How to Get a Good Deal on a Used Car
Image: Jeremy Brooks
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Are you in the market for a new-for-you car? Your best bet is most likely a used car! A brand new car usually loses between 20-30% of its value in just the first year! That means that buying a one-year-old car that was initially $21,800 will only cost you $15,260 (numbers are from Edmunds.com). That one year saves you a lot of money!
How, though, can you find the best deal on a used car? There are several different strategies you can use. This article will highlight some of the best ways to find a bargain on a used car.
Buy the car–not its name. Some of the more popular car brands, such as Honda and Toyota, come with an additional cost just to buy the “name” of the car. Sometimes, considering less-well-known cars can save you quite a bit. For example, if you are considering a Toyota or Honda, you might also want to consider a Nissan, Mazda, or Mitsubishi. Sometimes, these other cars are just as good as the Toyotas or Hondas but are significantly cheaper. You will also want to research the cars thoroughly to make sure you really are buying an equivalent car in quality. Of course, this does not mean that you cannot buy a Honda or Toyota. It just means that you may be better off by considering the competitors.
Pay cash for the car. One of the biggest unnecessary expenses when buying a car is interest. Interest payments can be completely avoided by paying for the car up-front with cash. Now, this may not be a possibility for everyone. However, the more you can put down up-front on the car, the better off you are.
Look beyond the dealership. While buying a car from a dealership may be a valid option, you may be better off looking elsewhere. Consider auto auctions, estate auctions, and consignment auctions. Many dealerships will buy cars from these places to resell. I personally bought my Ford Taurus from an auction for only $2000 three years ago and I have had virtually no problems with the car. It has worked wonderfully for me! You can also look online at sites such as Ebay Motors and AutoTrader to see if there are any good deals, there. Many times you can get an even better deal just by looking around your neighborhood and other local areas for cars being sold by private parties. The key to each of these methods is to ASK A LOT OF QUESTIONS. A lot of these sources may not be as forthcoming about problems with the cars they are selling. It is up to you to ask specifically about any problems the car might have.
Research! Research! Research! It is difficult to find a true bargain without doing your research. Make sure you know the value of the cars you are interested in beforehand. Also, take a look at their safety and reliability ratings. There are many online sites that can help you with this research: Edmunds.com, AutoTrader.com, Consumer Reports, etc. You want to make sure you know whether you are getting the best car for the value. Also, research individual reports. If you can, get a Carfax report about the car. Use this Used Car Question Sheet from Edmunds.com when talking to car owners. Also, make sure you test drive the car. Don’t be shy–this is a serious investment.
Take the Car to a Mechanic. It is important to take any used car to a professional mechanic to be inspected. This step can save you from buying a lemon car.
Negotiate! Although some places do not allow negotiation, most expect it. If you are not willing to negotiate, you are unlikely to find a good deal on a car. Some key tips for negotiating are to make sure you do your research, be ready to walk away, and start with a low offer. For more negotiating tips, see this article from Edmunds.
Do you have any other used-car-buying tips? Be sure to share them with us!
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Excellent tips. My wife and I may be looking for a car in the next few months and these tips will come in handy. We like saving money, so used is a great option, but we may go for a new car if the Obama administration approves the “Cash for Clunkers” bill that has been bandied about. There are potentially very nice savings in that plan, as well as being able to deduct the sales tax on a new vehicle this year. I guess we’ll see…
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Thanks for posting, I’ll definitely be subscribing to your blog.
I’ll second you on that researching part – the more the better! it may not be all that fun, but it sure does pay off… Also great going used over buying new right off the lot…even if it’s a few months “used”.