Even if you love that "new car" smell, buying a brand new automobile might not be the best use of your money. New cars lose value the moment you drive them off the lot, and by the time you've owned the car for four years it's only worth around half of what you paid for it. Buying used can help you save money. But it can also be scary if you don't do your homework, particularly if you are buying from a private seller.
Make A List
Every car is unique, but the information you want to know about the car before you buy it is the same. Chances are when you are in the middle of test driving a car, listening to the engine and inspecting the body, you might forget to ask an important question. Make a list of all the questions you have before you go to look at the car. That way you don't have to rely on your memory. Some things you want to know include the car's mileage, fuel efficiency, how well it has been maintained, and whether it has been in an accident or is need of any repairs.
The individual you're considering buying a used car from might not be entirely truthful with you when you ask your questions. That's why it's important to ask to see documentation to verify your answers. This documentation should include receipts for oil changes, new tires, scheduled maintenance and repairs. This information can tell you a lot about a car's history. If the seller has been meticulous about maintaining the car's paperwork, chances are she has been meticulous about maintaining the car as well.
Kick The Tires
In the good old days, people used to kick the tires on a used car. The origins of the term are lost to antiquity, but the idea is still sound. Kicking the tires is just another way of saying you need to inspect the vehicle to make sure it is mechanically sound. Checking the oil level and taking the car for a test drive are no substitute for having it looked over by a qualified mechanic. Getting a second pair of eyes on the car, particularly if that pair of eyes belongs to someone who knows a thing or two about cars, can keep you from buying someone else's headache.
Know Your Limits
With all the information about virtually every make and model of car available online, there is no reason to overpay for a used car. Knowing what similar vehicles are selling for in your area, and having your financing in place before you go, can give you an advantage when it comes time to haggle over price. Determine beforehand the upper limit of what you're willing to pay, but start out by offering what you'd like to pay. If the seller's final asking price exceeds your limit, be willing to walk away. There's always another car for sale if you have the patience to wait.
- Edmunds: How Fast Does My New Car Lose Value?
- Autoweek: Used Car Advice: Buying From A Private Seller
- J.D. Power and Associates: Pros And Cons Of Buying A Used Car From A Private Party Seller
- Federal Trade Commission: Buying a Used Car
- DMV: Guide to Buying a Used Car
- NADA Guides: Buying From a Private Party
Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.