While having a slick, new vehicle sounds fantastic, many people prefer to buy used cars for many reasons, one of which is the cost. On average, used cars’ prices are 50% lower than new cars, which means you will be able to pay off a used car much faster.
Another reason is the depreciation. The bulk of depreciation has already occurred with a used car and was shouldered by the original owner.
However, buying a used car is not as easy as buying a new vehicle. Surely, you don’t want to buy a lemon. So before you sign the contract, here are some tips to keep in mind to avoid getting ripped off:
Set a Budget
Before anything else, it’s important to determine a budget to narrow down your options.
Most financial experts recommend the 10-20 rule when budgeting for a new car. This means you allocate 10% of your monthly income for your car’s monthly amortization and 20% of your annual income to pay for the unit in cold cash.
If this isn’t enough to pay for a decent used car, opt for financing and set aside 20% for the down payment.
Decide on the Car Model
Once you’ve set the budget, you can start looking for the perfect car model.
Choose a car based on your current and anticipated needs, and to avoid getting ripped off, don’t let the car dealer pressure you into buying anything until you’ve fully identified your needs and preferences.
Next, check which car models, years, and mileage would fit within your budget. You can do this through a quick online search.
Get a Professional Car Inspection
Many people buy a car before getting it checked. Well, that isn’t the way to go. Even if you trust the seller, you must practice due diligence, including reviewing the vehicle’s history and inspecting the car by a professional technician.
Look for authorized providers of vehicle inspections in your area. Most mechanics will do one at their shop, while others are willing to conduct on-site inspections.
Most dealerships will also offer multi-point inspection from a reputable mechanic. Whoever you choose, make sure they check the engine, transmission, brakes, fluids, lights, and interiors. The inspector will tell you the most important repairs that need to be done on the car. They can also make recommendations on what upgrades you need.
For example, if you often drive in off-road locations and harsh conditions, you may need to switch to custom wheels for a safer and more comfortable riding experience.
Check the Vehicle’s History
Whether buying from a dealership or a private seller, checking the vehicle’s history report is a good practice.
This can tell you many things, including major gaps in inspection or maintenance dates that can signal that the car sat for a long time, leading to issues over time.
It can also tell you if the vehicle was damaged by a natural disaster like fire or flood, or accidents. Most dealerships provide vehicle history reports, but you can also get one on your own online.
The National Insurance Crime Bureau (NICB), through the VINCheck website, provides information about insurance claims about flood damage and thefts. You can even find car insurance quotes with just the VIN.
Negotiate the Price
Don’t forget to negotiate a price. It’ll be easier to negotiate when you know how much the car is worth on average. If you’re buying from a private seller, include in your negotiated price the cost of repairs.
If you’re buying from a dealership, negotiate on the car’s total price and not the amount of monthly payment.
Many dealerships will try to make it seem like you’re getting a great deal by offering low monthly payments when, in truth, they are charging you a lot. Don’t forget to ask about other fees as well to avoid getting ripped off.
Do a Test Drive
Test-driving several cars of the same model helps you compare how well the car rides and handles.
A test drive will tell you whether your preferred used car is in good condition or not. If you aren’t happy after the test drive, this can signify that the model you prefer or the specific car you’re purchasing isn’t the right one for you.
Test-driving a car is also a good way to examine the vehicle’s interior and features. Check if you can see through the windshield, in the mirrors, and across the dash.
Also, inspect the interior lighting, the seats, lights on the dash and indicators, safety features, etc. Thoroughly check the car’s heating and conditioning system as well.
When test-driving, simulate the types of roads you usually drive on your commute. Intentionally drive through some bumps so you can listen for rattles and check suspension issues.
Check the Documents
After checking the car, you should also examine the documents to ensure the vehicle you’re about to buy is clean.
Start by securing a copy of the Certificate of Motor Vehicle Registration from the LTO. This document is proof that the car you’re about to buy has already been registered. It also reflects the year and model of the car, the specific color, and other specifications, including the car’s chassis number.
See if it has the word “encumbered” stamped or written on the upper section of the vehicle. It signifies that the owner isn’t clear from its financial obligations.
Also, check the title before you shake hands and read and understand the purchase agreement. Double-check everything to make sure all the verbal promises of the salesman are included in your agreement.
Lastly, you should have a Deed of Sale ready. This document should be notarized to solidify its legality. Make sure the documents are in order to avoid getting ripped off.
The Buying Process
Buying a used car is a smart move, especially if you want to save money and avoid the soaring depreciation costs.
However, to ensure you’re not buying a lemon and you’re getting the best bang for your buck, there are essential things you have to keep in mind. Start by setting a budget and deciding on the car model that meets your needs and preferences.
Next, get the car inspected by a professional technician and acquire a copy of the vehicle’s history report. Don’t forget to test drive and negotiate the price. Lastly, ensure you have all the documents needed to finalize the sale.
By doing all these steps, you can avoid getting ripped off when you buy a used car for the first time.
About The Author:
At the age of four, Nathan Barnes became a car enthusiast when his father taught him the difference between Chevy and Ford. In 2012 Nathan put his knowledge into practice and started reporting on cars, races, and the auto industry on different social media platforms. Currently, he’s a happy owner of a 1967 Alfa Romeo and a Lancer GSR.
Featured Photo by Gustavo Fring from Pexels