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The Ultimate Used Car Buying Guide

The Ultimate Used Car Buying Guide


used carsWhen you are ready to purchase any used car information is the key to a successful purchase. This guide will outline for you several tips on how to get the right information to buy a used car. The eBook also helps you understand the process at the dealership, what to trust and what to question. Looking for the right used car can be a daunting task. If you have the right resources however it can go smoothly and give you peace-of-mind. Before you ever set foot in a dealership it’s important to do a little leg work first. The internet is full of third-party services that will have dealer’s inventory with internet pricing all in one place. Choose a local dealer with a good reputation.

Do a little research about the dealership before you choose. Better Business Bureau™, Google® Reviews, and other review sites, make sure you know who you are doing business with before you shop. Study reviews to see what others are saying about vehicles you are interested in. Keep in mind that you are buying a depreciating asset. So it may be a cool looking vehicle on the outside and a nightmare under the hood. Know before you go! With over thirty years retail automotive experience you will find this information useful and relevant to today’s automotive car buyer. Armed with good information your shopping experience will be fun and your experience will be pleasant one.

Independent Dealer vs. Franchised Dealership

In searching for a preowned vehicle you may find a particular vehicle at several different lots. It’s good to know a few things about both. Independent dealers are still governed by your States Department of Transportation, so the same laws that a franchised store is governed by apply to independents. Independents can only sell used vehicles. With these types of dealers make sure you are getting a car that has been serviced before you purchase it. If not get an independent mechanic to check it out for you, if the dealer is hesitant don’t walk run. Independent dealers are great places to do business with. Like we have stated simply do your research and make sure it’s a good store. Franchised dealers are dealers that sell new vehicles. The advantage is they have a full service and parts departments, they will have checked out the car you’re interested in, most often they will fix anything that is wrong. Find out what has been done to the car you’re interested in and ask to see the repair bills, they should happily show you.

What to Look For? What preowned car is right for me?

Before you consider purchasing a used car, it’s important to know what you’re looking for. In my experience to many customers get caught up in the moment. End up buying a car they regret. You have to remember when you buy a car in most states; once you drive off the lot you own the car. Do not fall under the misconception you have a three day right of rescission (check with your States Attorney General for clarification). Do not confuse return policies for exchange. Some dealers will allow you to exchange a car, but never return the car for your money back. Be clear on what you wanted and do not deviate from your plan. This is why good research is paramount to success.

cars for saleHere are some things to consider before you even choose your next used car:

What do I need my vehicle to do for me, such as, get to work, family vacations, take kids from one thing to another, work from my vehicle and so on. Cost of ownership! Make sure you’re completely aware of how much maintenance costs will be. How much fuel costs will be. Sadly I have seen people buy their so call dream car only to find they can’t afford the normal scheduled maintenance. Did you know that some engines hold as much as eight to twelve quarts of oil? Factor cost of ownership into your budget. Insurance costs, call your agent before you make a final decision. It’s not just the car payment you have to worry about. Once you have established that you can afford the care of the vehicles you are considering, and then we move on to research.
With literally dozens of websites that claim shop with them to get the best price or information, it’s clearly important to know what to trust.

So we have narrowed down a few vehicles we like, here are some things to do before we get too involved in the purchase process:

* Check review sites and see what owners are saying about a particular vehicle. You can also check what professional review sites are saying about the car.

* Check and see if the vehicles you’re interested in have had any major recalls. If the vehicles you are considering have any major issues. This can be a real problem if you do not spend time to find out. Down the road you could have real issues with a vehicle and potentially harm you at resale time.

* Check and see when the last model change was. Is the model you’re interested in getting ready to change? This can hurt your resale value a lot. If it is a couple years away then do not sweat that as much as you might if it is the same year.

Clearing these issues to your satisfaction now, we can move onto what to look for in the actual car you to choose. Here is a good checklist for that:

When you have decided on XYZ car, then you will want to find the vehicle in dealer’s inventory. A simple Google® search can assist.

You will see many third party sites saying they have the best or lowest prices. The only place to get the best deal, at the dealership. Use the sites to get an idea of what the market is for the particular car you’re searching for.

Dealers dictate the final price; it’s their car until you buy it. Going through a dealer’s internet department can save a lot of time and hassle.

Make sure the dealer who has the vehicle you want to buy is a good one. Review sites will help with that.

Check out any VIN history information, such as CARFAX™, and make sure the car has no previous damage or bad history.

Make an appointment for a test drive. Do not just drive a car around the block. Drive on regular streets and then get it out on the highway for a few exits. A good test drive should take minimum 20 minutes to 30 minutes. Remember you have to live with this car for the next few years, make sure you love it.

You do not have to decide on the first visit — in fact, do not. The only time you may want to consider buying now is if you are buying a vehicle that was limited production, or just recently out in the market. Otherwise, most likely the car will be at the dealership tomorrow. You do run a small risk of it getting sold, but it’s small.

Trade-In: What’s my trade worth?

This is the point in the negotiation where if something is going to make you walk, it’s usually the trade value. So how do you know what your vehicle is worth? You can use Kelly Blue Book® and NADA® to get an idea. Here is a misconception about these guides. They are guides only. What a dealer will give you vs. what these books say are normally two different things. Books don’t buy your trade, dealers do.

They will ultimately set the value based on the following things:

1. Condition of your vehicle. Dents, dings, scratches, windshield blemishes, tire tread, interior cleanliness (detail your vehicle before you have an appraisal, make sure the car is super clean, it makes a big difference).
2. Mechanical fitness. Has the oil been changed regularly, is the car running in good condition. Any check engine lights, ABS brake lights, any dash lights on. Dealers will deduct a lot from the value if you have check engine lights on or the oil is black. Get your trade-in decent shape before you take it in. If you want top dollar, the vehicle needs to not have any issues and be clean.
3. Huge hit for smokers. Sorry smokers but if you smoke in your vehicle you can potentially lose huge money. Dealers deduct big for smoke smell inside a vehicle. You can’t get smoke smell out of a car ever. Lots of chemical companies say they can. In 32 years of being in the business I have never seen a product get the smell out.
4. Body damage your insurance can fix. Dealers will have to fix vehicles with body damage if they plan to resell it. If you can get it fixed on your insurance you will get more in trade value. Remember a dealer needs to resell your vehicle, if it’s in the body shop for repairs it’s costing them money to just have it sit. They will allow in the value for that. [A good side note here; take good care of your current car. At some point in time you will be very glad you did.]

If a dealer picks apart your trade and you disagree, go out with the appraiser and have them show you. Do not just take someone’s word, ‘show me’! Get as close as you can to the book value. If you come up short, you will know based on your car’s condition. If you simply do not feel comfortable, go and get a second opinion.

Used Car Negotiation: Get the Best Price!

Now that we have picked out a car, it’s time to haggle. If you went through the internet department you should have pricing that was provided to you. If you have a trade you now have an idea what that’s worth. If you have gone through the internet department you will have what dealers will tell you, are their best price. Of course they are making a profit, I can share with you that internet pricing is normally pretty fair and what most customers can expect to pay in the marketplace you are in. Software that dealers now have access to let them know real time what vehicles are selling for in a particular market. So you can have some confidence you are getting a fair deal. You can always ask for a bit more or a bit more for the trade-in.

You may be able to get a few more dollars out of the dealer. If you feel you are getting a fair deal, go with your gut. If you have done your homework and checked out the vehicle you are buying you will have a pretty good idea or not if the price is fair. If it’s thousands more than what’s available question it. If you are within a few hundred dollars, feel safe that the deal is fair.

Financing – Credit Insurance, Extended Warranty, GAP

Congratulations, you have made the choice to purchase your preowned vehicle. Now it’s time to think about financing options. Before you go to the dealership be sure to check with your local bank or credit union for interest rates that are available for the year model vehicle you’re purchasing. Get your credit score before you go. Interest rates and terms are solely based on your credit score. Good or bad know before you sit down in the finance office. Knowledge is power. It also can save you thousands in interest charges. Just a 1% change in rate can make a big difference.

What about extended warranties, credit insurance, and GAP insurance? Each of these products has value for consideration. Extended warranties will protect you against high cost mechanical repairs. Warranties are negotiable no matter what the finance person is telling you. If you choose a warranty always choose the most coverage, do not buy lesser plans because they are cheaper. Get the very best plan, this way if something goes wrong you are covered. You can always tell them you will buy if they give you a discount. Warranties are like having health insurance; if you have a heart attack you are grateful you spent the money. Computers in cars are very expensive; take a look seriously before you say no. Credit Insurance covers the loan in case of death of the purchaser leaving a free and clear title to the estate. Credit disability covers for loss of income due to illness. Check the cost for this with your own insurance agent to compare costs. These can be expensive and overlap existing coverage you may already have. So talk with your own insurance agent. Gap insurance is worth the investment in case your vehicle becomes a total insurance loss early on in the note. Your insurance provider will only give you fair market value for your wrecked car, this may fall way short of what you owe. GAP does simply that, it pays the gap between what you owe and what your insurance will pay. It can be thousands of dollars, be sure to check with your insurance provider.

used car lotQuestions you need to ask:

1. What is my base payment? Meaning, what is the payment before you add any finance products.
2. Does the interest rate have any dealer mark-up? In some cases dealers can mark up the finance rate to make additional profit. They have to disclose it if you ask. If you don’t then that is on you. So ask!
3. How long am I financing for, terms? Shorter term is better if you can afford the payment. Is there any prepayment penalty?
4. How many days to my first payment? 45 days is typical, 30 days to the first payment saves you a few dollars in finance charge.

Make sure you review your documents. Do not sign anything without a full understanding of what you are signing. Don’t be afraid to read and ask questions. Remember, once you drive off you are an owner. Always get copies of ALL documents you signed at the point of sale. Do not leave without your copies EVER. This is a huge red flag if you do not receive all your copies. Make sure your financing is in place and approved.


Information is power. Do your homework before you venture out to the dealership. Do not be afraid to ask questions, if you do not feel like you are getting good information, go somewhere else. Do not be pressured into buying right now. Dealers will offer discounts to buy right now. Trust me they will give you the same deal tomorrow to sell you a car even if they say they won’t.
Cars buying is done off emotion at the dealership it’s easy to get excited. Keep a cool head and do not skip over important points. You have to keep in the back of your mind always, the decision you make you have to live with for years to come. The hardest check you will ever write is for a car that you can’t stand or is major trouble. Just because a car looks clean it may be a nightmare under the hood. Check it out thoroughly before you sign any documents. Take a second test drive if needed. Get your own mechanic to check it out. Just make sure you are happy!
If the deal feels right and you are ready, congratulations you just purchased a great preowned vehicle. Drive safely!

Writing Credit: Robert Bruton

Useful Used Car Buying Links:

Kelly Blue Book
NADA Used Car Prices
Better Business Bureau
Craigslist Autos
eBay Motors