So you want to buy a used car, and you’re not quite sure where to start. Don’t worry, millions of drivers before you have wandered into dealership after dealership, lost among the MINIs and Volkswagens and Toyotas, distracted by the bright neon price tags and “GREAT DEAL” stickers which nearly blinded them. We’re here to take out the confusion of car shopping and help you get the car of your dreams while we’re at it.
Step One: Set A Budget
A real one. Trust me, going in with $5,000 in your bank account and getting that red Mustang will not end well. Flash forward to 15 months later and you’re at the crossroads between paying your monthly car payment or buying groceries. But hey, at least you can drive to the grocery store even if you can’t afford cereal, right? Wrong. Let’s set a budget.
Unfortunately, it’s not as simple as having $5,000 and getting a car with $5,000 stamped across the sticker. But it doesn’t have to be difficult either. You want—no, NEED—to get pre-approved for an auto loan first. This way, you already have built a relationship with a financial institution that will help you get your dream car, and you get a better interest rate as well. When you go to a dealership, their finance managers may seem friendly and charming (that is their job after all) but they tend to give you a rate that can be a whole 2% higher APR than you would pay if you were pre-approved. After you apply to get pre-approved and know how much you’ll be paying in interest, you can use an auto loan calculator and get an exact idea of how much you can spend at the dealership. Now, you can be informed and, quite literally, not break the bank.
Pro Tip: Let’s say you don’t have time to fill out an application for an auto loan, but you don’t want the dealership to drive off with your life savings. Well, if your dealership is a CUDL member, simply ask if you can finance the loan through CUDL. This means that the loan will be sent straight to a credit union the dealership has a good relationship with, and that credit union will (most likely) also have a better rate on the loan than the dealership would give you. Added bonus: if the credit union receives the loan through CUDL, they have a higher chance of approving your loan, even if your credit score is a little shaky. And you get your auto-loan set up within minutes without ever leaving the dealership, so it’s a win-win (plus, who knew getting a car loan could sound so cute)!
Step Two: Know What You Want
It’s a good idea to go online and look through dealership’s inventories and other online databases that list used cars and their prices. Usually these resources have additional information, such as a Carfax report on the car, mpg of the model, transmission on the vehicle, etc. Get a good idea of what car you’re looking for, the price point, and even the history of the vehicle if you’re interested in a specific car. You want to know what you’re buying beforehand, otherwise you may pay a pretty penny for a lemon, and making lemonade with a car that doesn’t run is pretty hard. On SafeAmerica’s databases, you get to choose if you’re looking for a new or used car, the make and model, your price range, the preferred mileage on the vehicle, and you can even input your zip code to find dealerships near you that have the car you’re looking for – all from the comfort of your own couch.
Step Three: Go to the Dealership!
Having done your research and gotten pre-approved, you’re one of the more informed buyers and you have a good idea of what you want and can afford. Now, just because you’re at the dealership doesn’t mean you can quickly get that car and ride off into the sunset. There’s still a few things to look out for.
Step Four: Physical Assessment and Carfax
A vehicle’s Carfax report gives you vital information about any car you’re hoping to buy, and we can help you get it and save money too! Kelley Blue Book also gives some pretty helpful tips on what keep an eye out for when car shopping. You’ll want to check out the car you’re interested in, and do a good job of it too. Keep cautious for signs of physical wear and tear, such as wear on the tires, uneven sides and panels on the car which may indicate a previous accident, mismatching paint or paint runoff which suggests the vehicle got a quick (and probably not long-lasting) spray-paint job, and check the radiator fluid for oil drops or foam which could indicate a host of other problems in the car. You may also want to have a mechanic look over the car so you have a good idea about the safety of the vehicle you’re interested in.
Step Five: Drive!
If your car has passed all of the previous tests, take it for a test drive! Often times, internal problems aren’t visible from a physical assessment but you’ll be able to feel them while driving the car. You’ll be able to tell how comfortable sitting in the vehicle is (this may seem minor, but imagine sitting on a hard seat for an 8 hour drive!), if the engine makes grinding sounds, and if all dashboard lights are properly functioning. Also check to see if the car is swerving instead of driving in a straight line, if the brakes are properly calibrated, and if the steering wheel is shaking (hint: it shouldn’t be).
Step Six: Get It Covered
You’ll want to talk to the dealer and see what the warranty on the car is. Most car companies offer a warranty for 36,000 miles or for 3 years, whichever one comes first. Because you’re buying a used car, odds are either the time limit or mileage limit on the car has already passed, and it’s no longer covered by the manufacturer. If your car is no longer covered, it’s highly advised that you purchase coverage. A lot of dealerships will offer seemingly affordable coverage which actually be twice the amount you should be paying. With our Guaranteed Auto Coverage and Mechanical Breakdown Protection you can be covered for only pennies a day and have peace of mind knowing that your vehicle is protected.
Step Seven: Negotiate
You’ve found a car with a clean history, handles well, and is within (or close to) your price range, now get the most bang for your buck! Remember to negotiate the car price, down payment, and monthly payment separately. These are all different facets of buying a car, and you don’t want to end up with a high car price but a low monthly payment, or you’ll be paying off the loan for years and years to come. Make sure to stick your ground, while remaining reasonable. If a dealer tries to tell you your numbers are incorrect, don’t doubt yourself! You’ve done your research and you’ve come prepared. Don’t feel bound to the car you think you love- if the price point is too high there’s always other dealerships you can look into as well. There’s no reason why you can’t get a car you want and still remain within your budget.
Step Eight: Drive into the Sunset
You did your research, you negotiated the price, and you’ve gotten a great car. Now the hard work is all over, and you can rev that engine and feel the wind in your hair! Drive safely with SafeAmerica.
“Getting Preapproved for a Car Loan Has Advantages.” NerdWallet.
“10 Steps To Buying A New Car.” Kelley Blue Blook.
“How to Negotiate a New Car Price Effectively.” Consumer Reports.