Purchasing used cars is an excellent way to get behind the wheel of a vehicle without incurring the high cost of newer models. Considering how vehicle prices have reached new highs, purchasing used cars can help you save money.
Inflation hasn’t spared used cars. It is, however, less expensive than buying a brand-new model. Keep these tips in mind as you shop around for the best deal.
Tip 1: Create a Reasonable Budget
The best way to buy a used car is to be honest about how much you can afford.
If you already have a low-interest car loan, stick to it. Otherwise, experts recommend spending at most 25 percent of your budget on car-related expenses.
Tip 2: Look Into Financing Options
Banks, credit unions, online lenders, and dealerships are some financing options. Almost every lender provides auto loans for used cars that meet specific mileage or model year requirements. Compare auto loan rates and terms. Examine how the loan term and fees affect the total cost of financing.
Tip 3: Apply for Loan Preapproval
Auto loan preapproval isn’t a binding contract, but it gives you an idea of what you’ll pay in interest and what you can afford.
The advantage of loan preapproval is that it assures you the best deal possible. You’ll know exactly how much you can borrow for a used car, and you’ll even be able to use preapproval to negotiate with dealerships.
Tip 4: Trade in Your Old Car
Trading in your vehicle will save you money and relieve the stress of deciding what to do with it. The trade-in process varies depending on the dealership, but the steps are straightforward. You must understand the value of your existing car compared to the new one.
Tip 5: Make a Substantial Down Payment
The larger your down payment, the less you’ll need to borrow and the lower your monthly payment. A 20 percent down payment is the best option. However, with rising car prices, you should save at least 10 percent of the vehicle’s purchase price as a down payment.
Tip 6: Consider Buying a Certified Pre-Owned Vehicle
One way to avoid some risks associated with used car purchases is to look for a certified pre-owned (CPO) vehicle. The manufacturer inspects and approves these vehicles. Purchasing a CPO vehicle ensures that it has good parts, low mileage, and has been properly maintained.
Tip 7: Shop Online
Browse through reputable online sources to find the best fit within the nation. They also allow you to complete the entire car-buying process online. Even if you prefer to go the traditional route, research online before visiting the lot in person.
Tip 8: Perform a Thorough Vehicle Inspection
Purchasing a used car involves additional risks. You don’t know how the previous owner treated the vehicle, and unexpected problems could arise. Request a vehicle history report to ensure you are not driving away with a fixer-upper.
