Many people have figured out how to go from debt-burdened to financially free, and one way they have done that is to realize that how much money one can save from buying a used car. This doesn’t mean a car that has the bumper duct-taped to the front, or one that has 250,000 miles on it. Not at all, even a gently used car that runs like new can save you almost half the cost of buying a brand-new car. That is money that can be spent in many other ways, or even saved! It can cut your car payments massively, while still giving you a great source of reliable transportation, and maybe can let you afford your “dream car” that wouldn’t otherwise be unaffordable if it were brand new.
However, you must look for the car in the right manner for it to the best deal possible. Here are 10 great tips to ensure that you are not overspending on a used car, and that you are getting the best deal possible:
Determine Which Cars Require Minimal Maintenance
When purchasing a used car check into which cars will require more or less maintenance than others. For example, smaller cars generally require less gas than larger cars. Do your research and know the vehicle you are buying. Know the costs associated with it. Remember the more money you save the more you have to spend on other things that matter in your life!
Check The Cars’ Resale Value
Know the car’s resale value. Some cars hold their value better than others based on their durability and reliability. Ensure you are getting the best resale value for your car in the future. Do your research and know which brands and models hold their resale values the longest, and at the highest percentage. This means more money in your pocket when it comes time to resell the car in the future. That way you can put more of that money towards another used car, and save the rest for something else, rather than trying to sink too much money into another car. That is money you won’t get back later!
Ensure Used Cars Are At Least ONE Year Old
The average car depreciates 25% in its first year. This means just buying last year’s model can save you 25% on the sticker price of a brand-new car! That’s a massive savings! Go for a brand 3-4 years old and save even more! Considering cars depreciate in value on average 11% just driving them off the lot there is really little point in buying a BRAND-NEW car when one a few years old can last just as long and take care of your transportation needs just as well! Save thousands, you can spend it on something else!
Be A Negotiator
Start bidding wars with the sellers or among other buyers. If “haggling” isn’t your strong suit, work on improving that skill! It can save you money, and sometimes literally $1000s of dollars. If that’s not motivation enough for you to haggle nothing will be. Get the price down low as you can to ensure you get the best possible deal. If you can’t get the seller to the price point you feel you should pay, look elsewhere. It’s OK to check out multiple companies, and tell the seller what others are advertising the car for to get them to come down to your price! Many sellers will come down to another price just to avoid losing your business! Someone will appreciate striking a good deal just to get rid of the thing!
Negotiations don’t just stop at price, you can also negotiate a warranty. Most used car sales are “as is” by default in the law, this means if it falls apart as you drive way to bad for you. However, not if the seller gives a warranty, and yes, this is a binding deal to the contract. You can agree on whatever warranty is appropriate, but I would lobby for at least 90 day warranty that covers transmission, drive shafts, axle, clutch and engine.
Negotiate List Prices MODERATELY
Be aware of offering TOO low of a price for the car which just makes the seller feel insulted and low-balled. Even if you up the price afterwards, they may not find you a serious buyer and shut you down! You don’t want to waste the opportunity to make a good deal, but you don’t want to pass up a good deal either. Start with a 10-15% off the sticker price! You can come up a little bit if the seller is unwilling to budge to the level you are starting at, but it’s a “feasible” offer. Use the weaknesses of the car to downplay its value in the seller’s mind. For example, the car as a scratch on it, it’s already got 30,000 miles on it, it’s 3 model years old, or it’s going to need some maintenance soon to run smoothly. That may get the seller to see your side and bring the price to a place you are comfortable paying.
Skip the Middle Man
It’s OK to buy a car from a private seller, too. Yes, a used car dealer guarantees the purchase a little bit better, but you pay for that in the sticker price of the car as well! If you are looking for the BEST bottom-line price, an independent seller looking to get rid of a car to someone just like yourself might be the best bet! They might be more willing to sell the car for less just to get rid of it if they don’t want it on their hands. Check places like Craigslist or Autosaver for the best deals, just be careful who you deal with and make sure they are for-real so you don’t get cheated!
Skip The Add-Ons
Sure the “little extras” in a car like a sun roof, touchscreen navigation, or leather seats are nice, but check your budget to see if they are feasible. They are not necessary to getting a car that gets you where you need to go. Remember, each “luxury” comes with a higher sticker price, which can add $100s or even $1000s to the cost of the car. If you have the budget, opt for ONE or TWO add-ons at most. What matters most to you? If you spend a lot of time in your car and have the budget, it’s OK to treat yourself to a thing or two, but don’t go overboard. It doesn’t really raise the resale value of the car, either!
Gasoline Cars Rather Than Diesel May Be Cheaper In The Long-Run
Considering that most cars using Diesel fuel are more expensive to purchase and maintain, as well as the higher price of fuel cars that use gasoline are generally cheaper by about 30% in the long-run.
Shop At Strategic Times
Many car dealerships often offer special rates and are willing to negotiate more at the end of each quarter when salesmen must sell enough cars to meet their quota or when the lot is looking to cut inventory. This is generally the ends of March, June, September, and December. Shop then to get the steepest discounts and pay the ultimate lowest price possible if you are shopping through a dealership!
Test Drive & Inspect Before Signing For The Car
Excited as you may be to drive your new purchase off into the sunset, ensure that you are covering your own behind in the case of something going wrong. Test drive the car before you buy it, and pay a qualified mechanic of YOUR choosing to come inspect the car before you sign on the dotted line. This may be the most important point of them all to ensure you don’t get stuck with a lemon. All may look good from the outside, but what a qualified mechanic can find on the inside may be totally different. It’s worth the fee for a mechanic to look at rather than owe $1000s in repairs weeks or months after you bought a car that YOU thought was a steal! You may also suggest negotiate the price of the mechanics fee into the price of the car. If you end up buying the car, ask the seller to deduct the price of the mechanic from the purchase price.
Always remember to shop around for the best deal! Compare and analyze data, and look to find the best deal. You can never be too safe when making a large purchase such as a car, whether its new or used. Once you do find that perfect choice the extra effort will be worth it. It will be homework you are GLAD you did!