Purchasing a used car can be an overwhelming task, but with the right knowledge, you can make a wise decision. This guide on used vehicle purchase will help you navigate key steps, from evaluating the car's value to negotiating the price, ensuring you get the best deal.
1. Determine Your Budget for a Used Car
Before diving into online car listings or stepping into a dealership, it’s essential to determine how much you can afford to spend on a pre-owned vehicle. If you intend to pay in cash, evaluate how much you’re comfortable spending.
For most buyers, taking out a loan is the common approach. To understand how much you can borrow, use a monthly payment calculator to help estimate your potential loan costs.
Remember to account for additional expenses, such as car insurance, registration, and fuel costs. It’s also important to reserve funds for regular maintenance, including routine tasks like tune-ups and any unexpected repairs, which can arise sooner with used cars than new ones. While new or leased cars often come with warranties and complimentary maintenance, the upkeep of a used car is entirely your responsibility.
Set a clear budget whether it’s $10,000, $20,000, or $30,000 for your used car, and stick to it.
This target price is helpful, especially if you plan on financing. Factor in monthly loan payments alongside other financial commitments, including rent, childcare, utilities, groceries, and existing debts like student loans.
Also, don’t forget to include costs like car tax, title fees, and insurance in your budget. These can add approximately 10% to the overall price of the car, meaning a $30,000 car could end up costing closer to $33,000. If you’re financing, you’ll pay interest on this higher amount. To get the best deal on car insurance, obtain quotes from multiple providers and compare prices for the vehicles you're considering.
2. Choosing the Right Used Vehicle
Once you’ve determined your budget for a pre-owned car, the next step is finding the ideal vehicle for your needs, or at least narrowing down your options. Expanding your search to include vehicles from various model years can increase your pool of choices. While this might seem overwhelming, the good news is that with so many options available, there’s a car out there that fits your preferences, whether you’re looking for a compact SUV, a large pickup truck, a midsize sedan, or a sporty convertible (lucky you if it's the latter!).
Kelley Blue Book provides a wealth of information on all major car makes and models. From unbiased expert reviews to detailed specifications, including horsepower and vehicle dimensions (to check if it fits in your garage), all the details you need are easily accessible.
When purchasing a car, it's important to consider not only your current needs but also your future ones. For instance, if you’re planning to expand your family, now might not be the right time for a two-seat sports car. For larger families, a three-row SUV or minivan may be a better choice than a smaller two-row vehicle.
A great way to begin your search is through our Car Finder tool, which allows you to filter vehicles by category, such as trucks, crossovers, and sedans. You can even narrow your search by specific features, such as remote start or heated seats.
Be sure to read expert reviews, as vehicle features and designs can change significantly from one year to the next. Look at reviews from previous years to ensure that the car you choose has the style and features you want.
3. Finding the Price of a Used Vehicle
Once you've narrowed down your list to a specific model, such as a Ford F-150 Raptor, it’s time to research its price for your used vehicles purchase. Be sure to check for the features you want, such as a 4-wheel drive or a crew cab, when reviewing used vehicles for sale.
When buying used vehicles, consider opting for Certified Pre-Owned (CPO) cars. These certified used cars undergo a thorough inspection process to ensure they meet strict standards for condition. Certified pre owned cars are typically serviced, cleaned, and detailed to perform like new. Additionally, certified second-hand cars come with warranties, offering you peace of mind.
Although certified preowned vehicles may cost more than regular second hand cars with a warranty, they offer great value. You'll pay less compared to buying a new vehicle due to depreciation but still benefit from a car that’s been inspected, and serviced and comes with a warranty, much like a new car.
If purchasing from a private seller, unless the pre owned vehicle still has a factory warranty or you buy an aftermarket warranty, the car is likely being sold "as-is." When shopping for preowned cars, look for dealer certified pre owned options to ensure the best quality and value.
By considering certified pre owned car dealerships, you can access a range of certified used cars and pre certified used cars for peace of mind with your purchase.
4. Check Your Vehicle’s Price
If you’re planning to sell a used vehicle you currently own and use the proceeds toward your next used vehicle purchase, it’s essential to determine how much your car is worth. Using the Kelley Blue Book car value tool, you can get an accurate and fair evaluation by inputting your car’s make, model, condition, and features. Be honest about the vehicle’s condition, as potential buyers will expect to negotiate if there are noticeable imperfections like scratches or dents.
Once you know your car’s dealership trade-in value and private party value, you can decide which route to take for selling it. If you're looking for a quick and hassle-free sale, you might want to consider an Instant Cash Offer. This service works by dealerships offering you a fair price based on your car’s value, without the need for the back-and-forth of negotiations at a dealership or dealing with lowball offers from individual buyers.
5. Line Up Your Financing
Once you have your budget set and a few used vehicles in mind, it’s time to explore your financing options. While most dealers offer to finance, it’s often a good idea to explore alternatives, such as securing a loan from your bank or credit union. This way, you can compare offers and choose the best option for your situation.
If the dealer offers you a better deal, that’s great. However, getting pre approved for a loan before heading to a dealership—whether online or in person—gives you more flexibility. It prevents you from being tied to one specific sales lot or dealership and can give you an advantage when it comes time to negotiate the price.
TIP: When shopping for a pre owned vehicle at a dealership, avoid discussing financing until you know the full cost of the vehicle, including all taxes and fees. This will help ensure that you're negotiating based on the total price, not just the monthly payment.
6. Contact Sellers
Once you've found a used vehicle for sale that fits your needs and budget, it's time to reach out to the seller. Whether the car is being sold by a dealer or a private party, it's important to inquire about its availability.
For pre owned vehicles sold by an individual, ask why they are selling the car and if there are any known issues. It’s also crucial to check if the seller has the title in hand and whether it’s clean, rather than a salvage title. You should also ask to see maintenance records and confirm whether there is any outstanding loan or lien on the vehicle.
PRO TIP: To avoid potential issues, consider using Kelley Blue Book’s Private Seller Exchange. This platform provides a secure environment where the process is managed for both buyers and sellers, ensuring a legitimate transaction. It also eliminates fraud and spam by verifying contact details and using Stripe to authenticate IDs, providing peace of mind when buying certified pre owned cars or second hand cars with warranty.
While you can always buy a used car from a dealership, remember that dealer certified pre owned cars might cost a bit more than purchasing from a private seller. However, dealerships often offer additional security and support during the buying process.
7. Get a Vehicle History Report
Before finalizing your used vehicle purchase, it’s essential to check the vehicle's history. A vehicle history report, which can be obtained using the car’s vehicle identification number (VIN), provides important details about its past, including accidents, maintenance, and title status.
You can obtain these reports through services like Carrokie. If you’re purchasing from a dealer certified pre owned car dealership, they often provide these reports for free, so be sure to ask for them.
If you’re buying from a private party, obtaining a history report is crucial to avoid potential issues and help with negotiations. A vehicle history report gives you valuable insight into the car’s past and can help ensure you're making an informed decision when purchasing a pre owned vehicle or certified pre owned car.
8. Examine and Test Drive the Car
Once you’ve found a used vehicle that fits your criteria, it's time for the test drive. Be sure to stay objective and inspect the car carefully. Look for issues like balding tires, torn seats, or signs of neglect. Pay attention to any warning signs, such as a check engine light.
Before driving, check the car's comfort and adjustability. Ensure the seat fits your driving position and check for visibility. If you're planning to use a child seat or have passengers, test the space and ease of entry. If possible, bring a mechanic or trusted friend to inspect the car as well.
During the test drive, focus on the car's performance. Check acceleration, braking, steering, and handling. Be cautious of any odd vibrations or sounds, which could indicate underlying issues. A Certified Pre-Owned (CPO) car offers peace of mind, as it’s been thoroughly inspected and repaired.
If you're buying from a private seller, consider meeting at a safe, public location and bringing a friend or mechanic for support. Some dealerships may even offer to bring the car to you for a test drive, allowing you to assess it in your environment.
Lastly, don’t forget to check tech features like phone pairing and storage space.
9. Negotiate a Price
Before starting negotiations, don’t disclose your budget or preferred monthly payment until you see the full price, including all taxes and fees. Dealers often adjust the payment term to meet your budget but at the cost of a longer loan duration. Getting pre-approved for a loan gives you more negotiating power and keeps you from being influenced by the dealer's finance offers.
If trading in your old car, treat it as a separate transaction. Don’t let the dealer mix your trade-in with the new purchase, as it can complicate the negotiation and obscure your budget.
Once you agree on a price, carefully review all fees, such as "VIN etching" or "vehicle reconditioning fees." Question unnecessary charges, and ensure the car’s price reflects any cleaning and prepping costs.
10. Do the Paperwork
The final step is completing the paperwork. Sign the sales contract, and if financing, review the loan documents. For private sales, get a bill of sale and confirm the title and registration are accurate. Add the car to your insurance policy before driving it away.
What’s the Right Used Car for You?
Choosing the right used car depends on your needs, budget, and preferences. Consider the following factors:
- Essential features vs. luxuries: What features are necessary, and which are simply a bonus?
- Car make/model: Is it a reliable brand with a good reputation?
- Price: Does it fit within your budget?
- Fuel economy: How much will you spend on gas?
- Safety rating: Is it crash-tested and safe for you and your passengers?
- Size: Does it suit your family or lifestyle needs?
- Driving experience: Does it feel comfortable and drive well?
- Resale value: Will the car hold its value in the future?
Where should you look for a pre-owned vehicle?
Check various resources for used cars near you:
- Online listings: Websites like AutoTrader or Craigslist.
- Consumer reports: They offer insights into the best used cars.
- Classified sections: Local newspapers.
- Print buying guides: Helpful for research on used cars.
- Public auctions: Great deals, but inspect thoroughly.
- Local dealerships: They frequently get new stock.
Conclusion
By following these crucial steps for a used vehicle, including thorough research, a proper test drive, and careful negotiation, you can confidently secure a car that fits your needs and budget. Don’t rush—take your time to ensure a smart investment and get help from Carrookie!
FAQ | Used Vehichle Purchase
To determine if a used car is priced fairly:
- Use tools like Carrokie Canada’s Value Range to compare similar vehicles in your area.
- Understand factors like accident history, maintenance records, and weather damage.
A thorough test drive should last about 30 minutes. Here’s how:
- Familiar route: Drive in an area you know well.
- Test all features: Brake, park, corner, accelerate, merge, and change lanes.
- Assess accessories: Ensure everything works, including air conditioning, windows, etc.
A pre-purchase inspection reveals the cosmetic, mechanical, and safety condition of the car. A mechanic can identify existing issues and potential future problems, helping you decide whether to negotiate or walk away.
A VIN check helps you decode important details about the car, such as its make, model, and history. The VIN is typically located on the inside of the driver’s door jamb or windshield. Use free tools like VIN decoders to learn about the car’s background.
