Step 1: Determine Your Budget
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For example, if you are considering buying a used Ford Fiesta ST you need to consider how much it will cost for fuel, scheduled maintenance and a reserve fund for any unforeseen costs (this goes for any car you are thinking about purchasing, regardless of its being a new or used car). As for the last point, when you are negotiating the purchase of a used car make sure to understand what kind of warranty it comes with because that can alleviate some of the financial burden associated with unforeseen car problems.
Your next decision you will have to make is whether or not you want to pay for the whole car up front or if you are going to take a loan. If you have saved up enough money to pay for the whole car then you will end up saving money on interest and any other fees that come with a loan. Plus, if you buy the car outright you will not have a monthly payment. On the downside, you will have to start saving money after buying your new previously owned car to restock your financial reserves.
If you do decide to go the loan route you have many options. You can get a loan through the dealership, the manufacturer or even through a third party. With loans you will probably have to put some money down and there will be a monthly payment. Make sure that you read and understand the loan agreement before signing it.
Step 2: Preliminary Used Car Research
Once you have determined your budget now you can start searching for used cars. There are literally thousands of options for used cars once you factor in make, model, year and other options. This process can become daunting if you let it and that is why you need to focus your search down to a manageable set of cars.
To do this, you will have to do some research. You can start with a list of cars you think you would like or search for cars that have a predetermined set of features that you are looking for in a used car. To do this you can visit car rating sites, check used car forums or, better yet, visit a local dealership.
By going to your local dealership you will be able to talk with people who know the new car and used car landscape very well and you will also have the opportunity to do some test drives (more on that later). The availability of the used cars you are looking into is also a factor because if you live in a smaller market and are unwilling to have a used car shipped out to you or are unwilling to pick it up your options are not as great.
Step 3: Picking a Used Car
After you have a good sense for what is available in your market you will need to whittle down your list of possible used cars into one or two options. For example, you have decided that you will either purchase a Toyota Camry or Honda Civic made in 2005 or later and that your budget is $20,000. The reason behind not limiting yourself to only one car is so that you maintain more negotiating power during the buying process.
More research is needed at this point because you need to determine what the value of these cars are. The most straightforward way of accomplishing this task is to look on carfish.com to see what these used cars are selling for. Carfish.com has thousands of used cars available within a couple of clicks and you can easily see what the market value of these cars are.
Step 4: Find your Used Car’s Availability
Now that you have a couple of used cars in mind you will need to start contacting sellers. This can be a difficult process but it doesn’t have to be if you use the right tools. With carfish.com you can narrow your search down to specific geographic locations, make and model of car, new cars or used and price range. Once you have done this you will get a list of all used cars matching your criteria in your area.
And making an appointment to look at these new cars is only a few clicks away.
Step 5: Inspecting a Used Car
Now that you are face to face with what might be your previously owned car you need to check it out to make sure that there isn’t anything obviously wrong with it. Look at the tires for uneven wearing or if they are not properly aligned. Check out the engine to see what condition it is in.
See if there are any dings on the body and check inside the car to make sure that everything looks and works like it should. Finally, check to make sure that the Vehicle Identification Number on the side of the driver side door and on the top of the instrument panel match; if they don’t that could indicate major repairs were done to this car.
Step 6: Obtain Used Car’s History and Safety Report
Your due diligence does not end once you have determined what used car you are looking for. Whenever you are going through the process of buying a used car you should get the car’s history and safety reports.
With the 17 digit Vehicle Identification Number (VIN) you can check the car’s title and obtain a detailed report on the car’s history. Doing this step will let you know whether or not a specific used car has been in any accidents or has been damaged. Also, it is a good idea to get all the service records available on a used car.
These records can show you if a car has had specific problems and if these records reveal a bad pattern then that is a sign that you should probably not buy that car.
Step 7: Test Driving a Used Car
You’ve done most of your due diligence on the car at this point but you still have to test drive it. Before you start the engine sit down in the car and see how it feels.
- Are the seats comfortable?
- Do the mirrors work properly?
- Are there any problems with the cup holders, head rests, ability to adjust seats, glove compartment, seat belts or anything else that moves in the car?
- What is the visibility like in the car? Are there any blind spots?
- Can you easily see all the gauges and controls without having to move your head too much?
- Is there enough room in the driver’s area to comfortably maneuver?
- How easy is it to get in and out of the car?
With the key in the ignition turn it to the accessory position, which is the position right before you actually turn the engine on, to check and see if all of the dashboard lights work properly. If they do then turn the car on and listen to the engine. Any weird noises, like clanking or screeching, or if the car takes a while to start are bad signs.
When you are actually driving the car make sure to mimic your daily routine as much as possible and if you ever travel on a highway take the car up to 65 mph on a local highway. When you are driving, make sure to pay attention to any noises coming from the engine that are out of the ordinary. If the steering wheel vibrates when driving that could mean the tires are unbalanced and if the car goes to one side or the other when you brake that could mean there is a problem with the brakes.
Step 8: Negotiating a Used Car Deal
There are a few things you should know about how dealerships sell used cars. In a nutshell, the total picture for the dealership involves the price of the used car, the value of your trade in if you have one, how large is your down payment if you finance with the dealership as well as the monthly payment you are looking for.
Added on to that are any options you want to add on to the purchase including warranties, upgrades to the car and any work that you want done to the car. Remember to get everything you negotiate for with the dealer in writing and everything mentioned above you may be able to shop around to find better prices except for the actual price of the car.
The main thing to keep in mind is that you can always walk away from any negotiation without signing on the dotted line. You are the person who has the power in these negotiations because you have many options. Don’t talk more than the car salesman talks and make sure to listen to everything he or she has to say.
The second most important thing you should keep in mind when negotiating for a used car is to have a plan that you do not deviate from. If you have followed all of the previous steps and you have found the perfect car for you then you should also know how much you are willing to pay for this car in total and how much it costs at other locations. This requires you to figure out how to calculate the total cost of any payment plan you agree to and making sure that total is less than or equal to the amount of money you are willing to pay.
If you are trying to purchase a popular used car they tend to be sold pretty quickly so the more preparation you do the better you are able to make a sound judgment quickly. And since you have done your research you should be empowered to let a car you are interested in pass because you know there are many other options available.
Step 9: Purchasing a Used Car
Once everything has been agreed upon you are now ready to sign on the dotted line. Congratulations! But your job is not done. Make sure to get a copy of the contract, the title (pink slip) to the car and any other documentation on the car that the dealer has available. Chances are you will be selling this car in a couple of years and now that you have gone through the process of purchasing a used car you understand the importance of keeping all of the car’s documentation on file.
Step 10: Owning a Used Car
Owning a used car is much like owning a new car; sometimes even better. A used car costs less than a new car and while the used car may not have all of the new features that a new car has you have the benefit of having access to research detailing how the used car has actually performed over time.
Like with a new car you should get the oil changed in accordance with the manufacturer’s suggestions, bring the car in for tune-ups so that your engine will run more efficiently and drive it responsibly. Whenever you bring your car in for work or to get smog checks make sure to keep all of this information on file so that when you go to resell it you will have the proper documentation available to give to the next owner.
Most importantly, enjoy your new car!