The used car market is one of the largest industries in the United States. More than two times more used cars were purchased in 2018 than new alone. The problem is, as easy as it may seem to simply walk on a lot and buy a used car. There are many pitfalls for the average consumer when making a purchase of this magnitude.
I’m going to help you out by providing some tips, tricks, and advice you can use to make your next used car purchase simple and easy.
In 2009 when I bought my first used car. I knew absolutely nothing about cars, and it cost me. What I ended up with was a 2002 Chevrolet Cavalier that had a busted body kit, loud droning exhaust tip, and wheels that weren’t even the same brand wrapped in half-rotted tires.
My lack of knowledge caused me to miss a lot of small details that cost me a lot of money later on down the road.
The first mistake I made was the mentality going into the purchase. I was desperate, and being desperate on a car lot is never a good thing. The salesman will sense that and have a field day with you.
The approach should be calm, cool, and collected. We are not buying a loaf of bread. This is a 1200lb hunk of metal with lots of moving parts. Not doing the necessary research will end up costing you hundreds if not thousands of dollars.
Research and Budgeting
The first thing you want to do is an overall needs assessment. Ask yourself, what kind of car do you really need? Could you get away with a 2 door coupe? Does a 4 door sedan fit your lifestyle? Or are you a bit more adventurous and need a reliable daily driver, but want to take it off the beaten path on the weekend?
Once you have your needs down. Time to move on to the wants. Wants on a used car can be tricky, because there is no way to configure a used car. You pretty much get what you get. Go into this with the most amount of flexibility possible.
Search tools found on sites like Edmunds can help you narrow down the vehicle with the options of your choice. But it will only be as reliable as the information the dealer has provided about the car. The convenience of the site will allow you to view numerous vehicles within a specific geographic location from the comfort of your home.
Now that you have an idea what kind of car you want. It is time to determine how much of that type of car you can afford. Unlike a new car, used car values have several variables to consider. Age, miles, trim level, brand reliability, and rarity all contribute to the vehicle’s value.
Below is a simple auto loan calculator. It will help give you an idea of how much car you can afford.
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At this stage, we have the type of car and how much we can afford. Now it’s time to take a deeper dive into the brand. As surprising as it may seem. All automotive brands are not cut from the same cloth when it comes to reliability, safety, and cost of ownership. Sites like the IIHS, NIHST, and J.D. Power and Associates are fantastic resources that break down overall automobile safety and reliability. More about each of those sources in a later post.
Top brands to focus on are the ones that have the best reliability with the lowest cost of ownership, obviously. But you would be surprised to know for certain years even the most reliable brand has run of bad years and models to avoid. It is the same as the most unreliable. There may be a model year that they knocked it out of the park and produced an absolute tank.
An example of this would be the 2010 Ford Fusion. It won numerous awards for reliability and affordability. You can easily find one with over 100,000 miles, and it still runs like new. Move up a few years to 2014, and you can run into a myriad of issues. In a future post, I will highlight some of the more popular brands in the U.S. and point out what make/model year you should avoid as well as what would be the most bang for your buck.
Visiting the dealer
Now for the fun part. Going to see that dream car in person. I can’t stress this next step enough. To make the best decision possible, you have to physically touch the vehicle. It’s scary, I know. But pictures and descriptions are not going to give you the full view of the car.
Test driving the vehicle is the best way to get to know your next vehicle on a more personal level. Here are a few things you should pay close attention to when checking out your car.
1.Exterior:
Examine the paint and body of the vehicle. Notice if there are any dents or significant scratches that were not repaired. Check the panels for body filler by tapping them. The sound should be light and tinny. Check for rust on the rocker panels and frame/undercarriage. Run your finger along the inside of the fenders and door jams. If you feel a line or roughness, the vehicle has been painted. Lastly, check to see if the bolts in the fenders were turned.
Check the suspension by pushing down on the vehicle. A worn suspension will bounce significantly and could be a $1000-$5000 repair.
Last but not least. Examine the tires. A good, but not foolproof method to check tire wear is the penny test. If you can see Lincoln’s head when you place the penny in the groove of the tire, it is worn to the point of replacement. Additionally, look for wear patterns by running your hand across the tire. A tire that has an uneven wear pattern could indicate a number of issues from alignment to suspension.
2. Interior:
Check out how the car smells. A car’s smell can tell you a lot about how the previous owner took care of it. Cigarette smoke is nearly impossible to remove from a vehicle. A musty or moldy smell could be an indication of water damage either from a leaky seal or flood damage. Make a note of the finishings. Are the dash panels cracked or sun-damaged? Do the gauges work properly? Are they lit up like a Christmas Tree after you start the car?
One trick of dirt lot dealers is the disconnection of the speedometer. That prevents the vehicle from recording mileage when driven, giving the car higher perceived value due to the lower miles logged.
If the car equipped with a sunroof. Make sure it operates smoothly, and the seals are good. Repairing a damaged sunroof can cost around 2,000.
3. The test drive:
The moment of truth has finally arrived. It is time now to see how the car will perform on the open road. During the test drive be mindful of the following.
Is the steering lose or have a sloppy feel? Are the breaks firm or mushy? Does the car have a lot of body roll when cornering? For manual vehicles, test the clutch. The clutch should feel light and easy to push in. If it bites at the top or is hard to press. That is a sign it needs to be replaced.
At the end of the test-drive, place newspaper or cardboard under the engine carriage to check for leaks. It may take a min or two for them to show, so go inside and start negotiating your deal. But be sure to check it before you agree to purchase.
4. Vehicle History Report:
There are two main companies that dealerships use to provide that information. CarFax and Autocheck. Edmunds will link a report by Autocheck on the listing. The dealership may also provide a report from their site as well.
Negotiating a Used Car Deal
Negotiating a car deal can feel stressful. But it doesn’t have to be. You, as a consumer, want to buy a car, and the dealer wants to sell a car. The difference and point of resistance is the price to be paid. The dealer wants to sell his used car for a maximum profit, and you want to buy a used car for the most substantial discount possible.
There is a way for both to be happy. Car dealers are in business to make money. There is no doubt about that. But if you use the following tips. You will be sure to get the best deal, and the salesmen who sold you the car will be able to take care of himself and his family.
- Do your market research.
Sites like Edmunds will show you how your vehicle of interest stacks up against similar cars in a specific geography. They mark each listing as a “great,” “good,” or “fair deal.” Knowing the market will allow you to close your salesman instead of them closing you. - Check used car trade-in values.
It will give you a good idea of how much profit a dealer may have. One thing to note, many larger dealers spend money to recondition the vehicle and complete a full service, which may include replacement of tires and brake service. That process adds to the overall cost of the car. A typical recondition of an average used car trade-in could cost around $1,000. - Don’t be afraid to walk away.
But know, a dealer won’t let you leave on their second-best number. So if there is no more resistance from the dealer’s side and they are ok with you walking away, then that is all she wrote. The deal is either at a break-even point or at a small loss.
Getting Started
Now that you know what you need to do to begin your new, used car vehicle search. Head over to Edmunds to start putting your new-found knowledge to the task. There you will be able to access vehicle and dealer reviews, get an estimated trade-in value for your car, and reach out directly to the dealer about the vehicle of your choice.