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Buying a used car

Used car or new? What car is right for me? Where to look for used cars, what to look for when buying a used car? There are many questions you may have when it comes to used car buying process. In this article I will answer to some of these questions and hopefully, make the used car buying process easier for you. There are many essential facts you should consider before buying your next car so you won't regret your decision for a moment afterwards.

New or used car

By purchasing a used car, you can save a lot of money. A new car depreciates quickly in the first few years and after 3 years, it is worth only about 60-70% of the original price. In fact, as soon as you leave the dealership, your new vehicle is suddenly worth $1000-$2000 less. When purchasing a new car you basically are paying for its fresh "new" aroma and warranty. Yet, buying a new car does not always mean the buyer will get perfection. A new car may come with problems associated with poor design or manufacturing defects that may have been already repaired during the warranty coverage period if it's a used car. The same is true for all kinds of recalls and service campaigns. Another advantage of buying a used car is that you could buy a loaded model with all the bells and whistles that you might not be able to afford had you bought a new car.
However, buying a used car is still a bit of a gamble - there is no guarantee that the car is accident-free, has real mileage, and was properly maintained. There may be some hidden problems like a worn out automatic transmission, or engine problems that may not have been obvious when you test-drove the car. So, next you must ask yourself: Will I save money when buying a used car? How do I eliminate the risk of potential problems and is this actually possible to do? Read on to find out more information.

Taking a risk out of used car buying process

First, be prepared. Do as much research as you can. Read reviews, consumer reports, ask colleagues and friends, compare options, gather gas consumption data on the make and model you're interested in. Examine reliability ratings. Try to determine maintenance costs and upkeep, etc. Your goal should be to narrow your search to one or two models. Why? Because if you just enter a dealership without knowing what you want, chances are more likely than not that you won't be happy with your purchase. Later you may find out that it's simply not exactly what you wanted or what you can afford. Someone bought a used BMW wagon for quite a reasonable price. When he went for servicing, they discovered that the rear shock absorber was leaking. The price for the part alone was close to $1000! Finally, he sold his BMW and bought a used Camry that proved less expensive to maintain.
Another purpose to narrow your choice down to only one or two models is because when you test-drive a few different cars of the same model, it will be much easier for you to compare their condition and pick the best one. Recognizing a transmission problem during your test drive would be easier to do if you were to try a few vehicles of the same model instead of becoming confused by testing out different models.

Second, without a doubt, you should check a car's history records. This will help you to eliminate half of the vehicles from your list with potential problems. Vehicles that have been flooded or restored after serious accidents, those with rolled back odometers, heavily abused vehicles (e.g., ex-rentals), those with outstanding liens, etc., can be eliminated after simply checking the history record of the vehicle. In fact, it is not even a good idea to look into a car until you check its history.
To learn further How To check a car's history click on this link: How to check a car history by the VIN number.

Third, Don't buy based on what you've been told because it may not always be the truth. Check out the car yourself very carefully. Ask a knowledgeable person who knows about cars to help you.
Check my Illustrated used car checklist to learn what to look for in a used car.
As a final step, bring the car to the mechanic you trust for an inspection. A word of caution, NEVER give a deposit or sign a contract before the car is inspected.

Fourth, Be extremely careful when doing the paperwork. For example, if you buy from a private owner, make sure there are no registered liens against the vehicle and that the person who signs the Bill of Sale is the actual owner of the car. Check with the Vehicle Registration Authorities to make sure the car has not been stolen.
If buying from a dealer, read the warranty policy and all the papers including the fine print very carefully. If it's a "Certified" used car, you'd be wise to check exactly what items were checked off and approved because sometimes the car might have a history of an accident in the past, come with a poorly maintained engine and still be Certifiable. Do not rely on a salesperson's verbal promises. Whatever is promised, get it in details in writing. Find out if the remaining original warranty will be transferred into your name. Different manufacturers have different warranty policies. For questions about vehicle registration, change of ownership, legal aspects, etc., contact your local Vehicle Registration authorities found in my link page.

Car value and price

Don't look for cheapest car. When it comes to used cars, "best deal" doesn't mean the cheapest one. Your goal is to look for a car in good condition for reasonable price. If you choosing between relatively cheap car that might have an accident in the past or was poorly maintained, needs some repair, etc. and more expensive one that is in excellent condition, I'd without a doubt choose the more expensive one. You will simply save on repairs and will have less troubles driving it. Don't think they sell it cheap because they don't know the price or they simply want to clear their inventory. If they sell it cheap, definitely there is something wrong with it. Remember, proper price for a certain used vehicle is not the one indicated in blue or black book - they give you just an average price.

Choosing the right car

You won't get a good deal if you just browse from dealer to dealer without knowing what kind of car you are looking for. The first step - You need to decide what exactly you want. Do you need simple transportation to drive to work and back? If so, a small Sedan would suit this purpose. Do you want a car to be very economical? If so, you would want to select a car with a small engine. Don't expect to find a V6 or V8 engine or 4WD truck if you are looking for something really affordable. Are icy roads common in your area? If this is the case, then you need a car with ABS. If you want to use your car to tow a trailer, then you will have to consider a car with more powerful engine. Once you've decided on what type of car is best suited for you or your family members, and you know what you want, check out the market, see what models are available, and see what fits into the price you can afford. Following this you will be able to narrow your search to just a few models. Then compare the reliability rating and read more reviews. Don't forget to check insurance rates, get the quote before buying a car.

Making phone calls

It may be a good idea to take the time to make phone calls and enquire to confirm all vehicle information that is important to you: mileage, color, transmission, Air conditioning, ABS or for any other options that may be in your interest. You may find a car to suit your purpose but it may not have all the essentials you really need. For example, you may find a car without air conditioning (A/C) but it will meet your needs in all other aspects. Similarly, you may find a car that is a two-door but you have a family of four and it would be much more suitable if your purchase was a four-door.
Who is the Owner? How long has she/he owned this car, and how many owners were there before of this same car?
Answers like: 'This is a friend of mine's car', or 'I bought it a couple of months ago' may indicate something suspicious. You need to deal with the actual vehicle owners and he/she has to sign the bill of sale. If one sells the car after just a few months, this may indicate that this car has a problem or the seller is in the 'curbsider' business.
Did the car have any accidents, major repairs done? Where has it been serviced and are there any records available for you to review?
Don't expect the seller to provide you with complete information. He/she may be unaware about previous accidents or other problems. Refer to the vehicle history report and the result of mechanical inspection. I wouldn't recommend buying a car after an accident or after a major repair, e.g., a re-built engine or transmission.
Is the car drivable now? Does it have any problems or concerns that need to be solved? The car may not have valid license plates or insurance or have some mechanical problem at the time you are conducting your search. Therefore you won't be able to test-drive it.
Here is the short list of questions to ask:
- When did you buy the car? How many previous owners? Current mileage?
- Any previous accidents? Major repairs? Any repair needed now?
- What's the mechanical condition? Any concerns?
- General condition of the car? Interior? Exterior?
- Any rust? Scratches? Any other damages?
- Where the car has been serviced? Are the service records available?
- What is the reason for selling the car?
- Any liens?

Do's and Don'ts when buying a Used Car

Do Check a used car history report This does not give you a 100% warranty that the car is OK, but may save you some money if it will show you some bad records, for example, if the car was written off after an accident or has had an odometer rolled back.
Do ask someone knowledgeable to inspect the car for you; it may save you a lot of money.
Don't buy a car after a serious accident - especially following a frontal collision. You wouldn't believe how many possible problems may arise later as a result of an accident.
Don't buy a car as soon as you see it. Take your time, test drive the car as long as you can. For example, some problems may only be caught when the engine is cold while other problems may only be discovered when cruising at highway speeds, etc.
Don't base your decision on what you have been told. "One Owner, highway driven" in fact, may be an ex-rental, heavily abused vehicle.
Don't buy a car if you have reservations or hesitate for one reason or another…if you don't have a good 'gut' feeling about it. If the engine seems too noisy or works as if it is in rough shape and sounds heavy, the transmission shifts harshly, some works needs to be done, something seems to be wrong with the papers, etc. - move on.
Don't buy a car if it needs some "minor" repairs. Often this results in spending big bucks for repairs that never seem to end.
Don't buy a flooded car; it may look good and still be drivable but later a flooded car may develop many expensive to fix problems: corrosion, electrical, electronics, wheel bearings, transmission, etc.
Don't be rude to a salesperson at the dealership. Regardless of the many stereotypes we share, many salespersons are genuinely nice people. Be persistent but not rude; treat them well and they will be willing to help you...

Evaluate Your Vehicle

Let's face it, consumers can be fickle. What was once the rage goes quickly out of vogue. The American car-buying public is notorious for wanting the trendiest vehicles with the lowest sticker prices. Take an honest look at the marketability of the car you have for sale. If it's a popular make and model, you'll probably sell your car quickly. If not, be prepared to do a little research to find the best markets for your particular car.

Remember the Chevrolet Corvair or the Ford Pinto? Those vehicles, and others that have fallen out of favor, may be next to impossible to sell unless you offer it to members of a collector's car club. Compact economy cars may be hot tickets if you happen to live around a college campus; muscle cars may sell best near a military facility; station wagons may attract an interested buyer in a bedroom community; and ragtops will sell better at the beach. Knowing your vehicle and who would be most likely to buy such a car is imperative to the successful sale of your vehicle.

Be brutally honest with yourself about the popularity and desirability of the make and model car you want to sell. Take the time to research the going rate for your car through a company such as the Kelley Blue Book. Only then will you know where and how to market your vehicle, and only then will you have realistic expectations of how much money you can get from the sale of your car.

Determine Your Asking Price

Doing a little homework is your first step in deciding your asking price. Spending a Sunday afternoon scouring the classifieds for comparable vehicles or clicking onto used car Web sites over several evenings are valuable tools to determine the going rate for your make and model of car. Once you have a range of prices for your particular model and year of car, you'll need to factor in a few other considerations:

  •     Mileage
  •     Condition
  •     Special features

Other factors that determine the selling price of a vehicle that some people do not consider are: location of the car (weather plays a big factor on the look and longevity of a vehicle); who has driven the car (young drivers are known to put hard miles on their cars); and gas mileage (more and more drivers are sensitive to this issue for both economic and environmental concerns).

If you have made major cosmetic or mechanical improvements to the car recently, be sure to boost your price accordingly. A new set of high quality tires, a rebuilt engine, a replaced transmission still under warranty, or a top-of-the-line paint job will add to the value of the car and you should be compensated for those upgrades that make your vehicle more reliable and desirable. Locate the paperwork regarding any major work and create a file of receipts (with dates) to show any potential buyers.

Once you have decided on what you plan to charge, remember to boost your figure by a few hundred dollars. That cushion will provide a bit of negotiating room between you and potential buyers.

Decide Where to Sell

Tried-and-true methods for selling a used car include hanging a "for sale" sign in the vehicle; buying a classified ad in the local newspaper; posting a sign on neighborhood bulletin boards; and trading in the car at a nearby car dealership. All those traditional approaches will have varying degrees of success―all of those methods inherently include an investment of time and energy.

Nowadays, car sellers also have some non-traditional ways to sell a used car. With the popularity of the Internet, you can now find sites that will assist you in a variety of ways to sell your vehicle. Many sites exist where buyers, usually for a small fee, can post their car's details and interested parties can contact you online for more information. One benefit from dealing with that type of posting is that you can make initial contact with potential buyers via email; from that initial contact, you can field any questions they may have and weed out any unqualified buyers prior to showing the vehicle. Companies such as Car Soup; Cars Direct and Craigs List can help streamline the sale of your car.

Other online businesses take even more of the hassle out of selling your car. Today, there are brokers that will consign your vehicle and will sell the vehicle online for you for a fee. A note of caution: Be sure you are dealing with a reputable company by researching the company before you sign a contract with them.

Another online option is to offer your car for sale to the highest bidder. A number of online auction houses, such as Ebay now include car divisions on their sites. Again, before committing to any agreements with the company, be sure to read carefully all rules and stipulations.

If you are especially eager to be rid of a car, consider donating your car to a legitimate non-profit organization. Many of these groups can be found via the Internet or in your local phone book; one source is Donate a Car. Be sure to read and understand the current tax deduction guidelines; many tax code rules change from year to year.

Detail Your Vehicle

our investment in a little car maintenance and cleanup can reap big dividends when selling a car. Some cosmetic changes can make the difference in making a great first impression on potential car buyers, and can vastly improve your chances of getting your asking price. Minor maintenance that will cost you little but will enhance the appeal of your vehicle include:

  •      Wash and wax the car
  •      Tidy the interior and empty the trunk
  •      Clean the carpet and upholstery
  •      Shine up the tires and hubcaps

To take this preparation a few steps further you can make any minor repairs, throw in an inexpensive oil change, make sure the tire pressure is at the recommended level, and hang up an air freshener.

It is sometimes helpful to ask a friend or relative to take the car for a test drive. Many times they are able to hear or see something that you might not notice because you have become accustomed to your own car's idiosyncrasies.

Additional steps to make you look like a conscience car owner are compiling all the car's service and parts records in a folder in the glove compartment, and considering taking your car in to your regular car mechanic to have them provide a statement of condition or diagnostic results.

Show it Off

If you have a sign posted on your vehicle, be sure to park your car in the areas that may generate the most interest―places that are appealing to those who would most be interested in your particular make and model.

Remember too, that potential buyers are going to be evaluating you as well as your vehicle. Car buyers may shy away if you come across as a high-pressure car salesman, so try to present yourself as friendly and honest. If you present yourself (both in appearance and demeanor) as a responsible and detail-oriented person, that impression will help assure possible buyers that you have carefully maintained your car.

For most methods of selling a used car, you will need to arrange and keep appointments where potential buyers can view and test drive your vehicle. Many people can find this process a bit intimidating―be sure to try to put potential buyers at ease, and answer any questions to the best of your ability. For your own protection, you should verify that anyone who will be driving your car is in possession of a valid driver's license issued in your state, and make sure your insurance coverage will cover other drivers. To safeguard your property, it is always best to accompany the driver. During the drive, you can answer any of their questions as you travel along the highway.

If you are anxious about showing off your car alone, there is nothing wrong with having a friend or relative drive along, just be sure that you address any concerns or questions on your own―you are the expert on this vehicle.

Close the Deal

Only you can decide how payment will be paid: by personal check; cash only; or cashier's check. It is always good form to mention your payment preference while setting up an appointment to see the car. In that way, if the buyer simply falls in love with your car on the spot, you will be able to finalize the transaction quickly―without any time lapse, confusion or embarrassment on the part of either party.

If it hasn't been discussed before, now is the time to state your terms for the price of the car. Any negotiations should take place at this time. If you have given yourself a little cushion on your asking price, you can let the interested party take the lead. If they make a reasonable offer, be prepared to say yes. The art of negotiation is not easy for many people; take your time and listen to any offer. Counter offers by both the buyer and the seller are expected at this time in the process. Know beforehand what your bottom line amount is and don't get caught up in thinking that this will be the only person interested in buying your car. Should a potential buyer offer a ridiculously low amount, be prepared to thank them for their time and move along, but be sure to give them a card with your name and telephone number. After a cooling off period, they may reconsider and make a higher offer.

During this part of the deal is also the time to convey whether you will provide the buyer with any sort of warranty, or if the vehicle will be sold "as is." If the car is to be sold as is, be sure to write up a statement to that effect and have the buyer sign and date it for your records.

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