Guide to Buying a Used Car
In the market for a used car? Buying a new vehicle can seem like a pain, but it can be an enjoyable and worthwhile process when you approach it with confidence and a bit of advanced planning. Focus on the key points in this used car buying guide to make the process less stressful, and walk away knowing you got the best car for your money.
How Much Should I Spend on a Used Car?
The cardinal rule of car budgets is the 20/4/10 rule. It’s simple: First, you should make a downpayment of at least 20%. Second, you should try and find a car that is no more than four years old. And most importantly, you should not let the total costs of owning that car exceed 10% of your pre-tax income.
Max and Sara are both working professionals and make $100,000 combined. They have saved up $3,000 so far for their next shared vehicle. Ideally, Max and Sara should look for a 2015 model or newer that costs less than $833 per month including insurance and maintenance costs. If they take out a 36-month loan of $25,000 or less, they can reasonably expect to stay under $833 per month with insurance and maintenance costs. If they’d like to look for a car in this price range, they should probably save a bit more money if they can, since $3,000 only follows the 20/4/10 rule if they purchased a vehicle costing $15,000 or less.
What Should I Reasonably Expect to Pay for a Used Car?
Because of the plethora of cars on the market, that’s the wrong question to ask. You need to figure out a few makes and models of vehicles you are interested in purchasing first. After you do, you can look up the Kelley Blue Book value for those vehicles and see what they’re going for in your area.
How Can I Look Up a Car’s History?
When you’re buying a used car, it’s vitally important to look up the vehicle history report, also known as the Carfax report. You want to be sure that you aren’t getting a vehicle that’s been in a serious accident or that has been stolen.
How Can I Find the Most Efficient and Reliable Car?
You have plenty of good options for efficient and reliable used cars. In general, you should look for vehicles and car brands that have a good reputation for not breaking down, and you should consider the needs of your family: A minivan isn’t a great option if you don’t have a massive gang of kids, and a pickup truck is not practical if you want to do city driving mostly.
How to Find Used Cars in Your Area
A quick google search should reveal the local dealerships who have used cars available. For many, this is safer and easier than trying to buy a car from an individual seller. It will save you time and money on paperwork, too.
How to Request a Test Drive
It’s pretty easy to do, but with some careful finessing, you can also make it work to your advantage. Call the car dealership and let them know a few of the vehicles you are interested in purchasing, and let them know the best day and time for you. It’s worth calling ahead so that you can make your visit as efficient as possible – you don’t want to show up to a dealership only to realize they no longer have a particular car available!
If possible, you should schedule all of your test drives on the same day – that way, you’ll have an easy point of comparison, and each vehicle will be fresh in your mind.
You will also have a convenient way to postpone deciding if an agent is pressuring you: You can say, “I need more time to think this over. In the meantime, I have another test drive appointment to catch!”
How to Close the Deal
It might sound silly, but it’s a good idea to practice your negotiating skills before you negotiate with a car dealership or with an individual seller. If you’re not feeling particularly assertive, you can always bring a more aggressive or confident friend, or focus on how much money you can save over time by standing your ground.