Shopping for a used car can be both an exciting and overwhelming time. With a little bit of forethought and planning, this car shopping journey can be smooth and trouble-free. Let’s look at some hacks and tips for buying your next set of wheels.
Why Are You Buying This Car?
Knowing your motivation for choosing a new-to-you car is essential. Will this vehicle be a daily driver, or is it something for weekend adventures? Also, figure out what capabilities you’ll need in this vehicle. How many people and how much cargo will it need to carry? Do you need all-wheel drive? These answers will help you identify the type of vehicle you want and the features you need. So, take note of:
- Purpose (daily driver, weekender, etc.)
- Body style (sedan, SUV, etc.)
- Features (AWD, advanced safety aids, etc.)
Set Your Budget
Determine how much you can spend on a used car. This will help ground your search in reality. $25,000 won’t get you a decent three-year-old Porsche, but there are plenty of Camaros available in this price range.
Be sure to include all the costs associated with car ownership.
Private Seller Vs. Dealer
Knowing your car preferences and budget, begin to search for your car. This will likely start online. Depending on where you look, sellers can include both private parties and licensed dealers. Keeping an open mind, let’s go over the pros and cons of each buying option. We’ll also look at what’s involved with virtual car shopping.
Buying a used car through a private seller can save money compared to a dealer, but this approach will require extra work on your part. A private seller can be:
- More motivated to sell
- Willing to negotiate the selling price
- Less assertive than a salesperson at a dealership
- Helpful with information on the car’s details and the ownership experience
Your extra steps with a private sale may include:
- Arranging a safe and convenient place to view and drive the car
- Getting a vehicle history report
- Realizing you’re buying the car “as-is”
- Coordinating a pre-purchase inspection
- Handling the titling and registration process
Car dealers range from manufacturer franchised dealerships--like a “Toyota” or “Audi” store--to independent dealers. Most new car dealers also offer used cars from other brands. Independent dealers can include small, single-location operations to multi-state sellers like AutoNation or CarMax. Keep in mind that most states require dealership sales staff to be licensed. Most reliable dealerships:
- Are reviewed through Google, Yelp, DealerRater, and other publicly accessible sources.
- Provide test drives
- Arrange vehicle registration and titling
- Offer vehicle history reports
- Have a permanent place of business
- Sell extended warranties for used cars
- Offer cars that have been inspected and meet state safety regulations
- Offer financing
- Accept trade-ins
- Abide by applicable buyer protection and disclosure laws
In most cases, a similar car will cost more at a dealer than with a private seller. The dealer has overhead, so your price there will reflect this. Places like CarMax provide a no-haggle environment, but other dealers expect buyers to negotiate, so don’t hesitate to ask for better pricing.
Consider Certified Pre-Owned
If your shopping preferences include a newer used car, something less than six years old, consider a certified pre-owned (CPO) vehicle. CPO cars have already taken the depreciation hit and come with a manufacturer-backed warranty. Note that official CPO offerings are only available from a franchised dealer for that brand. Independent dealers selling “certified” cars may only be pushing a third-party warranty with dubious coverage.
Since the onset of the pandemic, virtual shopping has taken on new importance for parties on both sides of the transaction. So, whether you are shopping cross town or cross country, your selection of available cars becomes even more expansive. This is especially helpful if you are looking for a less widely available car or seeking a vehicle with a particular feature. Following a thorough review of a vehicle’s history, additional services can make for an even easier remote shopping experience.
- Escrow : An escrow service holds your money until you take delivery of the vehicle and approve the transaction.
- Pre-Purchase Inspection : Several companies offer remote vehicle inspection services where a professional mechanic evaluates the car at the seller’s location.
- Shipping : A vehicle shipper can collect the car from the seller and deliver it right to your door.
Vehicle History Reports
A vehicle history report, likely from AutoCheck or CarFax, is your most important tool when shopping for a used car. While not perfect, this information will tell you if a vehicle has been in an accident or damaged in a flood. Some reports also include service and repair data. You may even learn if there’s a problem with the title. Any reputable dealer will provide this information at no charge. If not, walk away. You may have to buy a report if you’re purchasing from a private seller.
Be on the lookout for a new scam called VIN cloning. In this situation, the vehicle identification number from a problem-free car is copied onto a vehicle with a bad history like an accident or salvaged title. An older vehicle with only recently reported history is a classic sign that’s something is wrong.
Your other important used car buying tool is a pre-purchase inspection (PPI). Unless you’re buying a cheap jalopy or project car with known issues, the money for a PPI (about $100-$200) is a small price to pay to uncover potential problems. Most local repair shops can perform a PPI, and many mobile services can conduct an inspection at the location of your choosing. Make sure to inform the mechanic about any known issues and ask if the review will check for rust and hidden frame or body damage.
Be on the alert for a seller (private or dealer) that won’t allow a PPI. This is probably a warning sign that they’re hiding something. However, some dealers like Carvana don’t permit a PPI but provide a vehicle return period instead. During this time frame, typically 3-7 days, you can have the car inspected and return it if the results are unsatisfactory. Make sure to understand the conditions and restrictions of any car return policy.