How to Buy a Used Car, Step By Step

You’ll have to purchase the report if you’re buying from a private seller, so wait until you’re seriously interested in a particular vehicle. If you’re buying from a dealership, the salesperson should provide a copy of the vehicle history report for free.
These tips will give you some guidance to make a good choice.
Montoya said plans sold by auto manufacturers or reputable dealerships are better options than those sold by third-party companies. Make sure you understand exactly what your plan covers.

Why Buying a Used Car Is a Smart Money Move

For any dealer you visit, do some due diligence and check customer reviews online. If you know others who’ve recently purchased a car, ask for recommendations.
The end of a model year — around September or October — is another good time to shop, DeLorenzo noted, as salespeople are looking to make deals to clear out their used vehicle stock to make room for new inventory.
Buying an extended warranty or service plan can give you peace of mind that certain repairs or maintenance jobs will be covered.
“Severe accidents and instances where a car has been declared a total loss should signal the buyer to use caution,” he said. “That said, a small fender bender shouldn’t always mean that a buyer should walk away from a great deal.”
But don’t just assume a car’s history. Getting the car’s history report, such as through Carfax, is a crucial step when buying a used car.
Nicole Dow is a senior writer at The Penny Hoarder. Former staff writer Carson Kohler contributed to this post.
Don’t just look at the tires’ tread. Each tire should include a four-digit number marking the month and year it was manufactured. Tires older than six years can be dried out and need replacing.

The Best Time to Buy a Used Car

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If cost is your primary concern, a private seller is likely to offer a lower price. A dealer folds overhead, repairs and marketing into its price.
Of course, when you need a car might not align with a particular sale or time of month. Shopping for a vehicle before you’re in critical need of one will allow you time to search for the best deal rather than having to settle for something quick.
Sharifi said to watch out for discrepancies with the odometer reading and if there’s a branded title, which indicates that the car has been significantly compromised in some way.
Be wary of independent car lots that boast they can make you a deal regardless of your credit or circumstance.
“The end of the month (or the end of a quarter) can also be a good time to strike a deal, since dealerships may need to hit monthly or quarterly sales goals,” he said.
Before you accept a sales price, research the value of the car to make sure you’re not overpaying. Carfax, Kelley Blue Book and Edmunds all have price appraisal tools online.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
DeLorenzo recommends pre-qualifying for a loan at a bank or credit union before visiting a dealership. You can compare the offer with the dealer’s financing terms for better negotiating leverage.
Matt DeLorenzo, senior managing editor for Kelley Blue Book, said when dealerships host big sales events for new models that can also benefit used car shoppers.

FROM THE SAVE MONEY FORUM

Where to Shop for a Used Car — and Where to Avoid

Where you shop for a used car matters so you can avoid purchasing a lemon.
When you’re buying from a private party, you may be able to get more accurate information about how they’ve driven and maintained the vehicle and what particular issues it might have, said Ron Montoya, senior consumer advice editor at Edmunds.
Knowing when and where to buy a used car is just half the battle. Figuring out how to vet a used car can be tough, especially if you have little to no car knowledge.
The older a car is, the cheaper it’ll be — but the more it’s likely to have issues requiring repair. Everyone has a different comfort level when it comes to what they’re willing to handle. A general rule of thumb is that a car is driven about 12,000 miles per year. A higher average could mean the car has more wear and tear.

Pro Tip
“In the first year of ownership, depreciation can continue, and that same car could be worth up to 20% less than its original sale price,” he said.

Montoya said used car buyers must strike a balance between the age of the car, the amount of miles and what price they’re willing to pay.
However, there are certain times when you’re more likely to score a better deal.
“You want to make sure there’s enough room for you,” Montoya said. “Take a look at the cargo area. Take a look at how easy it is to see out of the vehicle. Test out the entertainment system.”
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However, you also need to be OK with buying the vehicle as-is and securing your own financing. And be sure the owner has clear title to the car — in other words, don’t let anyone sell you a car they don’t legitimately own.

What to Look for When Buying a Used Car

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You can also compare similar vehicles on the market to get an estimate of a car’s value, but keep in mind, no two used vehicles will be the same due to how they were driven and maintained. Use all this information when you sit down to negotiate — and don’t be afraid to walk away if you don’t think you’re getting a fair price.
Knowing the ins and outs of how to buy a used car will make the whole process less stressful and, most importantly, save you money.

1. Find a Vehicle That Fits Your Needs

Sometimes just looking at a car will give you some idea of its history. Rust, worn out pedals and a side panel painted in a different color are red flags.
DeLorenzo recommends shopping at franchised car dealerships that have certified pre-owned cars — used vehicles that have been thoroughly inspected and typically come with some type of warranty coverage. Non-certified cars aren’t bad — and they’ll typically cost less — but they’re more likely to have higher mileage and more maintenance needs.

2. Determine How ‘Used’ You’re Willing to Go

Unlike new car releases, used cars come on the market throughout the year. It all depends on when their previous owners end their leases, put them up for sale or decide to trade in their vehicles.
It’s best to avoid shopping for a car on the weekend when there’s an influx of customers and sales staff is spread thin, Sharifi said. You’ll get more attention from the sales team by visiting on off hours, specifically on weekdays.
Those vehicles often have low mileage and are in great condition, having had only one previous owner. Sometimes they even still retain a hint of that new car smell.

Pro Tip
“Typically they’ll try to get you in with a low price, but you may not be getting the best quality car,” he said. “The other thing is that if you get your financing through those types of dealers, they typically charge you a much higher interest rate.”

3. Make Sure The Price is Right

According to Kelley Blue Book, the average price of a new car in November 2020 was more than ,000. Yowser.
New cars are sleek, shiny, full of impressive tech and smell amazing — mmm, new car smell. But they also come with price tags that can take your breath away — and not in a good way.
So that covers the why. Now let’s get into how to buy a used car.

4. Check the History of the Car

For any used car purchase, but especially if you’re buying from a private seller, have your mechanic inspect the vehicle before committing to buy.
When you’re budgeting for a car purchase, make sure you’re factoring in all the associated costs, like sales tax, insurance and getting the car registered.
Always, always, always take a car for a spin before buying it. If you can bring a mechanic with you, even better.
Think of the big sales that fall around holidays like Memorial Day, Fourth of July and Labor Day.
“[Dealerships] will have more used vehicle inventory as a result of those types of promotions,” he said.

5. Go for a Test Drive

Outside of dealerships, look for cars online at trusted sites like Autotrader, Kelley Blue Book, Carfax or Edmunds — or buy from a private seller.
Just because you’re buying a car at a lower price point doesn’t mean you’ll be stuck with a clunker that was manufactured decades ago. Cars that are just two or three years old often hit dealership lots when their previous owners reach the end of their lease.

Pro Tip
If you’re in the market for a set of wheels that’s more affordable, steer your sights over to the used car lot to save a little money. Or even a lot of money.

Jim Sharifi, formerly a content editor at Carfax, said research shows a new vehicle can lose as much as 10% of its value within the first month.
It’s easy to focus on the numbers — age of the car, mileage and cost — but you also want to make sure you’re buying a car that’ll fit your needs for however long you expect to have it. If you have a growing family, you might want to rethink that two-door coupe or compact vehicle.
“Some general things you can do on your own without being super knowledgeable about cars is [to] turn off the radio [and] listen for any strange noises,” Montoya said. “See if the steering wheel stays straight when you drive down the road. Does it pull to one side? Look at the tires to see how old they are.”
If you’ve ever heard someone refer to a car as a depreciating asset, it’s true. The longer you have a car, the less it’s worth. The first year of owning a new vehicle is when depreciation really packs a punch.
When you buy a used car, the original owner has already taken that initial hit on depreciation and the price you pay accounts for that, so you don’t have to shell out as much cash.

2020 Destroyed Your Personal Cash Flow. Here’s How to Rescue It

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If you’re like most of us, 2020 did a number on your cash flow.

What is cash flow, you ask? We’re so glad you asked! Cash flow refers to the money that’s constantly moving into and out of your bank account.

Your paychecks (assuming you have work) flow in, and your payments (for food, housing and everything else) flow out.

For many of us, the COVID-19 pandemic has torn a hole in our finances, mucking everything up. Whatever has your cash flow bottled up, we’ve got six suggestions for improving it, one step at a time.

1. Stop Paying Your Credit Card Company

Credit card debt will destroy your cash flow. And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates. But a website called AmOne wants to help.

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2. Get Paid Every Time You Buy Groceries

Grocery shopping was never exactly pleasant. But these days, it’s a downright struggle — wondering about your personal safety, maintaining six feet of distance from other customers, etc. Shouldn’t you have something to show for it?

A free app called Fetch Rewards will reward you with gift cards just for buying toilet paper and more than 250 other items at the grocery store.

Here’s how it works: After you’ve downloaded the app, just take a picture of your receipt showing you purchased an item from one of the brands listed in Fetch. For your efforts, you’ll earn gift cards to places like Amazon or Walmart.

You can download the free Fetch Rewards app here to start getting free gift cards. Over a million people already have, so they must be onto something…

3. Make Sure You’re Not Overpaying

Here’s another way to improve your cash flow: Stop overpaying for things.

Wouldn’t it be nice if you got an alert when you’re shopping online at Target and are about to overpay? That’s what this free service does.

Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.

Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.

In the last year, this has saved people $160 million.

You can get started in just a few clicks to see if you’re overpaying online.

In this illustration, a car drives on a road that's between mountains and water.

4. Knock $540/Year From Your Car Insurance in Minutes

Speaking of overpaying for things, when’s the last time you checked car insurance prices?

You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.

A website called Insure makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options — and even discounts in your area.

Using Insure, people have saved an average of $540 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

5. Add $225 to Your Wallet Just for Watching the News

This is a historic time for news, and we’re all constantly refreshing for the latest news updates. You probably know more than one news-junkie who fancies themselves an expert in respiratory illness or a political mastermind.

Research companies want to pay you to keep watching. You could add up to $225 a month to your pocket by signing up for a free account with InboxDollars. They’ll present you with short news clips to choose from every day, then ask you a few questions about them.

You just have to answer honestly, and InboxDollars will continue to pay you every month. This might sound too good to be true, but it’s already paid its users more than $56 million.

It takes about one minute to sign up, and start getting paid to watch the news.

6. See if You Can Get More Money From This Company

Here’s the deal: If you’re not using Aspiration’s debit card, you’re missing out on extra cash. And who doesn’t want extra cash right now?

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In summary: Take these six steps and watch your cash flow improve.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com