Your Starter Guide for Buying a Used Car
Whether you’re traditionally a new car buyer or looking for a used car that will last longer, there are affordable and reliable options out there for you. This is your starter guide for shopping for a pre-owned vehicle—what to look for, what questions to ask, where to buy from, and more.
DID YOU SAY AFFORDABLE AND RELIABLE?
Yes, there are used cars that will give you the security of a new car without the sticker shock. One of the best ways to find an affordable and reliable car is to look for a vehicle coming off a lease. (This includes buying out the lease on your own car.)
Why lease turn-ins? Terms for leased vehicles typically are three years and have miles restrictions. By buying a vehicle that was just leased, you get a car with lower mileage and more modern features, including more recent safety features. As a bonus, some of these vehicles may even still be under warranty.
With a new car, you pay the full value for it to depreciate as soon as you drive away. With a lease turn-in, the depreciation is built into what it will cost. In other words, you get a lot of the benefits of buying a new car without paying the price.
IS SHOPPING FOR USED CARS DIFFERENT THAN NEW VEHICLES?
As you might expect, shopping for a used car follows a similar process to buying a new vehicle. You’ll want to do your due diligence to make sure you end up with a car that fits your needs and your budget.
1. Determine how much you can afford. Calculate the maximum amount that you can spend. By knowing how far your dollar can go before you start shopping, you’ll be more likely to stick to your budget and less likely to fall in love with a car you can’t afford.
2. Do research ahead of time. With your budget in mind, you can see what options meet your needs. Which models fit your lifestyle? What look and feel do you like? What is the pricing in the current market? Gathering as much information as possible will help you in any negotiations.
Here’s where buying a pre-owned vehicle starts to differ from searching for a new car:
3. Set your parameters. Used cars add another wrinkle to car shopping—in addition to deciding on a make and model, you also have to factor in age and mileage. What’s the oldest car you’re willing to own? How much mileage do you want it to have? Knowing the answers to these kinds of questions will help narrow your search and make sure you get the right car.
4. Check availability. Unlike with new cars, you can’t simply order another used car off the assembly line. With only so many used cars of any given model, you’ll need to see how many are available that fit your parameters.
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5. Decide on a search radius. In addition to the car’s features—make, model, year, mileage, and pricing, to name a few key factors—availability will also depend on geography. Where are they located and how far are you willing to go? Choose your search radius accordingly when setting your criteria.
6. Have a Plan B. When buying a used car, you may not get your top pick. Check out a broader range of vehicles than you normally might during your research phase. You want to have a second choice in mind—just in case availability is limited.
WHERE SHOULD I BUY A USED CAR?
Generally speaking, you can buy a used car from three different types of sellers:
- Brand-name dealers
- Local used car dealers
- Private seller
We’ll talk more about private sellers shortly, but what’s the difference between a brand-name dealer and your local car dealership?
At a brand-name like Toyota, Subaru, or Chevy, you’ll usually see more used cars from within the past three to five years. This is because brands often have the first opportunity to “buy back” any vehicles they’ve leased and will keep the more recent models for re-sale.
With a large brand behind them, these dealers are also able to offer certified pre-owned vehicles, which gives you, the buyer, an extra layer of security and protection. Certified pre-owned guarantees that the car is mechanically sound. It has been inspected, retuned, and comes with a factory-backed limited warranty that is typically honored at any dealership under that brand.
These added benefits also make these cars more expensive. A local used car dealer will generally be able to offer you a better price because they’re not paying for a warranty. If you feel confident about evaluating the condition of the used car you’d like to buy, going local may be the best option for you.
WHAT IF I BUY FROM A PRIVATE SELLER INSTEAD OF A DEALERSHIP?
For a private sale, you want to be extra careful before pulling the trigger on a used car. The following steps are recommended for any used car that isn’t certified pre-owned but are especially important in a private sale.
Be sure to get a vehicle history report or look up the vehicle identification number (also known as VIN). Know everything that has happened to the car you’re about to own. You’ll want to see if it has been in any accidents, been in a flood, been recalled, or been stolen.
You should also request to bring it to a trusted mechanic. They’ll be able to evaluate its condition and identify any existing or foreseeable mechanical issues. If the car you’re looking to buy is far from your usual mechanic, find a local auto shop in the area to look under the hood.
WHAT ELSE SHOULD I KNOW ABOUT BUYING USED?
Your car insurance is one more item to inquire about before buying a used car. Your insurance rates could change based on the car you purchase. You’ll want to be able to factor this into your car payment costs when calculating what you can afford. Check with your insurance company to see what they’ll charge you for the kind of car you’re interested in.
No matter what kind of car you’re looking to drive, following this guide can help you make sure you end up in the right one.
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The views and opinions expressed in this blog are those of the authors and do not necessarily reflect those of VSECU.
About Joshua Dobrovich
Joshua is the consumer lending team lead at VSECU. He supports the consumer lending team in all areas of the lending process and helps members obtain credit and financing to achieve their personal goals. Joshua has an extensive background in automotive. He has been the service manager and, most recently, business manager at The Automaster Honda in Shelburne VT. Joshua and his partner Jennie have two awesome daughters Kyla and Rylin and live in central Vermont.