How to Buy a Used Car

Would you like to save thousands or hundreds of dollars the next time you decide to purchase your next car? By choosing a used vehicle instead of a new one, you will let someone else absorb the steep depreciation that new cars suffer the moment they drive off the dealer lot. So, if that the new car smell isn’t something you’re need in your life right now, read on to learn some steps on how to buy a used car. 

Of course, buying a used car is not without risk. You won’t have the new car warranty, and most used cars are sold “as is” with no guarantee of their condition.  That means, if you don’t do your homework, your used dream car can become an expensive nightmare. Many new car buyers don’t buy used cars because they say, “you’re just buying someone else’s problems.” That is true to a certain extent, but if you do your research, you’ll minimize the risk of making a costly error and laugh all the way to the bank. 

The changing automotive market is providing new opportunities for used car buyers to find gently used vehicles with factory warranty coverage. Increases in the pace of new car leasing have provided a steady stream of relatively young, well-cared-for cars coming into the used market when the leases expire. Many of the off-lease cars receive thorough dealer inspections and a used car warranty as part of manufacturer certified used car programs. You can learn more below.

Finding the Right Used Car

Unlike new cars that have to be purchased through franchised new car dealers, buyers of used cars have a variety of options. They can buy from new car dealers, independent used car dealers, or private parties.Today as you know, you don’t have to drive from dealer to dealer, as most used cars are listed online. Ebay Motors, TrueCar, Cars.com , and Carvana.com to name a few. 

With Carvana, you shop, review, buy & delivered with a 7 day test drive period.  

With so many choices, making a decision can be daunting. Do a little self inventory to determine what you want, what you need and what you can afford. Think about your lifestyle – how many people do you carry, how do you spend your weekends, where do you park? Do you need all-wheel drive for inclement weather? Does high fuel mileage or safety top your wish list?

 Also consider what options you want or need. Buying a used car is a great way to get high-end options, such as navigation systems, as they don’t add nearly as much to the cost of a used car as they do to new cars. You can use ConsumerReports.org to see how your finalists compare to one another.

 As you might expect, the older the car is and the higher its mileage, the less expensive it will be to buy. But the downside is that the wear and tear that it has suffered through those years and miles will lead to more repairs. You’ll want to find a balance between the initial cost and your appetite for the uncertainty of those maintenance costs. A great deal isn’t a great deal if it leaves you stranded on the side of the road, unable to get to work.

On the flip side, a younger, lower-mileage model that is highly rated might not save you much money compared to buying a new car. Cars depreciate at different rates, and finding the sweet spot on that depreciation curve involves some research. If you are planning to take a loan out to finance your new car purchase, you’ll want to get pre-approved by a credit union, bank, or finance company before you start shopping. A dealer might be able to beat your pre-approved deal, but unless you can show that you’ve done your research, they will not have any reason to work for you.

What's a Certified Pre-Owned Car?

Certified Pre-Owned cars are typically young, low-mileage used cars that are available from franchised new car dealers. Often they are lease returns, cars that have been used as loaners for service customers, or cars that have been driven by the dealership or manufacturer staff. The CPO vehicles are inspected by the dealer and are frequently sold with warranty coverage from the manufacturer. Unlike most pre-owned vehicles, there are occasional special used car financing deals available on certified cars. 

Buying a certified used car is like blending the new and used car purchase experiences. You’ll pay more for a CPO car than a non-certified car, but you’ll generally get a warranty that can make your total cost of ownership more predictable.

Finding the Right Used Car Seller

Unlike new cars that have to be sold by franchised new car dealers, just about anyone who has a used car can sell a used car. You can buy from dealers or private party sellers. If you’re wary of the process, it’s probably best to work with a reputable dealer. You’ll pay more, as you have to pay the salesperson’s commission, plus a portion of the dealership’s overhead, but a dealer will likely take care of all the paperwork and either register the car for you or provide a temporary registration.

Dealers are also subject to a range of state and federal consumer protection rules that don’t apply to private party sellers. Since selling cars is what dealers do all day long, they’re probably more familiar with the taxes you might have to pay, as well as any other requirements, like emissions testing, that you are subject to. 

You don’t have to pay for any of the overhead costs when you buy from a private seller, but the transaction has a bit more risk. While the price should be cheaper from a private party, they will often have an emotional attachment and think that the car is worth more than it is. You’ll have to be a good negotiator, or have the courage to just walk away if the deal doesn’t feel right. 

With a private party sale, you will be responsible for doing the proper DMV paperwork to complete the deal. Some consumer advocates suggest meeting the seller at the DMV and completing the paperwork with the guidance of their staff.  Unlike most dealers, the Better Business Bureau doesn’t rate private sellers, so you will need to try and get the best evaluation you can of their honesty before you hand over your money.  Ebay has ratings of their sellers, look up private sellers on Google, as to contact past customers of the seller, ask questions about the vehicle and trust your instinct.  While the majority are just folks trying to sell their cars, arming yourself with information gives you a foundation of knowledge to spot tricksters. 

Naturally, sellers of used cars want to get the most money they can, just as you want to pay as little as you can. You’ll want to look at the used values available from Kelly Blue Book or other online resources, and be prepared to hold your ground if you don’t think the price is right.  Don’t agree to any proposal until you see it in writing. 

Be especially careful of buy here, pay here used car dealers. They make most of their money financing used car purchases, and the loans they make generally don’t have consumer-friendly terms. 

Inspecting a Used Car

Used cars come with histories. Some cars have been driven by the proverbial grandma to church on Sundays, but others may have lived a harder life. It’s up to you to find out as much as you can about any used car you are considering, otherwise you will be buying someone else’s problems.

You should request all of the documents that the seller has to prove that the car was maintained properly, and then you should enter the vehicle identification number into the National Highway Traffic Safety Administration’s SafeCar.gov website,  to find out if there are any safety-related recalls on the vehicle. If there are, you’ll want proof from the seller that the recall issues were taken care of. 

To get an idea if the car has ever been involved in a serious accident, buyers can use services such as CarFax, who also now have a car shop section as well.  The reports cost about $40, but that is cheap insurance to help you avoid a major financial mistake. A Carfax report can also let you know if the car has a clear title, if the mileage on the odometer is accurate and what repairs and maintenance has been done, and how many previous owners the car has had. 

Even after you’ve done all this research, it is still necessary to take the car on a test drive and have it thoroughly inspected by a qualified, independent mechanic. Not all problems show up on a vehicle history report, and damage may be so recent that it hasn’t yet made it onto the report.Sellers might try to convince you that you don’t need to take it to be inspected, but you should do so even with a certified used car. If a seller refuses to allow you to get an inspection, run, don’t walk away from the deal. 

There are lots of ways to avoid buying a lemon, but common sense is a good guide. You don’t have to be an expert to see paint that doesn’t match, or get a whiff of mold in a flood-damaged car. Bottom line: If it doesn’t sound, look, or feel right, it is time to look for another deal. 

Enjoy Your New-To-You Ride a Used Car

You’re almost done. The last steps that you’ll need to finish before you hit the road are ensuring that the vehicle is properly registered and insured. In some states, you’ll need to get the vehicle inspected, get its emissions checked, and/or get its mileage verified before you can register it. Take your bill of sale, loan documents, the car’s title, proof of address (such as a utility bill), and at least one form of government-issued ID with you when you go to the DMV. 

Now you get to show off to your friends. Be kind to the ones who bought new cars; they have no idea how much money you saved by buying the right used car. 

If you have any questions about your insurance, call Chambliss Premier Insurance Services; 888.576.5296, or email ClientCare@ChamblissInasurance.com.  We have the experience to locate you the best coverage and value for your Home, Auto, Business Insurance, Life Insurance or Medicare Supplement.  Visit or website: Chambliss Premier Insurance, or www.ChamblissInsurance.com to investigate us J.

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