At the risk of offending new car buyers, used car shoppers are smarter when it comes to saving money. A new car can lose up to 20 percent of its value the minute it's driven off a dealer's lot. For a new car buyer, that's money right down the drain. With a used vehicle, that depreciation has already happened - to the previous owner.
While buying a used car means saving money upfront, you sacrifice some peace of mind. Used cars don't come with the same warranties as new cars. If you're not careful when buying, you may drive off in a giant money pit.
Buying a car doesn't necessarily mean giving up on reliability. By taking your time, doing your research, and sticking to your budget, you can get a used car that will make you happy and save you money.
Finding the Right Used Car
You can only buy a new car from franchise car dealers,but used car buyers have more options. They can buy from a dealer, or from the guy down the street. With so many options, it pays to cast a wide net. Most used car listings are available online, so it's easy to find the right car from the comfort of your couch.
Too many options can be overwhelming, so it's important to first have an idea of what you want and need from a used car. Think about how much you can afford to spend, how much space you need, the performance you want, the kind of fuel economy you'd like to get and features that are essential for you.
Used Car Budgets
Selecting a used car involvesfitting it in your budget. Newer cars and cars with low mileage cost more than older cars with more mileage. Playing the mileage game can help you get into the car you want, but there can be downsides to a less-expensive, higher-mileage car. The more mileage on a car, the more likely it will soon need repairs.
Certified Pre-Owned Cars vs. Used Cars
You also need to decide if you want to go with a Certified Pre-Owned (CPO) car or uncertified. CPO cars are used cars that the manufacturer has bought back and inspected. The manufacturer usually offers additional warranty coverage on these cars, and sometimes offers financing and special offers. A CPO is as close to buying a new car as you can get when shopping used. All of those CPO extras come at a cost. Still, the extra peace of mind a CPO car offers might be worthwhile.
Inspecting a Used Car
Used cars don't have the same guarantees that new cars do, so you have to protect yourself. Check the specs first and ask to see documentation for things like regular maintenance and repairs. The National Highway Traffic Safety Administration keeps a database of vehicle recalls. Check it to see if the car you're thinking about buying has any recalls. If it does, don't buy it until the seller can prove that the recall has been addressed.
Get Used Car Financing
Most people finance their used car purchase. If you're buying from a used car dealer, you may be able to get financing there, but the loan the dealer offers may not be the best deal. Before you buy, see what kind of loan terms you qualify for from different banks and credit unions. If you're buying a used car from an individual, you can use those loans to make the purchase. If you're buying from a dealer, you can compare their loan terms to the ones you already have and pick the best deal.
Used Car Warranties
Many used car dealers offer extended warranties. Even private purchased vehicles can get a warranty from a warranty company. Most consumer advocates recommend against getting an extended warranty. Extended warranties can also be expensive, and many are restrictive. When you need them, they may not cover you. Even dealer warranties may not cover needed repairs. If you decide you want an extended warranty make sure you read the fine print and understand exactly what is and isn't covered.