Tips To Get Value For Money On Used Cars
New cars are recording highs of all time. With an average of new cars exceeding 38000$ price tag. For car buyers with tight budgets, used cars can be a good alternative.
On average a person can save up to 23% by purchasing a one-year-old car of the same car’s new version. Those who are willing to buy a three-year-old version can save up to 38.2%. whereas those who go for a five-year-old version can save up to 50%.
Finding the right car at the right price is difficult. Despite cost-saving, buyers feel risky to buy cars. Because of the uncertainty of vehicle condition and lengthy buying processes.
Here are 8 tips to help you buy a used car.
1. Setting up a budget
Yet, a used car can save you money, but a car is a huge expense. That is why it is important to set a limit for buying a car. It is not wise to get in trouble to find the ideal car you want.
Setting up a budget will give you an idea of how much you have for buying a used vehicle after all your other expenses. If you plan on getting a loan, check your monthly expenses to see how much you can spend.
Your car loan installment and other car-related expenses such as gas and insurance should not exceed 15% of your monthly expenses.
If you are paying in cash, determine how much money you are willing to put down. Be familiar with your kelly’s book value and see how much similar used cars sell to know your car’s actual price.
2. Financing options
You should go to banks or financial institutions to get pre-approved for a loan. even if you plan on getting an auto loan from a dealer. Having a pre-approval option will help to negotiate the dealer’s rate.
Most banks provide loans for vehicles that are less than a period of 5 years. so, if you are planning to buy on finance, look for newer vehicles.
Your credit rate impacts the interest rate. Having a credit score above 680 will make a large difference. If you don’t have a good credit rate, first focus on increasing that.
When selecting the term of your car loan, always prefer a short-term loan. A long period of loan might seem appealing due to the small number of installments. But it will cost you a higher interest rate.
3. Know your needs
You should determine your needs before starting the car buying process. You must know why you need the car for a better purchase decision. Here are some questions you should analyze before buying a vehicle.
Why are you buying a car? Do you need a family car or for your job commuting?
What kind of features do you need? Do you want an automatic one or one with both manual and automatic features?
Do you want an electric car or a fuel-efficient car? Do you need a car on diesel or on petrol?
How long do you think about keeping the car?
4. Research for car
The Internet has made everything very clear and convenient. There are tons of sites available on Google or other search engines. where you can find information related to used cars.
These sites help you to compare prices, check information related to warranties, the history of the car, its condition, etc.
It will help to get information related to dealerships where you can visit and buy. These websites give a variety of options to your needs. Some popular sites are autotrader, cars.com autolist and autotempest .
5. Go window shopping
Before buying a vehicle go window shopping. visit various dealerships to get information about different models to make your decision easy. To find the right car it’s better to do little research.
Window shopping will let you know about the model history. it will narrow down your car search and make your buying process easy.
6. Best time to grab deals
Certain times of years let you save more on used car deals. Year-endings are the best time to grab deals.
In the months of November and December, there are more trade-ins buyers take advantage of end sales. New models of cars are being ejected after these dealers usually clear up their old stock to make space for new models.
You could find deals on thanksgiving and veterans day to save more on used cars. you can find any deals at any time of year but you have to spend some time on research and finding deals.
7. Choose between the dealer or private seller
There are two options for buying used cars either from a dealer or private seller. Car search engines or sites like craigslist can be used to find private sellers. Both dealers and private sellers have their own pros and cons.
Advantages of dealership
Auto Loan options- car dealerships have their own system of financing, from where one can get a loan. you can get your loan pre-approved from banks or credit unions. Going through dealership financing options you can save some time in paperwork.
Paperwork — if going through the dealership. All your paperwork related to car and finance is supervised by the dealership. All finance-related documents, title transfer, invoice of sale, and registration are managed by the dealership.
Trade-ins and warranty: dealerships will look into all paperwork and adjust your trade-ins value in down payment. if you are going through the option of trade-in. The dealership gives warranty options. you have to do some research to find what is best suitable for you.
Disadvantages of car dealerships.
Higher rates: Dealers have higher prices as compared to private sellers. They cover their costs at higher prices. They are more profit-driven than private sellers.
Extras: dealers insist or force used car buyers to purchase sales bundles with cars. That includes an extra warranty, cleaning supplies, etc. Dealers make huge profits on these so they pressure buyers.
Advantages of private sellers.
Lower prices: the prices are much lower as compared to dealerships. because they don’t cover any of their costs.
Negotiation: you can negotiate prices with private sellers. because most dealerships operate with a rule of no negotiation. Private sellers can provide room for negotiation because they are not profit-driven.
Disadvantages of private sellers
No warranty: these come with no warranty. if any issue comes after the purchase they are not accountable for that or possible they can’t take it back.
No paperwork: they don’t handle any paperwork. You need to visit the DMV for the registration process and title transfer.
8. Vehicle history check and VIN check.
A vehicle history check is necessary. Because it will help in knowing any problems which can arise in the future.
A history report like CARFAX or auto check will provide a vehicle’s history. This report will include the number of previous owners. if the car has been in an accident and maintenance record etc.
Some online research tools like Isee cars provide free VIN check reports with that you can also get CARFAX reports.
Be Cautious through the process of the car buying process.
Don’t agree on the price given by the dealer and private seller.
Go for negotiation. When buying from a private seller check for everything that comes with that ( manual, receipts, car cover, etc).
When buying from a car dealership, avoid extras that can cost you on your budget.
These are the little things which you have to keep in mind when buying a used car.
With little research and tactics, you can find your right car.
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