With the technology available today, buying a used vehicle has never been easier. That’s what all the web-based vehicle listing services want you to think! The truth is that buying a used car can be time consuming and stress inducing. Let’s look at a few techniques, tools, and tactics to make the process easier, more enjoyable, and to get you the best deal possible. The main points to buying a used vehicle include getting a great price; financing the purchase; warranties; and trading in your current car.
Negotiating a Great Price on a Used Vehicle
This is an area where technology really does help you a ton. There are many websites where you can determine a car’s value and look at a vast array of cars that are currently for sale. I believe the two easiest and best sources for quickly determining the value are Kelly Blue Book and Edmunds. I recommend printing those values and if you think it’s to your advantage in negotiating bring them with you when you are viewing the vehicle. It helps to also verify if you believe the values given are realistic and appropriate by seeing what the asking price is for that type of vehicle in your local area. I personally use True Car and Autotrader. You can also use True Car to quickly get firm asking prices from dealers and they may offer discounts through the internet.
One technique that can work to your advantage as well is to search for your vehicle in another location. Perhaps a nearby city or even another state. This will give you a good idea of whether it could be worth your while to make the purchase elsewhere. Some major cities will have higher prices and some may have higher prices for certain types of vehicles. For example, we live in Colorado so a 4×4 is usually going to get a premium here. Most dealers will match, or beat, another dealer so whatever data you can bring to the table to help your case doesn’t hurt. Remember, the easiest negotiation tactic is the simply ask. So, if you do like a vehicle but feel it’s more than you’re willing to pay then just ask for a lower price and see what they say. Be prepared to leave if the deals doesn’t work. Be firm on what you need on your end to make a deal happen. The dealer will make it sound like the vehicle you want is going to fly off the shelf and they can’t keep cars in the lot. Go take a look at their lot on a Tuesday morning and see the truth to that statement. Don’t overpay simply because you feel the fear of missing out, scarcity, or any other reason. There are millions of vehicles available so don’t fall for the tactics and if you do lose one there will be more.
Used Vehicle Financing
When it comes to buying a used vehicle I encourage you to only use cash for the purchase. You are buying a depreciating asset so each month you make a payment it’s going down in value. If you do decide to finance the purchase be sure you do your research before you ever even look at a vehicle to buy in real life. You are typically going to do best by going through a local credit union for these types of loans. If you do finance it be sure you are also aware of the risks associated. For example, if your vehicle is totaled and you owe more than it’s worth they probably aren’t going to be too sympathetic and forgive the loan. This can even be something that happens beyond your control like a hail storm that damages it so much it is declared totaled by the insurance company and they only give you a check for what it’s worth leaving you to figure out the difference. If you choose financing please also choose the shortest term you possibly can and pay it off as quickly as possible.
Used Vehicle Warranties
You usually have warranty options when buying a used vehicle from a dealer or a private party. There are aftermarket warranty companies where you can go buy your own policy on a vehicle. You could also likely buy one from a car dealer. When considering a warranty I encourage you to take it slow. You do not have to buy it when you buy the car so I would encourage you to wait on that decision until later unless you are confident about your decision sooner. When a dealer offers you a warranty (which is typically in the closed door meeting with the finance person) always first say no and then they will typically take a huge amount off the cost to get you to buy it. If you haven’t done your research yet just tell them thank you for reviewing that with you but you are not interested. Generally, warranties are not going to be worth what you buy them for unless you have at least one major repair needed. It’s like an insurance policy essentially so do consider what expenses you predict and compare that to the cost of the warranty. Usually it’s the dealer making the money on the warranty, not you. That being said, I have used a warranty to cover a repair before (that came for free with a private party purchase) so I do see where it could come into use. Only you can decide if a warranty is right for your vehicle and your pocketbook but typically they are not worth buying.
Trading in Your Current Vehicle
I generally discourage trading in your current vehicle to a dealer. You can use Kelly Blue Book and Edmunds to research what you would get from selling to a private party versus a trade-in and see if the dollar difference is worth your investment of time in selling the vehicle on your own. Usually it’s worth your time if the vehicle is in good condition, lower in mileage, or is a vehicle you believe would sell quickly/easily to a private party. Selling it on your own does include a certain amount of time and energy but that’s the trade-off – it’s time or money. If you are leaning toward trading in your vehicle then it’s usually best to not bring up that you have a trade-in until you have already negotiated the price/terms of the replacement vehicle. This isolates the two transactions more and makes it more clear what you are willing to take for the current vehicle and what you are paying for the replacement. Be prepared with the values that you researched online in hand. You may also want to have your trade-in vehicle inspected before attempting the trade-in so you have an accurate picture of the overall condition. You may also provide that info to the dealer to evidence the condition. Just don’t get upset when they tell you what they’ll be paying you for the trade-in! Isolate that conversation as a separate negotiation and be ready to take away the trade-in if the deal isn’t right for you. If you have negotiated a great deal on the replacement then still go forward with that part of the deal though.