Buying a used car can be a financially rewarding, but also tricky endeavor.
While some cars may appear to be an extremely good deal for the value, there are too many instances where things are simply too good to be true. Let’s say you’re scrolling on an app like auto trader, and you spot a BMW 5 series that is a 2014 model for fewer than $19,000. At first, this may seem like an extremely good deal, considering that the same model, purchased brand new has a starting price of over 52, 650. What appears to be a steal, considering you are looking at a used car that is only 5 or so years old and is 30,000 cheaper than purchasing it new. If only buying a car was this simple… The general rule with used cars, is that is the price if too low, it is not in the best shape. However much the car looks nice, and clean, there may be unforeseen issues with the car and it is absolutely necessary to dig deeper into the details, before purchasing a new automobile.
There are several things of importance to look for. The following will contain tips to keep in mind when looking for, or buying a used car.
1) Do the homework:
The most common places people tend to look for cars is online, and at used car dealerships. If you are looking online, you are probably using a site such as Autotrader, craiglist or kijiji. On these sites, it is important to look for several things when you click on a car. Firstly, the kilometers versus the age of the car. The higher amount of Km’s on a car, the less reliable it will become. Generally, after 200,000kms, things on cars start requiring to be replaced. This is something to keep in mind, because if you start going for a cheaper car with higher Km’s, you will end up paying a substantial amount of money on car repairs. Keep in mind, that European cars generally always cost more to repair than domestic and Japanese made cars. Brands like Mercedes-benz, BMW and Audi are common German cars that have a high rate of depreciation. You will find that these used cars sell for cheap, but have extremely high costs to maintain and repair them. When you are browsing online, you will also see something called a car proof report. Make sure to order one, so you can see the history of the vehicle, and if it has been in any accidents, or what has been replaced.
2) Do the investigation:
Once you have your information about the vehicle, make sure to investigate it thoroughly. Examine the vehicle, accidents, millage, and take this all in consideration. List the pros and cons. If the vehicle has been in an accident, this doesn’t necessarily mean it’s a bad thing. This could turn out to be an excellent deal so long as everything has been fixed accordingly. Furthermore, make sure you examine the maintenance history. Ensuring that the previous owner(s) maintained it regularly and did not let parts wear down is essential.
3) Investigate where you are purchasing the car from. If it is a dealership, use a tool such as dealer rater to make sure you are buying from a reputable source. Also, check the policies that the seller is using ie. Money back guarantee or warranty, as these are important thing’s to keep in mind.
4) Get Certified:
Make sure the vehicle is properly certified. Often, used dealers will offer a certified used car program via their manufacturer. These can lead to benefits such as extended warranty and lower interest rates on financing.
5) The Finances:
Before you purchase a car, it is important to have a monthly budget, and have an idea on how much you can afford to spend on a car. You should know, or at least have an idea of what you can afford in terms of monthly payments, as well as factoring in Insurance costs and the inevitable cost to repair the vehicle when something goes wrong. Below attached, are some good rules of thumb when looking at finance terms on used vehicles in Canada. (Source: https://www.hondawest.ca/top-10-tips-on-buying-a-used-car-from-a-dealer/).
Typical fiance terms on used vehicles:
• Current model (2016) and one year old (2015) = maximum term of 96 months
• 2013 to 2014 = 84 months
• 2012 = 72 months
• 2011 = 60 months
• 2009 to 2010 = 48 months
• Older units = Generally 36 months if available?
6) Test Drive:
Once you have figured out your financial position, you are ready to start a test drive. Book your appointment and see how the car drives. Some things to look for are; has the vehicle been cleaned and kept in an orderly shape? Any scratches on the exterior and interior?…etc. You may be able to get the dealer to drop the price if you see something small that didn’t appear in the listing.
7) Review the fine print:
Once you have figured out all of the above, you are finally ready to buy your car! Make sure to take your time and review the fine print. Understand everything in the final negotiation and your ready to drive away.