buy, don’t repeat the blunders others have made in the past. Here are the five worst mistakes you can make as a used car buyer.
1. Bad financing packages
Consumers can typically get loans on cars less than five years old, so financing concerns may not apply. If you do choose to go for a late-model car, finance as little as possible to avoid paying more in the long run. Pre-owned dealers usually offer high rates with fees attached, so they are best avoided. Instead, head into the transaction with an approved rate on a loan amount from a third-party lender. If the dealer beats the terms, by all means take that offer, but in most cases you’ll find better financing packages on your own. Whatever you decide, always see the full car price — including all loan fees and interest added to the car price — before you buy.
2. Skipping a full inspection
Because there are so many unknowns with a used car, never buy one without a full inspection. Edmunds recommends having a mechanic hoist up the vehicle to look for fluid leaks as well as typical under-the-hood checks. At the same time, the mechanic will check on tires and break pads to see if replacements are needed in the near future. Before you fret over the $100 or so it costs for this service, remember you can negotiate the price down much more if the inspection reveals problems. It’s always worth the money.
3. Taking only a quick test-drive
If you plan to drive the car for the next five years or so, why would you agree to buy it after a quick spin around the neighborhood? You might fall in love with a car’s looks on a lot or driveway, but reserve judgment until you drive it 20 or 30 minutes. Make the rounds on local roads, highways, and your usual routes. You’ll quickly see if you like the handling and whether the car can handle bumps, merging, and other routine tasks. It also gives you a chance to see whether the tech is practical or a nuisance.
4. Selling low on your trade-in
Another big mistake used car buyers make is selling low on their old vehicle. Dealers who accept trade-ins will offer the lowest possible price in order to make a profit on the sale. Don’t be swayed by these low-ball amounts. Before you even start shopping, research the trade-in value on KBB.com and other sites so you have a ballpark. Also, get an appraisal and offer from CarMax before you sell your old car. This quick research gives you the knowledge you need to bargain for your old model. Too often, used car shoppers give in to salesmen who talk a good game.
5. Forgetting to check insurance rates
Consumers who go from a 2013 Honda Accord to a 2015 Ford Mustang might be in for an insurance rate change. Whether you expect your monthly costs to go up or down, get a quote from your broker before you buy. (It may be time to ask a new insurance company about their rates, too.) Buyers with minimal financial flexibility could be blindsided by a rate hike, otherwise. This step allows you to put a single price on your monthly auto fees for the next few years. Don’t sign off on a used car purchase without taking it.
Check out Autos Cheat Sheet on Facebook!