Used car costs and how to save money on your purchase.
Prices for new cars are up by more than 30 percent over the past year, according to separate reports from iSeeCars.com and Consumer Reports. The increase is staggering, brought on by a pandemic and exacerbated by a shortage of new cars. Shopping for a used vehicle right now means battling with other consumers to find one. The law of supply and demand is dictating prices and they’re vastly skewed toward sellers.
High Prices, Few Deals
Most likely, you’ll pay far more for a used car than what you’d want if you’re in the market right now. That said, with the price increases unavoidable, you can find a diamond in the rough and clinch a deal you can live with. Read on and we’ll explore ways to save money.
Research is key.
Buying any vehicle, whether new or used, requires much research. Not only should you know the make and model you want, but the trim levels, special features, and packages. It’s also a sound practice to know what competing models are going for. Also, brand loyalty isn’t what it once was. Buy the vehicle that you can afford not the one you wish you could. Visit automotive and dealer websites, read reviews from trusted authorities, including Auto Trends Magazine. If you spot a vehicle you like, obtain a car history report. If it is clean, keep it on your list. Otherwise, move on to your next choice.
Obtain financing approval in advance.
You might not save much money on your ride, but you may find low-interest rate financing. Part of the car buying experience is making payments. Then again, if you have an all-cash deal, you’ll have some leverage and an advantage over the person who doesn’t have their financing house in order.
Scout the dealer lots.
Most new car dealer lots have very little inventory. As soon as a new car arrives, it is either already sold or likely will disappear in the next day or two. The positive news here is that people still trade in their vehicles for a new ride. Although used car inventories are moving just as fast, reach out to a dealer and ask them to keep their eyes open for you. Do this with several dealers and chances are they’ll notify you if a vehicle arrives and meets your description.
Go the private party route.
Clearly, dealer markups make buying any car an expensive proposition. Your best bet is to look locally, beginning with your neighborhood. More than likely you won’t find the exact make/model you want, but you may find a vehicle you can live with. Also, a private party may have some flexibility with price and should come in lower than what the dealer would charge. Hundreds, if not thousands of dollars can be saved by taking the private route. Use Kelley Blue Book, NADAGuides.com, or Black Book to price a car. Use that information when negotiating. Pro tip: some of the best used car deals can be had through an estate sale.
Look beyond your area.
The more populated your area, the more competitive the used car market may be. Yes, people use the internet to look far and wide for their next ride, but how many of them are willing to travel hundreds of miles to buy one? Chances are you won’t have to travel that far, but looking 50 miles beyond your population center may turn up a used car find in a rural area. Consider this: used car dealers need to make money to stay in business. That’s not a profound statement, rather it is a simple fact and the reason they’ll entertain your offer.
Make Your Move
When you do find a vehicle that meets your needs, move fast. This may involve placing a deposit on a vehicle sight unseen to hold it. Then, make a beeline for the dealership and do a test drive. If it meets your needs, negotiate the price. If you can’t save money upfront, ask the dealer to give you a warranty. Typically these are for 90 days or 4,000 miles, whichever comes first.
Image by Andreas.
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