What Not to Do When Buying a Used Car
Before you buy a used car, you absolutely need to do your research. There are several pitfalls to avoid in order to ensure you get the best deal possible. Here are some tips designed to help you ensure success when buying a used car:
1. Pass over the fine print. You could end up overpaying if you don’t. Dealers are good at selling cars. Without you being attentive, you can cheat yourself right out of a fair deal. You could be paying tacked-on delivery fees, higher-than-usual financing charges, unnecessary add-ons, and overpriced extended warranties.
2. Don’t let the dealership handle the financing. Save yourself some time and trouble. Get an auto loan before negotiating with the car dealer. That way you will know how much money you have to spend and what a fair price is for the car.
3. Don’t trade in your old vehicle at the dealer. If you use your old car as a trade-in, you are just giving yourself more things to negotiate. You will generally get a much better return on your old car by selling it yourself to an individual.
4. Don’t negotiate on anything other than the out-the-door price. You need to focus on the price to get out the door and not worry about anything else. Don’t bother with the invoice, negotiate from the MSRP (manufacturer’s suggested retail price), or worry about other distractions. Just emphasize the final price you’ll have to pay.
5. Don’t just buy from the first dealer you find that has the car you like. Get a good price by comparison shopping. Visit different dealers and shop online. And watch out for those negative amortization loans, which are rarely a good deal. Similarly, be wary of dealers that promise you a check after financing a car or even let you borrow more than the car’s value.
6. Don’t buy at the wrong time. When new model vehicles are debuting, dealerships are willing to offer better deals to get rid of the vehicles already on the lot. Studies have shown that you can get better deals at the end of the month, the end of the quarter, or when the dealer is trying to reach a particular sales incentive.
7. Don’t take the too-good-to-be-true financing offers; instead, take the rebates. Use your rebate toward paying down the best price you just negotiated. Even if you pay a bit higher of an interest rate, you won’t be missing out if you’ve shopped around carefully.
8. Don’t keep pushing a deal on a car. Be ready and willing to walk away. You can buy that car tomorrow if the dealer isn’t being reasonable. It’s OK—in fact, smart—to walk away if they are offering you a less-than-fair deal either price- or financing-wise (or both).
Before you drop a huge amount of money on your new used car, remember these important rules. By following this helpful advice, you’ll both save money and prevent yourself from making potentially costly mistakes.