In today’s economy, buying a used car can be a smart decision. New cars depreciate in value dramatically from the day you drive it off of the lot. Used cars, on the other hand, have already depreciated in value so when it comes time to trade it in or sell it to someone else, you won’t lose out on much. In other words, with used cars you can really get the most bang for your buck.
In order to get the best deal, it is necessary to avoid the biggest and most common mistakes made when buying a used car. Knowing these common mistakes ahead of time just may prevent you from buying a “lemon”, or getting stuck with a lousy payment plan. Here are five of the biggest mistakes people make when buying a used car and how to avoid them.
1. Not asking to see service records. Never buy a used car unless the previous owner kept service records. You don’t have to know about every oil change that car has had, but you should know about important maintenance such as 50,000 mile checkups or 100,000 mile checkups. Why is this important? BMW, for instance, recommends replacing fuel pumps, water pumps, belts and hoses between 50,000 and 60,000 miles. Buying a used BMW with 55,000 miles may seem like a good idea- until you spend five grand replacing parts that the previous owner should have had replaced.
2. Not having a mechanic look the car over. Your mechanic should be a part of the test drive experience. Arrange to have your mechanic put the car up on the lift and give the car’s undercarriage a quick inspection. A look at the undercarriage may diagnose potentially serious (and expensive) problems that you may miss during the test drive.
3. Using dealer financing. Many dealers use financial institutions which promise financing to people with bad credit and no credit. Unfortunately, these lenders often charge outrageous interest rates. If your credit is fairly decent, 9 times out of 10 you will get a better rate using your own bank or credit union instead of dealer financing.
4. Overlooking details. How many months are left on the vehicle’s inspection? How worn are the tires? Did you look at the ground beneath the car to see if the car is leaking oil or engine coolant? Used car dealers are good at diguising many car problems, but tire wear, inspection stickers, and fluid leaks are hard to disguise.
5. Paying sticker price. Haggling is a time-honored tradition when buying a used car. Dealers know this, and they just might come down a few hundred dollars from the sticker price if you simply make them a respectable offer. Don’t insult the dealer, however, with an absurd offer or be too pushy. Remember, this is America and you’re shopping for a decent car. You’re not in a third-world country haggling over a goat. Be respectful to the dealer and they just might throw in some nice extras like a 3,000-mile warranty or free oil changes or inspection. You’ll catch more flies with honey than with vinegar!