Buying a used car is different than buying a new car. Generally, it takes more research, it’s riskier because you don’t know how the previous owner treated the car, and there are more sources from which to buy a used car.
But there is at least one significant similarity: If you need a loan from a credit union or a bank, it’s a good idea to get pre-approved.
When you begin your search for a used car by getting pre-approval, you’ll come away with clear understanding of what you can afford and what the financial institution will lend to you.
If you are a member of Truliant, you can make an appointment to visit a branch and speak with one of our financial experts. After looking at your finances – monthly salaries, debts, other obligations and credit score – Truliant will offer pre-approval for the maximum that you will be able to spend on a used car. (Learn more about pre-approval and our ExpressCheck loans here.)
Once you’re pre-approved, you can start looking for the perfect used car.
Finding a used car can be more time consuming than buying a new car simply because inventory can be much more limited, depending on what you’re looking for. However, the extra time isn’t without its benefits. Used cars are generally less expensive than new cars because the initial deep depreciation – the second you drive a new car off the lot – has already been subtracted from the price. And if the car is several years old, there will be additional depreciation factored into the price.
The best way to narrow your initial search is to begin online with a type (car, truck, SUV), brands and models you are interested in. Then you can go on the Internet and find out information about the vehicles that have captured your imagination. You’ll find features, reviews, spec sheets and stories about any safety issues. Your goal is to find a model that is appealing and fits your needs.
Once you have one or two models in mind, then you can search specific sources to discover exactly what is available and what block of model years you should focus on, given pricing and mileage considerations.
Generally, new cars are purchased online or in person at a dealership. But used cars can be purchased from individuals, general dealerships, dealerships that specialize in used cars (CarMax) or through other online sites.
The broadest, easiest place to start a search is on the Internet. AutoTrader.com is a simple way to get started. All you have to do is select a manufacturer, a model, or a style, your minimum and maximum price, your zip code and the geographic radius you would like to search in. Within seconds, you’ll have a broad selection of cars that match your criteria. This will give you a reasonable idea of prices for the type of car – model, year, mileage – that you are considering.
You can also go visit a new- and used-car dealer, or CarMax – where price haggling is not permitted – and see what they currently have in stock. Inventory at these locations can often be reviewed online.
Finally, you can consider cars being sold by individuals. AutoTrader.com has listings for individuals, as does Craigslist.com or newspaper classified ads, and what block of model years you should focus on, given pricing and mileage considerations.
Looking for Specifics
Remember, when shopping, you are looking for a specific model, block of years and features. When used car shopping, patience is a virtue as the market changes daily. Waiting, watching and being ready to pounce on new listings can be advantageous – and the longer you spend watching several sites, the more knowledge you will have of what is available.
At AutoTrader.com, for instance, you can put a specific model in the system, a range of years, a range of prices and the maximum mileage that you are willing to consider. Each search will return the inventory that meets your specs.
Refining Your Research
Once you locate a specific vehicle, you can research specific information on that vehicle. The Kelly Blue Book is a good place to start on pricing, taking into account model, year, mileage and overall condition.
The next step, especially if you are dealing with an individual seller, is to pull a CarFax or AutoCheck report. With the car’s vehicle identification number (VIN), you can get a report of the car’s history for $30 or $40. If you are buying from a dealer, most include this as a part of the vehicle’s documentation. Here is some of the information that you will find on a report:
- Does the car have a clean title?
- If the car been in an accident, flood, fire or has it been totaled by an insurance company?
- Whether the odometer has been tampered with.
- How many people have owned the car.
Costs of Ownership
It’s important to remember that the final cost of buying a car isn’t just the purchase price. Some cars are inexpensive to buy, but they are expensive to maintain. Kelly Blue Book, and Consumer Reports offer survey results on ownership costs.
Always Take a Test Drive
Most people – 90% – drive a car before they purchase. Make sure you are one of them when shopping for a car. There is important information to be gained at this point in the process:
- How comfortable are you in the car while driving?
- How are the views through the front, back and side mirrors?
- Are the controls on the dashboard easy to use?
- How does the car handle during acceleration and braking?
- Finally, if you have kids, take them. This will give you a good idea about the vehicle’s accessibility.
Invest in a Mechanic
If you like a used car and are looking to purchase, it’s recommended to take the car to an independent mechanic for an inspection. A mechanic can uncover things you simply can’t see. A private-party seller and most dealers shouldn’t object to this request. If they do, it may be wise to continue your search elsewhere.
has three simple rules for negotiating a used-car price:
- Know the approximate value of the car you want to buy.
- Always be ready to walk away from a deal if you don’t like it.
- Make a low but reasonable offer, raising it in small increments as needed.
These are good points to keep in mind when negotiating for a vehicle purchase.
With a dealership you’ll probably be offered a number of extras, which should be reviewed on an individual basis. For example, many people feel more comfortable with an extended warranty on a used car, unless the car is still under warranty. In a private-party sale, you’ll want to make sure that the deed and the registration are properly signed over to you. As with a new-car sale, there are three additional costs at this point with a dealer purchase:
- State and local taxes
- Documentation fee
- Vehicle registration
With a private-party sale there shouldn’t be a documentation fee.
Truliant Can Help
Truliant has a variety of vehicle loan options and services that are available to all members – all at competitive rates. Call us at 855.293.2957 anytime 24/7 to speak with one of our representatives, or set an appointment
to stop by one of our 30+ convenient locations today. You can also visit Truliant.og/AutoLoans
page to schedule an appointment, get more information or apply online, anytime.
All loans subject to credit approval.