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NN: Why should someone buy a used car instead of a new car?
FM: Well, there are three key factors that go into buying a used car instead of a new car. They are cost, depreciation, and flexibility. In regard to cost, the simple fact is you buy what you can afford. Looking deeper, however, one must weigh the value of buying a used car which provides you the same features and reliability as a new model. A smart used car shopper who does their research can find a vehicle to fit their needs and their budget.
Some consumers also don’t realize that a new car drops in value an average of 20% once it is titled and registered. A used car doesn’t lose that much value after its purchase. Finally, for the price of a new car, you can purchase a more upscale model used car.
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NN: What personal factors should be taken into consideration when buying a used car?
FM: Again, you should only buy what you can afford. And not just the price of the car should be considered. You must also remember insurance costs, repairs, gas, titling, registration fees, and other maintenance fees, including garaging the car if necessary. Also, you should consider what the car will be used for (i.e., who will be driving the car, will it be used as a family car, transportation to work, etc.), and, of course, the type of vehicle you are most comfortable in.
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NN: What information should someone ask for when looking to buy a used car?
FM: This is a loaded question. The short answer is none. You should be armed with as much information as possible prior to going to the dealership, and should be confirming the information you already know, not asking for information. What you should already know includes the following:
• Determine which vehicle or vehicles you are looking to buy
• Check the approximate values on those vehicles
• Determine the amount of money you are willing to spend
• Have pre-approved financing
• Check the dealer’s reputability
• If you plan on trading in a car, know that car’s trade-in value
Always remember if you have a question about any information you collect or receive, check it with a reputable source for validity, like your credit union’s auto lending area.
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NN: Where are the best places to buy a used car?
FM: I would suggest that you purchase your vehicle from a reputable franchised dealer. The car may cost you more, but you will have the security of knowing that the dealer will be there if there is a problem with the vehicle. There are alternatives, but understand that you should take extra precautions and check the vehicle thoroughly before committing to buying a vehicle from a used car lot or private individual.
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NN: Are there any “DOs and DON'Ts” when it comes to buying a used car?
FM: Yes, there are a number of things someone should and shouldn’t do in the used car buying process:
- Do plan to shop at a minimum of three different locations for your best price
- Don’t commit to a purchase right away in the process
- Do negotiate the price of the vehicle you intend to buy, and if you have a trade-in, be sure to negotiate this price separately.
- Do not give the dealer a deposit to hold your vehicle unless this your absolute final choice.
- Do examine and test drive vehicles before purchasing. Check under the hood, inside the car, and around the exterior for any defects. Consult with a mechanic if possible.
- Do not give the dealer any personal information prior to committing to a deal. If he wants your driver’s license to hold for a test drive, give him a copy.
- Do ask for a vehicle history report (i.e. Carfax) for every vehicle you look at.
- Do not accept the vehicle until all flaws/problems have been corrected to your complete satisfaction.
- Do get a copy of every paper you sign or fill out.
- Do not accept verbal promises. If it’s not in writing, it did not happen.
- Do not sign any blank or partially filled out forms. Make sure all forms are 100% completely filled out and to your satisfaction before signing.
- Do walk away from a potential deal if you feel any discomfort.
- Remember, once you have signed for and taken the vehicle, the vehicle is yours and you will have very limited recourse against the dealer if any.
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NN: You mentioned pre-approved financing earlier. Where can someone go to finance the purchase of a used car once they decide which car to buy?
FM: There are various means provided for you to finance your loan. Your credit union probably is the best choice, since its rates are probably lower than banks or other financing companies. This is because the profit motive is not the credit union’s primary motive. Remember, wherever you finance, review all the choices carefully. Do not just look at the payment, but review the cost of the entire loan for your best deal.
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NN: Any other last words of advice for potential used car buyers?
FM: Yes. Remember that you are in control of the purchase and the negotiation, not the dealer. Don’t be pressured into buying a vehicle you don’t want. And remember that if you ever feel like you’re not in complete control, walk away or call someone you trust for help. In the end it’s just a car, and you want to make sure you buy something you truly want and are comfortable with.
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NN: Thank you for your time, Frank!
FM: Anytime, and good luck to all you used car buyers out there!
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