How To Buy A Used Car In 7 Easy Steps
/Before moving from Indiana, I sold my car. I was moving out to the West Coast and decided to get rid of everything that did not fit into two suitcases. Obviously the car had to go. It was completely paid off and I was excited to begin my new adventure with a fresh start and minimal baggage. I ended up moving to the Grand Canyon, then a ski resort and eventually the Bay Area with my now fiancé. All of these places were either tiny towns or had great public transit, so I ended up not needing a car.
After living without a car for ten years, we purchased a Ford Focus ST in December 2018. We still bike or use public transit to get around during the week (Nick has a motorcycle and he also uses this to commute to work occasionally), and use the car for short weekend trips. It’s been one of the best financial decisions we’ve made. If you are thinking about purchasing a used car, here is how we went about it. Hopefully it is helpful to you!
How To Buy A Used Car In Seven Easy Steps
1. Figure out how much you can afford. Keep in mind maintenance such as oil, tires, repairs and unknown things. For example, a few days ago we unexpectedly had to buy a new battery for the car. Other costs include monthly insurance, annual registration, gas, and smog testing.
2. Do your research. Carve out a day or a weekend to visit dealerships. Spend this time driving cars that appeal to you and try to understand what appeals to you and why. Then research these cars online. You can look for forums, reviews, and consumer reports. Read these reviews to learn about any known issues. All cars have some cons, but which ones are a deal breaker to you? This is good time to think through why you want to buy the car. Will you use it for daily commuting or weekend trips? Do you need a truck for your trips? How often will use it? If not that often, can you rent a car instead for the times you do need one?
3. How old should the used car be? Or should you buy a new car? Look at different model years. Often the first year has more problems, but not always, and it might be cheaper. Also note the difference between used and new. Certain cars don't have a lot of depreciation, such as Subarus and Toyotas. And when coupled with low financing rates, a warranty and the peace of mind of newness, it may make sense to spring for a new car. More often though you will save a considerable amount of money for a car that's barely used, especially given the higher build quality of newer cars.
4. How long do you anticipate you'll keep the car? Some cars depreciate very quickly such as luxury cars and German cars. if you plan to sell in a couple of years you'll have to eat a lot of depreciation. This is a great time to look at maintenance reviews. Are the cars you’re considering known for needing big repairs or maintenance procedures once they reach a certain mileage? If so, how much does it usually cost?
5. What to look for? During your test drive at various dealerships, ask to drive the car in different areas. For example the highway and regular streets. You want to make sure that the car isn't unsafe at higher speeds. As you drive, listen for any noises that the car makes. Are there odd clunks, squeaks, grinding noises? Look around, is the car clean? If they can't clean the car, what else can't they do? Does the car have any check engine lights or something similar that pops up? Look at the tires. You can use the penny trick or just see if the tires are bald. If so, this will cost additional money. Do your best to test everything. If the seller doesn't like any of this, walk away. Pro tip: Always be willing to walk away.
6. Did you have the car inspected? Before purchasing the car, pay to have it inspected. This will usually cost $100. Carfax is an option, but not always a guarantee. This inspection will grant you the peace of mind ensuring that you didn’t miss something that could cost you later.
7. How will you pay for the car? Financing is a big part of the buying process. Ensure you have enough money at least to title and register the car. If you can get favorable rates then finance the car. This is what we did! it made more sense to get a loan at a really low interest rate than to tie up our cash and buy the car outright. Always be willing to buy a cheaper, more reliable car to make the financials work for your situation.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Money & Mimosas is now enjoyed by tens of thousands of readers in over forty countries with the same dream of achieving financial freedom without living frugally.
