Buying a pre-owned car poses several advantages for the consumer, not the least of which is avoiding the steep depreciation of new cars. In fact, a new car is worth only about 37 percent of its original value after five years. But how do you get the best deal on a used car that suits your needs? Below are a few tips to get started.
Assessing Your Budget
Rather than focusing only on the down payment and monthly payment, consider setting an absolute maximum to avoid overspending. Also, don’t forget the additional costs of registration, insurance, taxes, and other fees. If you’re planning on a trade-in, it’s easy to get a rough estimate of your old car's value from the Kelly Blue Book website . (Note: Your car’s individual value may vary depending on region, vehicle condition, and other factors.)
Conducting Due Diligence
Two factors that can turn into major issues down the road are frame damage and water damage. A Carfax, Autocheck, Experian Automotive, or similar report will come in handy for assessing the car’s mechanical condition, and several pre-owned dealerships provide this report free of charge. Some details, such as smoke odors or damaged interior materials may not be immediately available in the maintenance history, thus it is always a good idea to physically inspect and test drive a car before purchasing.