10 Tips for Buying Used Cars

It almost never makes financial sense to buy a new car, unless you’re a millionaire and can take the depreciation. Get yourself a quality 2 to 4 year old used vehicle, and avoid the massive hit of depreciation that vehicles face in the first few years of ownership. Here are some tips to buy a great used car.

  1. Head on over to any popular car-estimation price site to figure out what an appropriate price for the vehicle you’re considering. Most banks use NADA for calculations on financing.
  2. Don’t trade in your old car. Dealers will usually only pay wholesale prices when you trade in your vehicle. Rather sell it in the classifieds and get a better price. This way your existing car won’t have to be part of the negotiation.
  3. Plan on selling your existing car? Check out Kelly Blue Book to make sure you’re getting a fair price.
  4. Minimize your financing. If you can afford to pay cash for your next vehicle, do so! Otherwise get as short financing as you can possibly afford. The quicker you pay off your car, the less interest you have to pay.
  5. After you have finished the negotiation, make the dealer pull a Carfax History Report. Don’t get suckered into paying for a Carfax report yourself. This way you’ll know if the vehicle had any major accidents or problems.
  6. Make sure that the vehicle has had a fresh oil change, if it hasn’t, ask for one for free. Be sure to check the exhaust for excessive black residue around the opening, if this is the case, the vehicle might be burning oil!
  7. Once you have the best deal negotiated that you can, tell the salesman that you’ve got just one more vehicle that you want to check out. If they let you leave, they’ve probably given you the best deal you’re going to get. Otherwise they’ll try to sweeten the deal. Drive around town for a bit and come back after you leave.
  8. Apply from your financing before you ever step onto a car-lot. Finance your bank from the bank, this way all you have to negotiate with the dealer about is the up-front price of the vehicle. Consider checking around a few banks to see what you can get the best rate for.
  9. Check the insurance before hand. How much would your new vehicle cost to insure? Can you afford it? Make sure you get the best price on insurance by shopping online.
  10. Don’t leave anything out of your old car. After you get rid of your old vehicle, don’t leave anything in there, chances are you won’t get it back. Check your CD player, your glove compartment, your visors, garage door openers, trunk, and other compartments!