First Time Buying a Used Car? What You Need to Know

First Time Buying a Used Car - Quicken Loans Zing Blog

We all love that new car smell, but is it worth the extra money? Sure, a new car won’t have any miles on it, but it will also depreciate in value as soon as you sign the paperwork and drive off the lot. If you’re in the market for a vehicle for the first time — or the first time in a long time — arm yourself with these tips before you head to the dealership.

Decide What You Want

Before you start thinking about loans, monthly payments and other financial issues, decide what kind of vehicle fits your needs. Do you need something utilitarian? If so, you can cross off many styles of sedans and crossover SUVs. Do you commute a long distance and require great gas mileage? Then forget a gas-guzzling king-cab pickup. Narrow the field to an ideal model with several reasonable alternatives that will work for you.

When you buy a used car, you may have to compromise on options such as body style, exterior color, sound-system features and interior upholstery. You should not compromise, though, on getting the right type of car at a reasonable price.

Figure Out Your Finances

Once you know what you want, it’s time to research costs. The beauty of used cars is the wide range of pricing available to you. If you’re budget is tight, be prepared to consider cars with high mileage and slight cosmetic flaws. Before you walk into a dealership to negotiate, you should have a firm understanding of what you can afford and what you want to spend. Sites such as AutoTrader are a good place to start your search and get a feel for pricing.

If you have good credit, you won’t have a hard time finding financing for your vehicle. Take your time looking around for the best deal, keeping in mind it might be at a credit union. If your credit rating is less than stellar, have no fear, you’re not alone. If your monthly budget is a concern, it’s a good idea to get pre-qualified before you start visiting lots so that you know how much you can spend on your vehicle and what your monthly payment will be.

Factor in the Cost of Auto Insurance

A step that many car buyers miss when they are figuring out their budget is the cost of auto insurance. Whether or not you are looking to cover the vehicle itself, the year, make and model of your vehicle will have a direct impact on how much you have to pay. If you currently have insurance on other vehicles, you can call your agency and have them tell you what you would pay if you purchased specific models. You might be surprised how much more certain models or classes of vehicles can end up costing you.

Whether or not you plan on purchasing the vehicle outright will make a significant difference as well. If you are financing or leasing the vehicle, your lender will require that you carry comprehensive and collision coverage on your policy. This is also commonly known as “full coverage” and can add significantly to your overall cost. When you own the vehicle free and clear, it’s up to you whether or not the coverage is cost-effective. Consider the cost of different coverage plans in comparison to what you would receive if there was a total loss of the vehicle.

Test Drive

Start pounding the pavement, visiting dealerships and test driving those vehicles. Keep in mind what you’ve already worked out about the kind of vehicle you need and what you’re willing to spend. Be firm with the salesperson about both the type of car and price range you’re looking for. There’s no use in driving cars you can’t afford or don’t need.

Get the Facts

Once you settle on “the” car (or truck or SUV), take a look at the vehicle history report. Most dealerships these days will provide these free to serious buyers. If you see anything that makes you uncomfortable, question it. If you don’t feel good about the answer, go home and do further research before you sign on the dotted line. You should also ask lots of questions about the dealership’s policies on returns, warranties and so on. If something goes wrong with the vehicle you purchase, what rights do you have? Find out before you leave the lot.

Consider Coverage

Now comes the fun part: Driving out of the lot with a new set of wheels. But first, you may want to consider an extended warranty. This is a used car after all, and car repairs can make a major dent in your budget. Start by getting a quote from a site such as Carchex, one of the largest providers of extended auto warranty coverage.

Have any other tips? Share them with the readers below!

 

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