Buying a Used Car - Part 1

(Potential savings: thousands of dollars)
Purchasing a vehicle is usually the
second largest purchase you will
make next to buying a house. However
buying a used vehicle has many benefi ts
over buying a new one.
Simply put, the price of a used car may
be fi fty percent less than a new one,
even if the used car is fairly new. This is
because the new vehicle drops in value
the moment it is driven off the dealer’s
lot. In fact, in the fi rst year alone a car
will drop in value at least twenty percent,
and will continue to drop every year
thereafter.
The used car buyer can take advantage
of a vehicle that is only a few years old,
but is mechanically and physically sound,
still looks great, and has a lower price
tag. You can get practically the same
vehicle as the latest model and save a
lot of money.
You should educate yourself and arrive
at the dealership armed with information.
The used car you have in mind should be
researched online for consumer reports,
manufacturer recalls, and blue book
price.
Online services such as AutoWeb, (www.
autoweb.com) Autobytel (www.autobytel.
com), CarsDirect (www.carsdirect.com)
and Stoneage (www.stoneage.com)
can provide quick quotes on vehicles
so that you will know how much to pay
for a used vehicle. Other web sites such
as Consumer Guide Vehicle History
Report (http://auto.consumerguide.com/
vhr/index.cfm/act/start) will provide the
vehicle history by running a check on the
Vehicle Identifi cation Number (VIN).
An important point to keep in mind is
that most dealers add about $2000 profi t
into each used car to bring it up to retail
price. This means that there is $2000 to
negotiate with between wholesale and
retail price.
Using these resources and comparing
the information gathered to local dealer
web sites and used vehicle publications
will give you a good basis for making an
educated offer on a used vehicle.
Researching Used Cars Online
With the Internet you can log onto many
web sites that provide insider information
on the automobile industry. These guides
can provide you with the trade-in value
(wholesale price) and market value
(retail price) of a used car. Some online
guides provide photographs and much
more information than one would fi nd in
a classifi ed ad.
Once you have located a vehicle that
suits your needs and budget, test-drive
it and have a thorough inspection by a
mechanic independent of the dealership.
The model year should be checked out for
any recalls or consumer concerns. The
vehicle identifi cation number (VIN) should
be checked through online services such
as CarFax (http://www.carfax.com/) or
Consumer Guide to provide a description
of prior ownership (private, rental,
salvaged, etc), specifi cations, problems,
and odometer readings. Consider all the
important questions regarding to a used
vehicle before making an offer to the
seller.
When the desired vehicle has been
located, priced online, researched for
history, and inspected mechanically,
an offer should be made to the dealer.
Typically, dealerships aim to purchase
trade-ins at $2,000 below wholesale price
so the future new owner of that vehicle
can expect at least that much room to
bargain with towards the fi nal retail price.
Start negotiations under the wholesale
price and directly with the sales manager.
Don’t deal with the salespeople.
The Used Car Test Drive
For the test drive you should plan the
driving route to take ahead of time, and
not simply drive around the dealership’s
neighborhood at the salesperson’s
direction. Before driving the vehicle,
inspect its exterior for damage or
irregularities in paint or assembly. Just
as a new car should be free of any
imperfections, a used vehicle should
be examined just as thoroughly. Record
any obvious concerns such as signs
of an accident, repainting, excessive
rust, etc. A certain degree of wear and
tear can be expected on a used car but
limits should be put on just how much is
acceptable depending on how old it is.
Regardless of appearance, a mechanic,
who is independent of the dealership,
should inspect a used vehicle before the
purchase.
If possible, all drivers and family
members should be present at the test
drive. Everyone should be comfortable
with the positioning of the controls and
seats, visibility, and overall feel of the
vehicle. Parents should note if there
is enough room for children to travel
comfortably, and if the seatbelts can be
fi tted correctly.
Try out all the controls and accessories
to ensure that they are easily accessed.
Also take time to look at luggage space
and make sure that everyday items such
as sports equipment and baby gear can
fi t in the trunk.
When starting the test drive ask the
passengers and salesperson to be quiet.
You should be concentrating only on the
sound of the engine, overall performance
of the vehicle, and the other traffi c and
signal lights around you.
Don’t let the salesperson turn up the radio
or talk incessantly, as he may be trying to
distract you or cover up suspicious and
excessive engine noises. At some point,
drive with the windows up and then down
to listen to the car more completely.
Durng the drive, you should take note of
the vehicle’s performance on a variety of
road conditions such as gravel, pavement,
residential streets, and highways. Drive
on the highway and gauge how well it
accelerates and maneuvers into traffi c,
especially if the air conditioning is on,
which may cause the vehicle to lose
power.
In a controlled setting like a deadend
road or vacant parking lot, put the
vehicle through rigorous braking tests
from light braking to sudden, emergencytype
braking combined with an evasive
tactic. Note the performance of a vehicle
equipped with ABS brakes, and try the
sudden braking test several times to get
acquainted with the pulsing sensation
on the brake pedal. When you arrive
back at the dealership, you should try
several different parking procedures to
determine blind spots and any diffi culties
in maneuverability. Try parallel parking,
backing into a space between two other
cars, and driving forwards into a spot, for
instance.
Setting a Budget when Purchasing a
Used Vehicle
When you have made the decision to
purchase a used vehicle, the excitement
can lead to premature decisions about
fi nances that can lead to a disastrous
choice. Before choosing a vehicle, you
should set a fi rm preliminary budget
and not overextend your fi nancial
boundaries.
Take a look at your monthly budget, if
you have one and make sure you take
into account other necessary expenses
such as mortgage payments, utility bills,
groceries, insurance, gas and other living
expenses.
If you are able to pay cash for a new
vehicle you will be further ahead than
most people.
Stay Tuned for Part 2 of Buying a used
car .