Tips on How to Buy a Used Car
We just recently purchased a 7 passenger Ford Explorer. Buying a car tends to consume your life while you are doing it. You notice cars everywhere. You pay attention to the feel of the seats, and hurt your neck trying to look at used car dealerships when you pass.
Here are a few tips on how to buy a used car Eventual Millionaire style:
Finding the Right Vehicle
1. Pick your criteria.
We created a list of what we needed functionally so we could find the right vehicle for our needs.
We ranked our criteria from most to least important:
Fits 7 people
Has 4WD or AWD
Less than $10,000
Lowest miles
Good gas mileage
Great storage space (for my husband’s show) or trailer hitch
2. Do your research.
Before we even looked at any vehicles we wrote down ones we thought we liked. Then we researched possible used cars using Edmunds.com. Edmunds will show you vehicles that are similar to the one you looked up, which helps in finding the best car for your situation.
3. Have your list and research tools available when you go.
Have your criteria list, and a list of what cars you want to test drive. Check online to find the best places and prices in your area. But when you go, try to have a smart phone or something with internet so you can do research on location.
This was extremely important for us. Though we researched a TON beforehand, we didn’t look up every car. There was a Chrysler Pacifica that was 6 passengers and it seemed like a great touring vehicle. It drove nice, but we looked up the reviews and they weren’t great. My iPhone paid for itself that day. 🙂
4. Mitigate Your Risk.
Before you buy a car make sure you take it to a mechanic. If you can’t take it beforehand make sure you can return the car if your mechanic finds issues. Get it in writing too! (Not necessarily because used car salesmen are slimy, although some are, but because they probably won’t remember if it takes a few days.) Many used car dealers just buy cars from the auction and do almost no work on them.
Getting the Best Price
1. Test drive a car (without the salesman) and drive it to a different dealer. Then say “Do you have a better deal than this?”
This was fun. We took a car that we really liked and test drove it. We stopped at another car dealer to look at what they had. We would walk in and say, We are pretty sure we are going to buy this car right here, but I wanted to see if you could give us any better deal.
The salesmen were in awe. 🙂 But they tried to give us a better deal. We could compare the cars side by side and decide which one we liked better.
2. Pay Cash. I’ve found that car dealers like to talk in terms of monthly payments instead of how much the car actually costs. When you only have cash the salesmen not only discusses the full price, but they understand that you have limited funds. There is a hard line that stops you from overspending.
Last week we were able to have three different dealerships give us the price we wanted for one of their cars because we said we only had our trade in and $5,000 cash. (our trade in was technically worth $3,500-$4,000 and the car we ended up buying had a sticker price of $12,500)
I had a friend that bought a new car. She was so excited because she thought she couldn’t afford it but got a good deal. She told me the story of the salesman going out back to talk to the manager and was able to get the payment down $120 per month. I tried to explain that I didn’t think she talked him down in price, they changed the term of the loan.
She now had a 6 year car loan instead of 5. Instead of paying less for a car, she was paying more in interest. That is going to hurt your bottom line long term.
3. Don’t get emotional!
This is important. Don’t get attached to a car. It’s just a car.
I can say that now because I was so attached to the brand new car we bought before we got out of debt. I had imagined taking home our first child in it, and driving to preschool. It looked sleek and cool too. I would be the coolest mom on the block!
Selling the car after only two months allowed me to let go of my emotional attachment to it. Somehow it broke the spell, and I no longer get attached to cars. It’s just a car.
When you are buying a car, keep your logical head on. This isn’t the only car like it. Don’t be afraid that someone else is looking at it. Every day cars come and go.
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Good luck finding the perfect vehicle at a great price!
Do you have any good used car buying tips?
Tags: Budgeting, Debt, debt freedom, finances
Categories: All, Business, Debt Freedom, Finances, Goals
Hi I’m Jaime. Each and every week I bring you the top business advice from the people who know best.
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20 responses
I used to sell used cars. We didn’t do financing ourselves, but I know how it works. I disagree with the “cash” advice. The buying price gets lower when you are talking inhouse financing because they are going to be getting interest which adds up to a lot more money for them in the long run. What I like to do is talk financing first, this lowers the actual purchase price. Then when it comes time to actually buy the car I tell them, “You know what, I’m just going to buy it outright…” Most salesmen are too stunned to think about withdrawing the price offer. This can save you thousands!
That’s exactly what we did with our last car. And I heard that too, that they want to make money on the financing. Hm, I wonder if it could have mattered this time. Darn! 🙂
That’s what we plan on doing when we buy our next car. I heard that car salespeople earn the most commission, next is financing, and they make very little commission on a car that is paid in full.
That should say “earn the most commission on leased cars”.
*sigh* That’s what happens when you’re a new Mom and your only in your second week of returning back to work full time. 😉
Wow, congrats on the new little one! 🙂 Thanks for the comment!
Jaime, I love your idea of test driving a car to another dealership and asking them if they can find you something better. Great out of the box thinking!
Thanks so much! That’s awesome that you (a car coach!) thinks that it’s a good idea. Woo. 🙂
Jamie,
Very good write up. I’m a car guy to the core and actually enjoy the car purchase experience. I know, I’m a freak, but its fun looking at the different offerings and getting a deal. Like you mentioned, I have actually driven one dealer’s car to another car lot looking to get a deal. Of course, like you suggested, be sure you let them know you have a car from another dealer. It’s always fun when the sales person asks if you want to trade the car you just drove in and you get to tell them “No, that’s a car from the dealer down the street that I am considering.”
One of the most important points you made is “Don’t get emotional”. I call it getting married to a car. One of your greatest strengths as a car buyer is the strength to walk away. Once a sales person knows you love the car, you’re hosed, no deal for you. Even if you are in love with the car, you MUST give the sales person the impression that you are ready to walk at any time.
One more bit of advice. If you are considering trading a car in on another car, do not let them have the keys to your car before you have come to a price on the new car. Often times, they will not give your keys back until you ask for them. They know that if they have your keys, you aren’t walking off and they can keep you in the sales office.
Bottom line, car sales people do this EVERYDAY! Most people only buy a car once every few years. Sales people are good at making you feel powerless. Keep you power, don’t show your excitement about a new car, hold on to your keys, and retain your walk out power.
I love buying cars too. It’s fun, and I actually like dealing with the salesmen. But that’s because I’m not emotional and I just want a good deal.
But I must admit it’s different for a house. I do get attached to a house! This is our 4th house, and I’ll admit I am not always willing to walk away 😉
Dealerships make their BIG money buying and selling trade-ins. Don’t trade your vehicle, sell it to a private party and you’ll likely get 50-100 percent more money.
I agree with you on that. We were close to just selling the car outright. But it was so scratched, and the interior looked horrible from our kids that I didn’t want to try to sell it. We sold our last car privately and it worked out great. This time we weren’t sure we wanted to deal with it. We probably lost $1,000 or so but I didn’t have to take up my time showing the car, or not having more cash until we sold it.
Though it was a hard decision! Time beat money this round. 🙂
Soon my teenage son will be old enough to drive. We want to find him a used car that will be affordable and reliable. These are some great ideas to help with the car buying process. I liked your idea to research some cars and write down the ones you like before going to the dealership.
I like how you suggest having something that you can use to search the internet with you when you go looking for used cars. My sister is looking for her first vehicle and wants to find one at the best possible price for the quality she is getting. I’ll definitely suggest that when she does look for used cars, she has her phone with her so she can do last-minute research when she is at the lot.
It really does help to do some research on common used cars before you go out and start looking. As the article points out, this information can really come in handy when it comes to choosing one. For example, if you know what the common problems are for a car model you want to buy then you’ll know what to be aware of on the used one.
My wife has been wanting to get a new used vehicle for our family, and I think that getting some tips on how to be effective doing that would be good. I’m glad you talked about being able to avoid getting emotional and attached to a car. I’m going to have to look for some different options for used vehicles and see what we can find!
I appreciate what you said about not getting too attached to a car. My sister is really attached to her first car and is really unwilling to drive anything else. I’ll be sure to stay logical when I buy a car and try to get something that will last well for our family.
I really liked your tip to pay cash when you are buying a used car. My brother is planning to buy a used car, and he wants to make sure that he does it right. I will be sure to mention to him that he should pay in cash.
I found it interesting that you suggest making a list of your criteria and sticking to it. My dad recently bought a boat to take fishing, and now needs something to tow it. It might be a good idea for him to look into a used F 150 for sale that meets his criteria.