Thanks to the Covid pandemic the demand for the used cars has significantly increased from the pre-pandemic times. It is generally seen that whenever there has been a downturn in the economic condition, people are often inclined towards buying used cars.
Nowadays, the purchase of used cars happens on various platforms such as web portals, used car dealers and offline advertising. However, buying a used car can be a gruelling task and you obviously cannot trust every used car offer that comes your way. Buying a used car can be a smart investment as long as you know how to go about shopping for one. There are a great many incentives in buying a used car as it can save you money on registration, car insurance, taxes, and most importantly, depreciation of the new car’s value, which happens the moment the new car is out of the showroom and also the wear and tear that happens with time.
For a smooth and stress-free experience, here are few tips to consider before purchasing a used car:
1 – Access and set your budget.
Now this totally depends on how you plan to pay for it; will you be taking out a loan to pay for your car or pay cash? If you are paying in cash, budgeting does become simple. Remember to set aside some funds for registration, insurance and maintenance.
Not everyone is able to pay down the cash in full. Also, it is wise to take out a car loan so that you don’t make a dent in your savings. Knowing your budget makes negotiating prices easier and it also helps you set the “upper limit” of your price range. Do not hesitate to negotiate and get better deals. Do your due diligence and check the market price for other cars of similar model. Most of the times, the sellers tend to sell at a higher price.
Financing also gives you the freedom to stretch that budget of yours a bit more.
A tip to remember: While buying a used car, the financing rates are higher than those of new cars. Why is this rule in place? If you default on the loan taken out on a new car, the lender can repossess the car and get a better resale value on a new car than on used ones. It’s that simple!
If you decide to buy from a car dealership, then you must know that dealer financing is a form of an indirect loan and is often accompanied by additional interest rates.
The best way to go about this is to check with various lenders and consider taking the best rates.
Now that you have set your budget, don’t go about over-spending. Keep certain factors in mind, such as: how long do you intend to keep the vehicle? What is your average usage? How much would the maintenance and general repairs cost? (depending on the model you are planning to buy).
2 – Choose the right car.
Now that you have sorted your budget, the fun begins-even though you are buying a used car.
I mean even though it is fun, it can also be challenging. It’s so easy to get distracted, when you are out buying you might see various options in front of you and you might get tempted into buying something way beyond your budget. It happens to the best of us!
Take some time and think what car is best suited for your need and lifestyle rather than be blinded by how flashy it is. If you live in places or areas which have bad roads, then a vehicle with higher ground clearance would be a wise choice. Similarly, consider your basic needs when it comes to the choice of vehicle and make a list: would an MPV serve your purpose or would a sedan suffice? Once you have made a decision, start looking for the type of models that fit your budget.
3 – Inspect the car’s condition and get a mechanic to do the same.
When you are buying a used car, it is imperative that you closely inspect the vehicle and make sure that it is in a good running condition. Even if you have a decent amount of understanding of certain mechanical components of a car, it would be advantageous for you if you take a mechanic along to inspect the vehicle. It is obvious that a skilled mechanic could easily detect the smallest of glitches, the condition and the reliability of the vehicle and can give you a clear idea of how much the repair work would cost (if any).
Take long test drives, ideally with the radio off. This will help you hear any rattling noises or vibrations that might indicate worn out tires or suspension. Also, check for any blind spots, the pickup and the feel of the steering, the efficacy of the brakes and the ergonomics (which basically means whether you can easily reach all the controls and gauges). At the same time, also check the back seat for leg room and the vehicle’s capacity to carry cargo.
Once you tick most of these important boxes, check the other features such as the sound system, Bluetooth connectivity etc.
4 – Check the VIN, Service Records and Insurance Records.
While buying used cars, you could use the VIN (Vehicle Identification Number) to obtain many details about the vehicle, like the date of manufacture of the vehicle and the service records from authorized service centres.
By checking the insurance records, you can easily know what the vehicle has gone through and what all accidents it has been involved in.
If at all you find that the vehicle has a “salvage title”, steer clear of that deal.
The insurance companies issue this title to alert the future buyers. Also, the salvage title brings down the resale value further and it is fully possible that the vehicle could have some camouflaged problems. There have been many cases where some shady car dealers spin the odometer to increase the sale price. Here, the vehicle history report can alert you of such frauds.
Also, don’t forget to check the tax documents and a valid PUC certification.
5 – Be sure to check the car in daylight.
This is a particularly important step especially while buying used cars. Many a times the fancy showroom lights could easily hide the scratches and paint fades on the body of the vehicle. While at it, also check for rust spots. Rust tends to weaken the metal and compromise the structural integrity of the vehicle. And you definitely don’t want to risk that.
Apart from the above, if you decide to purchase the vehicle directly from the seller after seeing an advertisement, then contact the seller and ask some basic questions like:
- If he/she is the first owner?
- Does he/she have the title deed and is it clear?
- Are all the documents and service records available?
- Can you have the car inspected by a mechanic?
- Also, is there something else that you need to know which was probably not mentioned in the advertisement?
Closing the Deal.
Before you transfer the car to your name, make sure you add it to your insurance policy and then make the payment with your preferred mode. Ensure that you get a title and, also that the seller has signed it correctly.
If you choose to buy from a private party, then check whether there is a loan on the car. If yes, then call the lender and work out ways to close the deal. If it is a bank loan, then arrange a meeting with the seller in the branch office and sign the papers at the branch.
In most cases, before the contract is drawn up, it is fully possible that that the finance manager could pitch-in some additional services and products. Here, at the right price, you could buy an extended warranty after confirming how much warranty is still left on the car. Nowadays, most manufacturers offer powertrain warranties that covers the cost to repair or replace certain components like the engine, transmission, front and rear wheel drive systems, seals, gaskets and certain other internal parts.
So, take your time and review the contract. Do not rush into signing anything, just to be done with it. You will also see that the contract will include certain extra components such as- Documentation Fee, State sales tax and Registration fees. Ensure that your finance manager is able to explain every fee in the contract; and if he is unable to, have it removed.
Once all this is done, sign the papers and enjoy your new ride!