No one said buying a used car would be easy. However, anyone who does their homework can help themselves get a better deal. For those who worry about depreciation and poor reliability records websites, such as Kelley Blue Book and Consumer Reports, serve as valuable resources. To navigate the usual tricks and lies a car salesperson might try on you, we have a few ideas about protecting yourself.
Yet even a well-informed consumer can make mistakes when shopping for a pre-owned car, and some of them will end up costing you serious money. Here are the most costly errors to avoid, leading up to the most expensive mistake you can make during the used car-buying process.
8. Limiting your search
There are many places to find a used car. Obviously, auto dealers have vehicles that customers traded in, but that’s only the start. You might find your next car on one of the Internet search engines or in a local newspaper, and auctions for repossessed cars offer yet another source. Meanwhile, there’s probably a guy parking his old Impala near a busy intersection with a “for sale” sign in the window.
In other words, you won’t find the best price by limiting your search to one place. Who knows? Maybe the guy with old Impala was obsessive about maintenance and will deliver an amazing deal. You never know unless you keep your options open.
Next: It’s the total cost, not monthly payment, that counts.
7. Focusing on monthly payments
Everyone needs a bottom line when buying a car. Hopefully, you start your search with a number you can afford every month for the payment. However, you have to see the whole vehicle cost to make sure you are getting a good deal. If you aren’t paying attention and accept a longer loan term, you could pay thousands more in interest charges. That could sting your finances for years.
Next: Don’t forget to peek at new vehicle costs.
6. Forgetting to compare new cars
We hear about instant depreciation so often we forget some new cars hold their value really well. A 2016 study by iSeeCars shed light on this subject. After at least one year on the used market, a Chevy Colorado sold for an average of 8% ($2,311) less than one you could buy new. Considering the extra warranty protection and other benefits of a new model, it doesn’t make much sense to buy a Colorado used. You might find the same about the vehicle you want, so run a check beforehand.
Next: Some loans come back to haunt you.
5. A bad used car loan
Consumers can find themselves falling for various auto loan traps. In one example, dealers offer you an interest rate normally reserved for someone with bad credit. Another common mistake is accepting automaker financing without checking with banks and local credit unions. Before you go into a dealership or talk to a private owner selling a car, know your financing options to protect your finances.
Next: This monthly add-on could also hit your wallet hard.
4. Not checking insurance rates
Don’t assume anything when it comes to insurance for your next vehicle. Even if you never had an accident or speeding ticket, you could be choosing a late-model car with really high rates in your area. Before you close the deal, give your insurance agent a call, and see what it would cost you for the model you plan on buying. For a more informal estimate, just run the numbers online.
Next: A long drive will speak volumes and save thousands.
3. A really quick test drive
An extended test drive is important for several reasons. For starters, you might not notice mechanical issues until you travel up a hill or back your way into a parking spot. (Make sure to hit the highway and go downhill, too.) Just as importantly, you might not realize something you don’t like about the vehicle until 30 minutes or so in the driver’s seat. If an issue turns up later, you’ll lose serious money in repairs or the cost of exchanging your ride for another one.
Next: Reliability records don’t lie.
2. Ignoring reliability and repair costs
Along with the data collected from car owners by Consumer Reports, used car buyers can look into dependability studies by J.D. Power & Associates to learn about a car’s long-term ownership experience. If you are buying a luxury car, do yourself a favor, and check in with a local mechanic about availability of parts and the expense of typical repairs. When you ignore these factors, your upkeep costs could cost you serious cash in the future.
Next: The worst thing you can do buying a used car
1. Buying without an inspection
Say you checked your finances, learned about reliability for the specific model, and investigated a car’s accident history, too. Even armed with all that knowledge, you could still make the most expensive mistake possible: buying a car without a full inspection. You might know what a broken hose looks like when you pop open the hood, but few people will notice some things, such as worn brake pads or a subtle leak.
A mechanic will only find these things by examining the car on a lift. While it will cost you more than a mobile inspection on the ground, a complete check by someone you trust will deliver much greater value in the future. You could be facing expensive repairs a few thousand miles down the road. So save yourself the stress and cash by spending $100 or so to do it right.