Buying used is a great way to get behind the wheel of a vehicle without the high cost of current year models. And as vehicle prices have reached new highs in recent months due to the combination of pandemic and shortage of semiconductorsbuying used can help you save money.
Buying second-hand has not been immune to rising prices. The average cost of a used vehicle in November 2021 was 28% higher than in 2020, according to CNET, a property of Red Ventures. But buying used is always cheaper than buying new. So as we step into spring car buying seasonkeep these tips in mind to get the best deal.
8 tips to follow when buying a used car
When buy a used carfollow these tips to walk away with the best deal.
Tip 1: Have a realistic budget
The best way to save money when it comes to a major purchase is to be honest with how much you can afford. When it comes to buying a used car, it’s no different.
Not only do you need to be aware of the monthly financial cost, but also the additional vehicle costs that are sure to arise. Enjoy a car loan calculator before you start your vehicle search so that you have a good understanding of your budget.
Tip 2: Explore financing options
Choosing the right financing option for your vehicle is reminiscent of the experience of a find your perfect car. Lending options include banks, online lenders, and dealerships, and shopping around is essential to ensure you get the best terms and rates available. View Current Rates and Bankrate winner of the best used car lender before accepting a loan.
Tip 3: Apply for loan pre-approval
Auto loan pre-approval is when a lender tentatively approves you for a certain amount while you shop for your car. It’s not a foolproof deal, but it gives you a better idea of what you’ll be paying in interest and what you can afford.
The main benefit of loan pre-approval is that it can give you confidence that you are getting the best deal. By entering the parking lot or even entering the online dealership, you will have the comfort of knowing exactly how much you can borrow for the vehicle, and you can even take the opportunity to negotiate.
Tip 4: Trade in your old vehicle
Trading in your vehicle will save you money and worry about what to do with your old vehicle. the exchange process ranges depending on the dealership you use, but the steps are simple. This primarily requires you to understand the value of your current vehicle versus the new one.
Shop around and get quotes from multiple dealerships. You can use the estimates as bargaining power with the dealer you are buying from.
Tip 5: Make a big deposit
The larger your down payment, the less you will need to borrow and the lower your monthly payment will be. Saving up and therefore placing a large down payment will save you money while you drive. Because you’re borrowing less, you’re more likely to be approved for a loan, and you can potentially get a lower rate.
Tip 6: Consider a Certified Pre-Owned Vehicle
One way to circumvent some of the risks of buying second-hand is to buy certified pre-owned items. Commonly found at dealerships and rental companies, these vehicles carry a special seal of approval indicating that they have been approved by the manufacturer and generally have low mileage, have been properly maintained and they did not suffer an accident. These vehicles can also come with an additional vehicle warranty, ensuring long-term quality assurance.
Tip 7: Buy online
The market for buying a vehicle has changed dramatically over the past few years, and buying used is the perfect time to take advantage of the online shopping options available. Try looking outside your postcode to see if there’s a specific vehicle you’ve set your sights on, or try more futuristic options like Carvana or Vroom. If you feel more comfortable going the traditional route, always do some research online before heading to the field in person to get an idea of vehicle costs and availability.
Tip 8: Perform a detailed car inspection
Buying a used car involves additional risks. You don’t know how the previous owner handled the vehicle, and unforeseen problems could loom.
To be sure you’re not going with a stealthy repairman, inspect the vehicle and request a vehicle history report. In addition to an initial test drive, it’s wise to get an independent mechanical inspection to check for any underhood issues.
Next steps
With so many Americans looking to buy vehicles right now, it’s a good idea to prepare ahead of time to save as much money as possible. And when it comes time to buy a new vehicle, consider used options to walk away with some extra cash in your pocket.