In the American west, cars are a part of life. Without a car, it’s hard to do little things like buy groceries or commute to work. Unfortunately, cars are expensive, and there a lot to consider when purchasing one. This is especially true for students, new graduates, and young professionals who’ve never purchased a car before. Fortunately, the internet is here to help. Use these seven tips, and you can purchase a used car that meets your needs and fits your budget.
Step 1: Create a Budget
Before you add another expense to your monthly budget, it’s important to decide how much you can realistically afford. As a rule of thumb, try not to spend more than 15% of your monthly income on a car payment. For example, if you make $2,000 per month, you should try to keep your car payment under $300. For planning purposes, use a car payment calculator to estimate your monthly payment for a number of vehicles.
Step 2: Research Several Models
The make, model, and year of your vehicle will influence how long it lasts. Before you purchase a used car, research at least three models to death. Specifically, look up the vehicles’ known weak points, repair costs, and resale values. For example, Volkswagens are notoriously expensive to repair, while the Nissan Leaf has a terrible resale value. If you have no idea where to start, try a 2008 Toyota Corolla, a 2006 Subaru Outback, or a 2007 Honda Accord. According to Kelly Blue Book, these are three of the best-used vehicles for under $8,000.
Step 3: Find a Vehicles for Sale
After researching at least three models, it’s time to start shopping. Used cars are available in a variety of places, including new car dealerships, independent used car dealerships, used car retailers, and online marketplaces. Of these sources, online marketplaces tend to offer the lowest prices because they eliminate the “middleman.” Conversely, new car dealerships carry certified pre-owned (CPO) vehicles at a higher price point. These vehicles are usually retired rentals that come with a manufacturer warranty. While the powertrain warranty may sound nice, think about how you treated your last rental car. In my opinion, a warranty isn’t enough to justify the increased cost. When you’re ready to get started, a used car inventory tool can help you find potential vehicles.
Step 4: Contact the Seller
After you decide to purchase the vehicle, reach out to the seller. It’s important to establish a positive working relationship before money exchanges hands. If dealing with an individual, you can ask questions about the car’s history and present condition. During your conversation, ask why they’re parting with the vehicle. These questions can reveal information that may have been omitted from the online listing. This step will also help you to negotiate a fair price later on. When you’re ready, arrange an appointment to take the car for a test drive.
Step 5: Take It for a Test Drive
A test drive can help you determine whether or not the vehicle is right for you. Before you get into the car, inspect the exterior. Are there any scratches or blemishes that were not present in the pictures? How does it look under the hood? Is anything leaking, steaming, or covered with oil? How are the tires? Are they full, and do they have threads left? Once inside the vehicle, inspect the dashboard. Are any service lights on? Start the vehicle, and take a deep breath. Is the car making any unusual odors, and is the air conditioner cool? While on the road, pay attention to the vehicle’s brakes, acceleration, transmission, and power steering. Take note of any grinding, squeaking, or crunching, and move on to the next step.
Step 6: Check the Vehicle’s History
When purchasing a used car, it’s important to know what you’re paying for. A vehicle history report will help you determine if the odometer has ever been rolled back or if the vehicle has been totaled. AutoCheck and Carfax are two companies that can help you procure a vehicle history report with nothing more than a VIN or license plate number. If the report checks out, consider a professional inspection. For around $100, most mechanics will tell you if the vehicle has any issues that should prevent it from being purchased.
Step 7: Negotiate a Fair Price
By this point, you’ve done a ton of research. It’s time to make a decision. If you want the car, get ready to negotiate. Use your initial research, car history report, test drive, and inspection to determine how much you’re willing to pay for the vehicle. Make a first offer that is somewhat lower than the amount you’re willing to pay. If questioned, mention the average resale price and explain the reasoning for your offer. Continue to go back and forth until you agree on a price that is within your total budget and near the average resale price. Last of all, don’t be afraid to walk away from a deal. A car is an important purchase, and you shouldn’t rush in.