Buying a used car can be an affordable and practical option for many people — although it’s important to approach this process with a bit of strategy to ensure you get a good deal and a good car.
And let’s face it, the car you drive can reflect a lot about your style and perceived image and in some occupations, this can really impact your future earnings.
If a car is a couple years old but has lots of style, people will be complimenting you on your wise choice.
The last thing you want is to end up with a lemon that requires expensive repairs or an overpriced vehicle that eats up all your savings.
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Luckily, there are things you can do to help you save thousands of dollars when purchasing a used car.
Keep reading as we explore effective strategies for negotiating a fair price, identifying a reliable vehicle, and avoiding common pitfalls along the way.
So if you’re looking to get the most used car bang for your buck, read on for our experienced experts’ advice!
Research
Saving money starts with research and preparation.
First part of the preparation is to set a budget for yourself. This will help you avoid overspending and ensure that you don’t get carried away in any negotiations.
Remember, the goal is to get the car at a fair price — not to overspend or go further into debt.
Your research goal is to find the car models that meet your needs and the budget. You’re looking for cars that have a good resale value, low mileage and are known for reliability.
Research includes determining the market value of the car you’re interested in, as well as checking the seller’s background and the car’s history. Having a good understanding of the car’s value, will help to make an informed offer while negotiating with confidence.
The point of your research is to avoid a problem car that could need expensive repairs in the not to far distant future.
Thanks to the internet, it’s now easier to find and purchase a car from other states. You can even fly or take a bus to the state and drive the car back.
With the Internet, you can dive deep into those car details. Such as buying a car from a state that doesn’t use salt on their roads — this can cause rust damage to the car. Places like Texas and Arizona are good options to explore.
If you’re buying a car with a turbocharged engine, check out online reviews for other people’s experiences. You’ll want to do this because a turbocharger puts more strain on the engine and transmission.
When it comes to scan tools, the Bluedriver Onboard Diagnostic tool is a good option that’s worth considering. It costs around $99 and can do a lot for a range of cars. It’s also compatible with your smartphone, making it easy to use.
The Bluedrive tool can find diagnostic codes for common problems along with pulling up diagnostic codes that other tools might not catch. It’s a great way to get a feel for the mechanical condition of a car.
Some battery chargers include an alternator tester. You might want to put one on the car you;’re looking at to see how the alternator tests out. If it fails the test, make sure to have it tested by a professional with more expensive equipment. The reason is if there’s a check alternator indicator then it’s likely a wiring issue in the car. And it’s very common to pay $1700 or more to fix a wiring problem — I had to do that before.
If you’re interested in buying an older car, a 1970’s Honda Civic CVCC can be a great option if you find one in good condition. They were built to last and still have parts available for rebuilding. Plus, they’re relatively simple engines to work on. And personally, they are fun to ride in!
Inspect the Car
Before making an offer, it’s important to inspect the car thoroughly. Look for any signs of damage, wear and tear, or other issues that may affect the car’s value.
Take the car for a test drive and pay close attention to how it handles, any strange noises, or other potential problems.
You may want to bring a mechanic with you to get an expert opinion on the car’s interior and exterior condition.
Of course, if your transaction is over the internet, you might not have a chance to inspect the car in person. If this is the case, then you need to rely on pictures and any experience from driving a similar brand of vehicle.
Try to enlarge online pictures in your browser and look for any problem areas in the photos. You’ll want to see pictures of all sides of the car along with a picture of the lighted gauges and odometer. You’re looking for anything that doesn’t look right. And if something doesn’t look right, ask about it — this knowledge could help in price negotiations.
When dealing online, have an agreement that if there are any misrepresentations about engine quality or interior/exterior quality, that you can have remedies.
Negotiate
Negotiating the price of a used car can often be a daunting task. Yet this is the most vital part of the process to save you money.
Whether you’re buying from a dealership or a private seller, it’s important to know how to negotiate effectively to get the best price possible.
The main thing is: don’t be afraid to haggle and make a counteroffer.
The more practice you get with negotiating, naturally the better you get. So what if the first car doesn’t come in at the price you wanted. The next one probably will.
The following tips simplify the negotiation process and can be your roadmap to successfully saving a lot of money on your used car purchase.
Start with a Reasonable Offer
When it comes to making an offer, start with a reasonable price based on your research and the car’s condition.
This shows the seller that you know what you’re doing and that you’re serious about making a fair deal. Keep in mind that the seller may counter with a higher price… and that’s when negotiations start.
Say things like… “I can understand where you’re coming from but I don’t quite have the budget set aside for that, can we meet at $$$$$ and make it work?”
Be Willing to Walk Away
This is always part of any negotiation — be prepared to walk away, and mean it. In fact, this is a good way to handle any of life’s problems.
Remember… you’re the one in charge because it’s your money to spend. My barber put it rather succinctly one day when he said… “the seller needs you more than you need the seller.”
If the seller isn’t willing to meet your offer or negotiate in good faith, it’s better to move on to another car than to overpay for the one you’re interested in.
So shop the deal and don’t get emotionally connected to the car. There’s plenty of time to get emotionally connected after the deal is done.
Remember, there are literally millions of cars out there.
Focus on the Total Price
When negotiating the price, it’s important to focus on the total price of the car, not just the monthly payments. The last thing we want is any surprises or games.
This will help you avoid getting caught up in financing options or other factors that may affect the overall cost of the car.
Be sure to factor in taxes, registration fees, and other expenses when negotiating.
Consider the Seller’s Perspective
Ok, a little empathy is ok, but not too much. When negotiating, it’s important to consider the seller’s perspective to a point but in the end — it’s your money and you’re in charge.
The seller might be emotionally attached to the car and may be reluctant to sell it for less than they feel it’s worth. This means that they most likely took good car of it. So continue to be respectful and find a compromise that works for both of you.
Use words like… “I completely understand and see where you’re coming from. How about if we meet halfway at $$$$$ and call it a day.”
Be Prepared to Compromise
Negotiating is all about finding a compromise so everyone can win. Be prepared to compromise on price, as well as other things like delivery or timing.
Your goal is to get a good car at a fair price — and in a way that works for you and for the seller.
Buying from a Private Seller
Buying from private sellers can often save you money as they don’t have the overhead costs of a dealership.
Buying from a Dealership
Sometimes near the end of the month, they have a quota to meet and you can get that sweetheart deal if you ask just right.
While it’s important to research the car you want to buy and its fair market value, you don’t need to bring a laptop full of spreadsheets to the dealership.
The dealer already has this information and knows how much they’re into the car. You can simply look up the invoice price for a new car and offer something reasonable within that range.
For a used car, offer wholesale value or something reasonable that you think the dealership would accept.
You can also send cloned emails to multiple dealerships, but keep in mind that this won’t necessarily get you the best deal. While you can “pit” dealerships against each other, they won’t necessarily give you the best possible price.
When negotiating with the dealership, keep it simple. Make your offer and give the dealership a chance to say yes or no. If they say no, you can continue to push, but it’s also okay to leave and wait for them to follow up with you.
Chances are, they will try to work with you to make a sale.
Pass on the Add Ons
Don’t be swayed by add-ons like extended warranties or fancy sound systems, which can increase the price of the car. A lot of these are ways for dealers to “pad” their profits.
However, sometimes the extended warranty can be a lifesaver — if the price of the warranty is decent and the vehicle you want has a medium grade for reliability.
You have to weigh that decision based on your research and what online reviewers have commented about the vehicle that you want to purchase.
Compare Various Financing
If you’re planning to finance the car, shop around for the best rates and terms. A lower interest rate can save you thousands of dollars over the life of the loan.
Sometimes dealers have promotions and can get you a rate that’s very competitive. But how would you know? A little more research can help by checking around.
Check with your own bank and your own credit union. Often they can preapprove you for a certain amount before you decide on the exact vehicle. This greatly helps your negotiating power.
Plus… credit unions and banks often have special vehicle sales and promotions. You can often find great prices on their available vehicles they bring in for their banking clients. Check their promotions and email newsletters if you receive those.
Do Your Own Repairs
If you have some mechanical skills, consider doing your own repairs and maintenance to save money on labor costs.
This expands the type of vehicles you can fit into your budget, if you can do some of your own minor repairs.
A great place to get repair knowledge is from YouTube. I’ve found that with an error code I get using my Onboard Diagnostic Tool (OBD), I can look up any error code the car sends to the OBD and find out if the repair is easy and inexpensive — or difficult and expensive.
From there, you can decide what risk level you’d want to take.
To summarize: do your research, be respectful and willing to compromise, and you’ll be sure to find the good car of your dreams — at a price you like.
