By Alex Perdikis
A brand-new car isn’t in your budget, so you’re looking at used cars. Approximately 40 million preowned cars are sold, both by dealers and private parties, in the U.S. every year. With so many used cars available, how do you go about finding the vehicle that’s right for you? And how can you protect yourself from falling victim to an unscrupulous seller? Follow these tips to find the right car and stay safe when you’re looking for a used car.
How Much Money is Too Much?
If you have the cash to pay for a car upfront, that’s great. But most people have to take out a loan. Your first job is to figure out how much you can lay out. Don’t kick any tires before you know how much you can afford to pay.
The general rule of thumb is your car payment should not exceed 20 percent of your monthly take-home pay. After you factor in maintenance and upkeep, you may want to look at a lower payment than 20 percent.
How Much Car Do You Need?
Consider why you’re buying a car. Is it because you need a new car to get to work and you want better gas mileage? Have the kids grown and you need to find something smaller than the bus you’ve been driving around? Perhaps your family is growing and you need a bigger car. Figure out what size vehicle you need and narrow down your choices.
List Your Possibles
Now that you know your budgetary and lifestyle requirements, it’s time to do a little research. Perhaps higher-rated used cars are out of your price range, but there are plenty of good quality options.
“Compare brands that fit your budget and your needs. Do your research locally because prices vary from region-to-region.” – Alex Perdikis
You can search prices and compare models for your area using smartphone apps or website price comparison tools.
Which Type of Seller?
You’re going to find the lowest prices by far from private sellers. New car dealers typically sell used cars as well and you’ll find used cars on independent lots as well as retailers. Dealer prices will always be higher because of higher overhead. The highest prices typically are typically certified preowned (CPO) car purchased through a dealer. CPO cars, unlike most used cars, have a warranty. Cars have been inspected and must fit the manufacturer’s criteria to become certified. The positive of purchasing a CPO is that you’re buying a used car that has a warranty and feels “new.” That peace of mind comes at a cost, thus the higher price.
Nearly all other used car purchases are “as-is.” There are no warranties. Whatever happens after you leave the lot, driveway or parking lot is on you. That doesn’t mean you can’t buy a used car from your neighbor, but it does mean you have to be extra cautious.
Found One! Now What?
Before you run out and look at the car, contact the seller. If the seller is a dealer, find out as much as you can about the vehicle before you look at it. The dealer may provide information that rules the car out for you or sparks your interest even more. Speaking with the dealer also builds rapport to build on if you go look at the car.
If you’re dealing with a private party, you have to be more diligent. Ask the following:
- Why they are selling?
- Does the seller have mechanical and maintenance records?
- Is the seller OK with you taking the car to a mechanic BEFORE you buy?
- If inspections are required in your area, ask if the inspection is current. If not, ask if they are willing to have it inspected and/or emissions certified before you buy.
- Ask about the general condition of the car and find out if the seller bought it used or new.
If the answers seem reasonable, set up a time and place to look at and test drive the car. Take someone with you if possible and make sure others know where you are. Meet with the seller during the day to more easily see the car’s overall condition. If you must go alone, ask the seller to meet you at a busy parking lot or other public area so you’re not alone when you check out the car.
Love It? Don’t Buy Just Yet
Don’t fall completely in love just yet. Step back and take a few more steps before you agree to buy. Get a vehicle history report to check out the car’s history. You’ll need the vehicle identification number (VIN) to perform the search.
If you’re buying a car without a warranty, have the car checked out by a trusted mechanic before you buy. Yes, it costs money. But so does a faulty transmission, the cost of which will come out of your pocket after you buy the car. As-is means buyer beware. Protect yourself.
If everything checks out, negotiate your price and complete the paperwork. Then get out and enjoy your “new” used car.
Alex Perdikis, Koons of Silver Spring general manager and owner, lives in Chevy Chase with his wife and daughters.