Buying a Used Car: Step by Step Guide
Car purchase might be one of the largest investments you make after buying a house. There are numerous options available when you want to buy a vehicle, starting from purchasing a brand new one, buying a used vehicle or leasing a car. This decision mainly depends on your budget, personal preferences, and your goal.
It is considered that the purchase of a used vehicle is more economical than buying a brand new car from a dealer. Therefore, more and more people commit to the option of used vehicles. This purchase can be made from people selling cars privately for cash or auto traders who also have a stock of used vehicles. According to recent studies, more than 40 million used cars change hands each year. With so many options available, finding the right vehicle might be a challenge. Therefore, the following section of the article focuses on depicting the main steps that should be taken in order to ease the buying process.
Determine your budget
Specialists say that if you are planning to take a loan to pay for a car you should never spend more than 20 percent of the income. In addition to that, it is a well-known fact that used vehicles require more attention than new ones. This attention is typically expressed in maintenance, new tires, and brakes. Furthermore, do not forget about other ownership costs such as gas and insurance. If it happens that you bought a vehicle that is out of warranty, make sure you budget some money to cover any unexpected repairs.
Design a target list of used vehicles
It is a well-known fact that Honda and Toyota produce durable vehicles and are good options when deciding on a used vehicle. However, they are going to cost a few thousand more than Ford or Kia, for instance. Thus, if you want to save money when buying a used vehicle you should consider more than just a brand. It is advised to make a list of the top three vehicles that meet your needs and the ones that fall within your budget.
In addition to that, if you want to buy a car that is less than 5 years old, you should consider the ones that are CPO. It stands for certified pre-owned. These types of vehicles have long-term warranties and are also backed up by the manufacturer and not just a dealer selling it to you. However, keep in mind that if you want to buy a CPO Mercedes Benz E class, for instance, it needs to be done at Mercedes Benz dealer.
Monitor the prices
After you have determined your wish list, it is now time to monitor the prices. It can be done in the used section of new car dealers, used vehicle retailers, and websites where people are selling cars for cash. Experts say that private party cars are going to have the lowest prices ompared to other sources, such as dealers or used car retailers. Cars that have CPO will typically cost the most but they have one important advantage mentioned above.
Filter your search
One important detail that should be taken into consideration is the location of the vehicle. Make sure to filter the listing of used vehicles based on your location. The vast majority of marketplaces have an option to filter cars based on a number of factors including features of the car, price, age and distance to your location. Do not underestimate this aspect, as if you find the vehicle that is located far from your location, you will have to travel a long distance. Therefore, you will get exposed to additional expenses.
Assess the car history report
Once you have found the vehicle you want, you should check its history report. This is a vital step in the buying process of used vehicles unless you buy it from close friends or relatives. The sooner you know all the problems of the vehicle, the better for you.
There are numerous online resources that give a chance to check the vehicle history report. Although, the most popular and commonly used is AutoCheck. The vehicle history report is able to depict the information in terms of whether the odometer has been rolled back or whether it has a salvage title. In order to check this type of information, you will have to use the VIN number, which stands for vehicle identification number. It should be also mentioned that the majority of dealers can provide this report for free.
Get in contact with the seller
When you have already found a vehicle and have checked its history, you should not go straight away to see it. It is recommended to contact the seller first. By doing this, you will be able to establish a relationship with the seller and get additional information about the car. It might be the case that the seller will mention something that was not in the ad. A good move will be to prepare a list of questions before getting in contact with the seller. If you are satisfied with the information received after the phone call, now it is time to see the cars and determine its condition.
Test drive the vehicle
As far as you already know, a test drive is the best way to assess the condition of the car and identify whether this is the right one for you. Make sure you schedule an appointment for the test drive during the daylight as it will make it easier to evaluate the condition of the vehicle.
Some factors to consider during a test drive are whether the car has any mechanical problems, whether the tires and brakes are in good condition and whether air conditioning works properly. It is also recommended to invite a professional mechanic for the purpose of checking the car. He will be able to spot some problems that a regular person might miss. Do not forget about service records that show whether a vehicle had scheduled maintenance performed on time.
Negotiate the price
This is a very important part of the buying process of the used vehicle. You should not accept the initial price straight away. Consider any defects that you or a mechanic have found. If such exist, they are a good reason to ask for a discount. Generally, private paries selling cars for cash will accept a reasonable price decrease, as most of them want to get rid of the car as soon as possible. You should keep in mind that a person on the other side most probably dislikes negotiating as well, therefore wants to finish this unpleasant process quickly.
Sign the paperwork and close a deal
If you buy a car from a dealer, your deal will be closed in the insurance or finance office. Most probably, you will be also offered additional services such as extended warranty, anti-theft devices or protection of fabric. However, if you buy a CPO vehicle, there is no need to consider an extended warranty. Take a close look at the contract and make sure that it does not contain any hidden costs. Generally, a contract will include the price of the vehicle, documentation fee, license fees, and sales tax.
The process of buying a vehicle from a private party is a bit more complicated. You should ensure that the seller transfers the title and registration to you properly. It is essential to close the deal correctly for the purpose of avoiding any after-sale difficulties. Whether the car is bought from a private party or a dealer, make sure you drive it away with insurance. When all the paperwork is signed, it is time to celebrate a new purchase with a nice drive-thru dinner.
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