Maybe It’s Time to Think about Buying a Used (Instead of New) Car

I will always recommend buying a new car (when possible), but anymore, that is becoming an impossibility for most people.

New car prices are now exceeding $50K US on average.  You can find some new cars for around $30K, but by the time you factor in insurance and other costs, your new car has become a major drag on your monthly budget.

But if you take your time, you can get a good, solid used car.

You will have to do your research, don’t settle for the first one pitched to you – and you will have to physically drive it first it.

Here are four very simple thoughts for approaching the purchase of a used car. This is not comprehensive, but if taken seriously, these steps can save you a lot of grief – and a lot of money.

Secure your Financing: We will assume you don’t have $5,000 to $10,000 in a bank account waiting to be spent on a car.  First off, don’t use dealer financing unless that is absolutely the only financing you can get.  I guarantee you it will be with some of the highest interest rates you can imagine. Do your parents, roommates or other family members belong to a credit union that you could join? Do you belong to a union or trade organization that has a credit union or organization that offers car loans? Before you go looking for a car, know how you will pay for it. Get an idea of how much you can afford to spend so that you are not limited to the oldest car (with the most mileage) on the lot.

Know who is selling a car to you: Make sure you are buying a car from a reputable dealer.  Visit the lot. Physically take a look at all the cars being offered, especially the one you are interested in buying.  Beware of buying from a private party, especially from someone off Craigslist. I am not saying Don’t Do It; I am merely saying to be cautious. Dealers are required to fully disclose all the good and bad about a car; private parties have no obligation to tell you anything.  Further, get the Vehicle Identification Number of the car you like and research it thoroughly online.  If it’s been in an accident or retitled, that information will be there online (but you have to dig).

Test Drive the Car:  I cannot stress this enough.  You need to physically get in the car and see how it drives.  You don’t need to drive it to Kansas, but you do need to check out the steering, the braking, the acceleration – and how your arse feels in the driver’s seat.   If any seller will not let you test drive the car, walk away.  

With online sellers, they promise that they can sell you a car in a matter of minutes, and that is true.  The problem is, you will be buying a car sight unseen, and if, when it arrives, it is not what you want, you are stuck with it, no matter what their money-back-guaranteed promises are. Buying a car online is not like buy a pizza online.  If it stinks, you can always throw the pizza out and start over, but if your ‘new’ car stinks, you could be on the hook for at least a couple-hundred dollars, if not the entire purchase.

Secure Your Insurance: Sometimes you can do this before you purchase the car and sometimes, insurance agents will not talk to you until you have the title.  Still, you will need to have insurance before you can drive it off the lot, but after the car is yours, go back and refine your policy. You will be required the carry liability insurance (which covers damage you cause) but you should also consider having comprehensive, collision and uninsured motorist insurance.

Often in insurance commercials, you will hear how they can lower your rate.  Usually, they do that by adjusting what is covered, not by providing you with a full array of insurance. With a new car, you should always at least have comprehensive (covers replacements costs) in addition to liability. 

The trick here is, as with any major purchase, to take your time, breathe, do your research, don’t succumb to sales pressure, and reach out for help if needed.

And I am here to help.  Honest.

I will continue to write about new cars – Both cheap and expensive cars – but I do want to hear from you about what you like me to cover.  Anything car-related is fair game. 

Until then, Happy Motoring.