Let’s state up front that there’s no simple formula for success in buying a used car. Whether dealers call them “pre-owned” or “certified,” they are still and forever used, which means you need to uncover the car you want’s history and treatment as best you can.
We already covered some of the basics of dealing with dealers, car-selling scams, and some buying-and-selling tips. Today we’ll look at a plan of action for buying from a dealer and link you to some online resources and tips.
Let’s say you have decided to buy a two-year-old used Honda Accord, because: a) you can get a warranty from a dealer; b) you’ll save big on depreciation over a new car; c) there are several Honda dealers in your area with the model you want on their lots.
Here’s a plan of action:
1. Learn everything you can online and in conversations with knowledgeable car people about the model of your choice. Compare similar models and competing brands. Read reviews to enable yourself to choose the right car.
2. Get a feel for the local market for this car. Use the CarGurus DealFinder, Kelley Blue Book and NADA Guides to determine a ballpark price that you’re willing (and able) to pay. Print out specific deals and price quotes.
3. Shop for financing and get pre-approved before you go into any dealership. Affordability calculators are helpful.
4. Go shopping and visit several dealers. The best time to buy is usually the end of the month. The more inventory they have, the greater the pressure to sell to you.
5. Find out all you can about the car you want, including former owner history, service records, dealer inspection, VIN history, etc. Don’t even look at “as is” cars. Never reveal your bottom-line price to a salesman.
6. Do a thorough test drive and get a mechanic to inspect the car. Here is a good checklist of things to note. On the test drive, check braking, cornering and acceleration, ride, rattles and noises. Don’t overlook the transmission, one of the costliest elements in a car.
7. Negotiate only with a salesperson who makes you feel comfortable. Take your time, and don’t “lowball” for the car; know your limit and stick to it. Walk out if you have to. Don’t get distracted by special offers. You must control the process.
8. Unless a dealer can offer you a very special deal on financing, you are better off with a bank or credit union. Don’t let the Finance and Insurance person sell you on extras (extended warranties, alarms, insurance) you don’t need. Question any and all taxes and fees you don’t understand.
We may have made the process a little more adversarial here than it sometimes is. The most important thing you can do to set the tone in your favor is to demonstrate your knowledge of the car at hand, the market, and the financing process.
Have you bought a used car from a dealer recently? Please tell us about your experience.