Buying a used car can be a very smart decision financially. But you need to be very careful when you’re buying one; otherwise, you could end up with a bad car or a bad deal. Here are the common mistakes people make.
Not Setting up Financing
The first step to buying a used car is working out how you will pay for it. If you have the cash, great. If not, you need to work out your financing first. It will let you know the upper limit of your price range. Shop around for financing options from banks, credit unions, and online lenders. Ensure that they know you’re looking for a used car. Get preapproved and ensure that you can afford it.
Only Checking Monthly Payments
A lower monthly payment is good for your budget. But if you’ll be paying it for many years, you’re definitely overpaying for the car. It makes more sense to take on a higher monthly payment so you can get debt-free sooner. You’ll also pay less interest. If possible, lease the used car.
Skipping the Test-Drive
About 20% of used-car buyers don’t test-drive the car before purchasing it. New car buyers test about seven different cars on average before choosing. This is why there are many third- and fourth-owner cars on the streets. You may realize that you’re not comfortable, or the car doesn’t suit your requirements if you don’t test-drive it.
Skipping Mechanic Inspection
Even after test-driving the car, you need to get it inspected by a professional mechanic before closing the deal. Pay for the inspection yourself if needed. The mechanic’s report could indicate serious hidden issues and save you a lot of money in the long run. Speak to the seller, arrange for a mechanic yourself, and get a written inspection report. It’ll help you work out a good price too. Remember to run a vehicle history report as well.
Making Initial Negotiations in Person
Don’t start by visiting the dealership. Collect all details without going there. After all research and comparisons, negotiate over the phone or email. It’s easier to step away from a bad deal. You also get the upper hand in such negotiations.