8 Ways Smart People Save Money When Buying a Used Car

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Are you looking to spend some money on a used car? You’ve probably heard that a new car starts losing value as soon as it’s driven off the lot. In most cases, a used car can be a much better deal than a new one. You can get most of the same value for a lower cost.

Before making the purchase, look for the following things that savvy consumers consider when buying a used car.

Do Your Research Before Going To the Dealership

Being prepared is key when buying a used car. Learn about the models you’re interested in, their features and what they usually go for. Also review the problems their users typically face and the kind of maintenance they need to retain their value.

This way, you can determine if a model at a dealership is more expensive due to additional features or lower wear and tear or if the dealership is trying to take advantage of you.

By knowing what you want in your next vehicle and what each car offers, you can avoid being swayed by shady sales tactics.

Shop at the Right Time

While waiting can be frustrating, picking your timing carefully is sometimes essential to saving a lot of money on your next used car. Salespeople at dealerships may have quotas they must fill by the end of the month, quarter and year, according to Community First Credit Union, so picking up this time to buy your car may help you get the best deal possible.

Determine Your Budget

By knowing your budget and financing options (cash, loan, trade-in or a mix of these), you can negotiate effectively. Having a specific figure in mind stops you from getting sidetracked by attractive financing deals that may cost you more over time. 

If you want to save money, then buying a car with cash is the best way to go. Though this option may not be accessible to everyone, especially those without the right amount of savings to do this, paying in cash can save you thousands to tens of thousands in interest payments.

If you can’t afford to pay for the car with cash, buying an older, more affordable and reliable model might be worth it. The money you may save over time could go toward things that actually improve your quality of life instead of directly into your bank’s pocket.

Pick the Cars You Want To Inspect

Once you know the features you want and your budget, choose the cars you want to look at. Typically, you can check a dealership’s website to view their available inventory. Select the cars that meet your criteria. If you know what you want, it’s less likely that the dealership will be able to convince you to consider something more expensive that doesn’t fit your actual needs.

When buying a used car privately, carefully check the details and photos in the listing. Identify the areas you want to inspect in person and create a checklist of potential issues to ask about. 

You may be able to check a car’s history online to determine if the seller is being truthful in the listing. Find out if they aren’t telling you about any past accidents or other issues.

Check the Car in Person

When you find a used vehicle you like, check if the car meets your needs for space, comfort and other personal preferences. Look for issues like rust or cosmetic damage that may decrease the car’s value. 

You’ll likely want to do a more detailed technical inspection before purchasing. Pay special attention to signs of wear and check functionality. You can do this yourself or hire a professional to do it for you — this can save you from expensive repairs down the line.

Negotiate the Car Deal Remotely

When possible, negotiate the terms of the deal via phone, text or email. This way, you can avoid the pressure of making decisions in the high-stakes environment of a dealership. Focus on the price of the car without discussing financing options.

Get a Preapproval From Your Bank

A preapproved loan can give you leverage in financing negotiations at the dealership. Use the rate your bank offers as a baseline to see if the dealership can provide a better deal.

Negotiate Your Current Car’s Value

If you have a trade-in, check its value at multiple sources like Carvana and CarMax to get a good idea of its worth. Use the best offer as a bargaining chip when discussing trade-in values at the dealership.

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