7 Things to Consider Before Buying a Used Car

How much should I spend?

The golden rule in automotive budgeting is the 20/4/10 rule. It’s simple: First, you should make a down payment of at least 20%. Second, try to find a car that is no older than 4 years. Most importantly, your total ownership costs for that car should not exceed 10% of your pre-tax income.

For example… Max and Sarah are working professionals bringing in a total income of $100,000. They have saved $3,000 for their next shared vehicle. In reality, Max and Sarah should look for a vehicle from 2016 or newer that costs less than $833 a month, including insurance and maintenance costs. If they secure a loan for 36 months for $25,000 or less, they can reasonably expect to stay under $833 a month with insurance and maintenance costs. If they want to look for a vehicle in this price range, they will likely need to save more money if they can, as $3,000 only follows the 20/4/10 rule if they buy a car that costs less than $15,000.

What should I reasonably expect to pay for a used car?

Given the vast amount of vehicles available on the market, this is the wrong question to ask. You should first narrow down some makes and models of cars that you wish to purchase. After that, you can research the value of those cars in the Kelley Blue Book and see what they are selling for in your area.

Please note that car prices in the United States rose by 40% year-over-year from January 2021 to January 2022 due to inflation and supply chain disruptions stemming from the COVID-19 pandemic. Delays in obtaining new vehicles due to a shortage of semiconductor chips added to the demand for used cars.

How can I check a car’s history?

When buying a used car, it’s extremely important to check the vehicle history report, also known as a Carfax report. You want to ensure that you’re not getting a car that has been in a serious accident or has been stolen.

How can I find the most efficient and reliable car?

You have several good options for efficient and reliable used cars. Generally, you should look for cars and brands that have a good reputation for not breaking down, and consider your family’s needs: if you don’t have a large gang of kids, a compact family car isn’t a good choice, and a pickup truck isn’t practical if you primarily want to drive in the city.

How can I find used cars in my area?

A quick search on Google should reveal local car dealerships that have used cars available. For many, this is safer and easier than trying to buy a car from a private seller. This will also save you time and money on paperwork.

How can I request a test drive?

It’s important to test drive a used car, especially if it is no longer under the manufacturer’s warranty, as driving a used car is different from driving a new car. Call the dealership and let them know which vehicles you are interested in and the best day and time for you. It’s worth calling ahead to make your visit as efficient as possible; you don’t want to show up at a car dealership only to find out they no longer have a particular car.

When test driving a used car, plan to spend at least 20 minutes driving the vehicle so that the car is fully warmed up and not just going on a “neighborhood drive” as the dealership may want. Instead, you should drive the car hard and take it through full turns, brake hard, keep the windows open, and check for strange smells. Bring someone who knows something about cars with you to be a second set of eyes and ears to avoid making emotional decisions.

Note:

If possible, you should schedule all test drive appointments for the same day; this way, you will have an easy point of comparison, and every new car will be fresh in your mind. You will also have a convenient way to delay making a decision if the dealer is pressuring you. You can say: “I need more time to think about it. At the same time, I have another test drive appointment!”

How can I close the deal?

It may sound silly, but it’s a good idea to practice your negotiation skills before negotiating with a car dealership or individual seller. If you don’t feel confident, you can always bring along a friend who is more assertive or self-assured, or focus on how much money you can save over time by standing your ground.

Source: https://www.thebalancemoney.com/7-things-to-consider-before-buying-a-used-car-4685583