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Buying a Used Car There comes a time in our life that we all want to buy a new car, until we get to the dealers lot and see the prices that is. Some new cars today are costing as much as a house did just a few years ago and I don’t know about you but my wages have not gone up that much. It is times like these that there can be wisdom in purchasing a used car. Unlike a new car, however some things are different when buying a used car.

There are two places you can purchase these used cars on the lot of a new dealership and used cars by owner. When you find them on the dealers lot most of the time they are trade-ins of someone wanting to upgrade. A trained mechanic should have inspected these cars at the lot; they may even come with a small limited warranty.

Used cars for sale by owner, however, have been checked out by no one but you. This is not necessarily a bad thing. All you need is a little knowledge before hand and you should have no problem buying the used car for sale by owner.

Mechanic

The question is should you have a used car checked by a mechanic before you buy it? Well that depends on your expertise, if you have no idea of where to put the gas in your car then you might want to find a mechanic you can trust to do it for you. The downside to this is mechanics are very busy many times and may not be able to check out your little gem within a reasonable amount of time. On the other hand, the owner may not want you taking it to another mechanic; people can be funny some times. In the last case I would walk away from a deal like that, it leads you to believe that there are things wrong with the car that the owner does not want you to know.

Used cars by owner can be a great deal or a great lemon just like a car lot the thing is knowing how to tell the difference.

Homework

When you are considering purchasing a used car by owner, you should get all the pertinent facts on the vehicle and then do your homework. There are sites like Kelley bluebook that will give you a good idea of the going rate for a used vehicle in your area. The thing to remember is this if you are buying a car for sale by owner in another state, be sure and use their state as a basis when searching approximate value.

Mileage

If you have done your homework from above you will have a good approximation of the vehicles worth and part of that will be based on the mileage that you used in the search. Be sure that you double-check this data when you get to the car.

Final

A few final things to watch for are strange knocking sounds or weird odors coming from the vehicle. If you have driven a car very long, you will know that a sickly sweet smell coming from the vents is an indication something is wrong. In addition check every function on the vehicle, heat, air, defrost, wipers ECT…. Finally take it for a test drive, do not check out the stereo on your test drive you will want to be able to hear any odd noises or vibrations the car may be making. Once you are through and have discussed with the owner any potential problems with the vehicle make an offer or if you are still concerned about the running of the car ask if you can have your mechanic check it out. These tips are a few ground rules to get you started. Most of my cars have been purchased from a for-sale-by-owner ad and I have been extremely happy with each one, it is not a process to be feared but one you need to be knowledgeable about.

For most of us, the idea of buying a new car fills our hearts with dread. We nervously approach the salesperson. We discuss. We haggle. We finally walk out of the showroom with the keys in our hand, but we can’t shake the feeling that we may have overpaid for the car.

How do you know what you should be paying for a new car? The answer is easy: Do your homework. A little bit of time spent researching at home gives you the option of purchasing a car with confidence.

The sticker price

The sticker price of any vehicle is a nice bit of fiction. It is an inflated dream the dealership would love to realize. Car salespeople tell you that the sticker price should be the starting point of your negotiations. It shouldn’t be. In fact, the sticker price bears no relevance whatsoever to the proceedings to come. Don’t even look at it. The only reason to glance at the sticker in the window is to determine what options are available on that specific car if you are thinking of purchasing it off the lot. Otherwise, disregard sticker price entirely.

Where do I start?

Your research should be complete before you ever leave the house. Begin by choosing the perfect vehicle. All car manufacturers have detailed websites that allow you to research the vehicle thoroughly and even “build” an ideal car. Once you have found the ideal car, it’s time to find out how much the car really costs. Again, the internet is your friend.

Many websites offer insight into how much the dealership actually paid for the car – the invoice price. This price should be your starting point for negotiations. Once you know what the dealership has paid for the car, you can figure out what a reasonable profit would be.

Think you’re done? Not quite. While figuring out the profit margin of the dealer can be a good strategy to getting a better price on a car, there are a few other things to consider as well.

Check to see if the dealer is receiving any rebates from the manufacturer on the vehicle. These rebates are offered to dealers on certain models. If a rebate is available, then even if the dealership sells at or below invoice price, they are still making a profit. Most car-comparison websites offer this information.

Consider the popularity of the model. If you are trying to purchase a car that is in extremely high demand, you may find that there is no negotiation. The sticker price – or even above – may be the best deal you’ll find. Thankfully, this is an unusual situation. With most car models, there is significant room to bargain a price you’re comfortable with.

Once you’ve gathered all your information, you are ready to shop. Visit several dealerships and see who offers the best price. Once your salesperson realizes you are armed with all the inside info, you’ll get the best deal possible.

Doing your homework before buying a used car can save you an incredible amount of money, especially since cars are one of the most expensive consumer items anyway. But many are not as well prepared as they should be when they get used car auto loans. For some reason, buyers seem to often let their guard down when it comes time to finance the car that they want, and here is where you can lose more money than almost anywhere else in the deal. So here are the top 5 mistakes that you want to avoid when getting used car auto loans:

Mistake #1. Not knowing what your credit score is – Before you even begin shopping for your car, get a copy of your credit report and go over it very carefully. Your credit score will determine to a very large degree how much interest you will have to pay on your car loan. Unfortunately, it’s common to find errors in your credit report that do not work in your favor, so keep up to date on your credit report and get all errors removed immediately to get your best finance deals.

Mistake #2. Not getting auto financing in advance – Once you have your credit score and know what kind of interest rate you can qualify for, shop around and line up used car auto loan financing before you visit the dealer or go shopping at all. You may want to visit your local bank that you do business with, or even your credit union as they tend to offer very good loan rates to their members. But don’t forget using the internet to get auto loan approval too. Many of the loan sites on the web are able to give you credit authorization within the same day so it’s quick and easy, and often saves money since you are dealing directly with the lender. Once you have advance financing in place you are now in position to bargain with the dealer on financing instead of just blindly accepting what they offer.

Mistake #3. Allowing the dealer to obscure details of the car deal – Car dealers often want to mix up the numbers from all segments of the deal so it becomes confusing and hard to pin down exactly what kind of deal you are getting. Do not let them separate out the three distinct parts of most car deals, (1) the actual cost of the car being bought, (2) the actual amount being allowed for trade-in, and (3) the details of the finance contract if you decide to finance the car through them. Don’t let them get you focused on your monthly payment early in the buying process. Keep financing totally separate until the end and watch everything carefully.

Mistake #4. Not going over the finance contract carefully before signing – If you decide to finance through the dealer it’s usually the last step in the process and it’s easy to be tired by this point and just want to get things over. But actually you need to be even more vigilant and review the loan contract thoroughly to be sure that you are getting the finance arrangements that you have bargained for and that no additional items were inserted into the deal that you did not already approve.

Mistake #5. Going ahead with a financing deal even when you feel uncomfortable – If you ever start to feel uncomfortable with any part of the sales or financing part of buying your car, just walk away right then. Don’t let yourself be pressured into doing anything that you don’t feel totally comfortable with. Many consumers have been hounded into buying a car that they later regretted because of not heeding this advice.

When getting used car loans, if you avoid the mistakes listed above you will be able to go a long way toward making sure that you get the right loan at the right price.

Since you are reading this, I am going to assume that you are looking into the lease options for your next new car instead of purchase options. A new car lease MAY be a good deal for you but it is something that you should examine very carefully, since you may end up in a much worse position.

On the up side, a new car lease is almost certainly going to have lower monthly payments that a purchase, compared with the same amount of money out of pocket at the time of signing. You can usually get a good deal on a car lease for less than a couple thousand out of pocket. The monthly payment is going to be determined by what the estimated resale value of the car will be at the end of the lease. So a car with poor resale value is going to have higher monthly payments than a car with a much better average resale value.

But on the down side, you are still responsible for the maintenance of your leased car – gas, oil changes, tires, tune-ups, insurance, and all the other things that normally accompany car ownership, but you are NOT building any equity in the car. In other words, you are in effect RENTING the car, except that you also have the responsibility for the maintenance of it.

Not all new car leases are created equally. You should definitely do your homework as far as what leasing programs are available, what they include and exclude, and most of all, what is it going to cost you. One big thing in almost all car leases is a mileage cap, where a typically mileage cap says that you will put no more than 12,000 miles a year on the car. So at the end of a three year lease, you can have no more than 36,000 miles on the car. You do not get any extra brownie points if there are fewer miles on it, but if there are MORE miles than that on it, you will pay through the nose for it, something like 30 cents per mile. So in this example, at the end of the lease you have 40,000 miles on it, it is going to cost you an additional $1200 to turn in the car. Ouch!

Over the course of a lease, you may want to terminate the lease early. If this might even be a remote possibility, know what your options are up front. In most cases, there is an early termination fee. Sometimes if you leased your car from a large dealership, they will allow an early termination fee without penalty if you are within about 6 months of the end of the lease, but only if you sign another agreement on another new car lease.

I would strongly encourage you to do a fair amount of homework before you sign on the dotted line. Even if the lease being offered by the dealership on your new car lease appears to be incredibly good, you can almost always be assured that there is a better program available. Sometimes the payments might be the same, but other programs may allow a higher mileage cap, might have lower or no early termination fees, and a variety of other subtle differences that could make a huge difference to you and your intended use of the new car.

Buying a car, new or used, is a big expenditure. Unfortunately, most people go to the car dealership thinking they have to pay the full sticker price of the car, not realizing there are many ways to save money. It’s also important to know how the dealers make their money on each car sale. Such knowledge will help you get the very best price on your next vehicle.

1) Know how much the car is worth.

Do your homework and research your car choices before attending a new car sale or purchasing a used car. You’ll want to know the true value of the car you wish to buy as well as the value of your current car if you wish to trade it in.

Visit the factory website of the model of car you want to see what the factory list price is for each vehicle. For example, Ford’s website (http://www.ford.com/) offers an online vehicle showroom where you can choose your next new car and pick the price range.

Go to several different dealers and research different deals on the same car before purchasing it. A lot of dealers’ prices will differ on the same make and model. Check out the wealth of information on http://www.carsguide.news.com.au which offers price comparisons on your new or used car as well as tips to help you when you purchase.

The Red Book (http://www.redbookasiapacific.com/au/) is an excellent resource to see how much a used or new car is worth. Car dealers make money by marking up the price, as do private sales. Knowing that a car is unfairly priced will help you to save hundreds, if not thousands of dollars.

2) Get the proper financing.

Car dealers can make a bundle of money selling you more car than you can afford by offering you financing for a longer period of time. You can also expect to pay more for lease options if you’re not careful. Banks and finance companies typically offer a lower interest rate than car dealerships. You can also look into financing from the manufacturer of the car for sale—you’ll pay much less in interest than on a loan from the dealer.

Banks take longer to grant approval than finance companies, which can often approve your loan online in minutes.

Never pay for a new or used car on a credit card, as you’ll be paying lots more in interest rates. One of the very best tactics is to get pre-approved for the purchase of a used or new car at a financing institution before you go car shopping. When you’re shopping, don’t tell the car sales associate. A lot of times the car dealer will cut the price of your car, thinking they’ll make money on the financing later. It will be too late to change the price on the car once they realize you already having financing.

3) Buy at the right time of the month.

Most car salesmen work on commission and get incentives for selling the most cars. By the end of the month they know if they need to up their sales and they’ll be more persuasive and aggressive to get that one last sale. However, you can use this need to sell to your advantage.

Visit a car dealership at the beginning or first of the month for an initial visit, but not to buy. This takes some of the pressure off because the salesmen aren’t going to be as persuasive to have you purchase something you can’t afford or don’t want.

Visit several car dealerships to inspect the assorted car sales and take plenty of notes. Then return to the car dealership of your choice at the end of the month when dealers are eager to make a quick car sale. Chances are you’ll get a great deal on a fantastic new or used car.

4) Forgo the extended warranty and extras.

You don’t need an extended warranty, though the salesman will make you worry and fret until you shell out the extra money to pay for the warranty. Most of the time, if you care for your car properly and maintain it according to the factory specifications you won’t need an extended warranty.

If you really think you should purchase one, wait as long as possible. Most companies allow you to wait until you’re close to the end of your regular warranty to purchase one. By then you’ll know how much maintenance your vehicle needs. If it’s a lemon by nature then an extended warranty might be a good idea in the long run.

You don’t need most of the extras offered, like rust-proofing, paint protection, tinted windows and life insurance. Educate yourself about what you need and what you don’t to keep from paying unnecessary charges.

Verify how much you’re paying for hidden charges such as shipping and preparation charges. Most of the time you can negotiate these charges down in your car sale.

5) Consider Used vs. New

New cars depreciate quickly the first two years of ownership. In fact, expect your $20,000 new car to cost you almost $7,000 in depreciation and interest rates alone (with a 6.9% loan) during that time. When you buy a used car the original owner has already absorbed the depreciation costs, leaving you with a good car that’s worth every penny.

However, the car sale market may be so slow that good deals can be had when buying a new car over a used car. It’s essential to be aware of how much car you can afford to buy and to guard against getting suckered into buying more car than you can afford.

Used Car Purchase Tips:

The uncertainty about a cars history–whether it’s been well taken care of or possibly damaged by an accident–can make some people leery about buying a used car. When buying used, it’s important to look for a car that has been properly maintained and an owner who has the records to prove it.

When buying used consider forgoing the financing and instead buy outright. Financing is a way car dealers to make money off of used car sales. Opting to pay for it in full puts money in your pocket.

Don’t be afraid of high mileage. A car driven by Grandma on weekends could actually have more problems because an idle car usually has problems associated with sitting around, such as plugged lines or rusty breaks. If you’re unsure about buying a used car because you don’t know enough about how cars work, consider spending the money to get a vehicle inspection from a reputable garage.