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Buying Tips
Edmunds.com's Quick Guide to Buying a Used Car
By Philip Reed, Senior Consumer Advice Editor
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Some people might be tempted to think of buying a used car as a compromise --
you don't have the bucks for a new car, so you'll settle for a used one. This
isn't always true. In fact, buying a used car is a financially smart thing to
do, even for people with the cash to buy whatever they want.
Consider this: Cars have never been more dependable, more
advanced and safer than they are today. It used to be assumed that a car only
had about 100,000 miles of use. Now, cars go for 150,000 miles and more without
serious problems. If you buy a car with only 20,000 miles on the odometer, the
car has most of its useful life ahead of it. And someone else has suffered the
steep depreciation of buying a new car.
Furthermore, if you decide to go the used route, you might be able to step up
in class. For example, instead of buying a used "econobox," that reeks of plastic
and sports cheesy upholstery, you can buy a two-year-old midsize with a larger
engine and leather seats.
So think of yourself as getting a great car -- not a used car. And get
ready to save money with your smart decision.
Used Car Markets
There are three main places to buy used cars:
- Private parties
- New car dealerships
- Used car lots
Of these three sources, private parties usually have the most reasonable prices.
It is also a more relaxed transaction to buy a used car from a private party than
it is to face a salesman at a dealership. However, there are things in favor of
buying a used car from a new car dealership, too. And, if you are willing to negotiate,
you can get a good deal.
Another source for used cars that has emerged recently is used car lots run by
rental car agencies. These former rental cars have from 15,000 to 25,000 miles
on them and are usually one year old. Most rental car lots are no-haggle and their
prices are very competitive.
Used Car Shopping Strategy
The process of buying a used car breaks into three parts:
- Research
- Shopping
- Buying
Let's run through the three steps in more detail.
Research.
Follow these steps to complete the research phase of used car buying:
- Decide how much money you have to spend on a used car.
- Using Edmunds.com, make a list of cars that fit your needs. Make sure to
consider all cars in the class you have chosen.
- Decide on what, if any, options you require on the car you want to buy.
- Check the dependability reports on the used cars you are considering on
Edmunds.com. These are presented in a bar graph format on the used car pages.
- Set a target price or a price range in which you think you can get the used
car you are considering. Go to the Edmunds.com True Market Value®
(TMV®) pricing section of our Web site and use the "Appraise this Vehicle"
feature to arrive at an accurate price.
Shopping.
The shopping phase is comprised of these steps:
- Use online classified ads such as AutoTrader.com to locate the used cars
in your area that match what you are looking for.
- Ask friends, relatives and neighbors if they are selling a used car. Someone
you know will usually provide you with more history on the vehicle than a
dealer.
- Call the party selling the car. You can get a lot of information over the
phone that will be valuable to your search. Also, you can easily eliminate
cars that have problems such as excessive mileage or a salvage title (this
means the car has been declared a "total loss" by an insurance company, usually
because of a serious accident). Create and use a form when calling that will
prompt you to ask key questions. Verify the asking price in the advertisement.
- Set an appointment to see the car in person.
- Inspect the car carefully, looking for evidence that the car may have been
in an accident.
- Test-drive the car and verify that all the controls are working.
- Ask if the factory warranty is still in effect.
- If the car checks out well up to this point, and it seems to meet your needs,
consider taking the car to a mechanic to have it inspected more thoroughly.
Buying.
The buying phase is usually made up of the following steps:
- Before you discuss price with the owner or begin negotiations, set a figure
in your own mind that you would like to pay for the car.
- Make your opening offer. If your opening offer is based on the fact that
you found mechanical problems with the car, state the problems first, then
make your offer. Your offer should be high enough to be attractive to the
owner but leave room for you to come up and still get a good deal.
- Be prepared for a counter offer. In dealing with private parties, this process
will usually be a simple two- or three-step process. If you are negotiating
with a dealer, this will take longer and involve a lot of back-and-forth.
- Be wary of additional elements being introduced into the bargaining process.
For example, a dealer might say, "I'll take your offer if you buy an extended
warranty." Only accept the additional item if you have decided, ahead of time,
it would be a good deal for you.
- Once you reach an agreement on the price, get the deal in writing. If you
are at a dealership, you will have to go to the Finance and Insurance Room
to sign contracts. Verify that all terms of the deal have been put in writing.
And, again, be ready for the dealer to try to sell you extras such as extended
warranties, vehicle locating systems, rust-proofing and roadside safety kits.
As you drive away in your car, congratulate yourself on your smart decision and
your hard work. Because you took the time to research your purchase, you may have
saved thousands of dollars. You're ahead of the game. Now, turn your focus to
keeping your car in good running order, and it will hold its value for years to
come.
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