This time of year is always exciting, full of vibrant colors and sounds. Shopping for a used car in the spring presents its own challenges. But, there are still plenty of great deals out there, waiting for you to find them. Here are a few tips to ensure you’ll get the best deal possible this spring.
Compare Financing Options Before Making Any Decisions
One of the most impactful factors of car shopping is your financing agreement. If yours has bad terms, even inexpensive cars can cost a ton. Many shoppers feel limited because they haven’t maintained excellent credit scores. However, you can still find good financing deals if you invest the time to find them.
Up to five million borrowers fall into the subprime category each year. Typically, this is anyone with a score between 580 and 669. That’s 17% of all new auto loans made in that time frame. Yet, a further 16% of borrowers have credit scores below 579.
When shopping for a used car, first apply for financing at several locations. They’ll send you a pre-qualification letter if you’ve met their criteria. Once you’ve seen a few offers, it’s easier to know which one has the best terms.
Thankfully, if you’re worried about low credit scores, shopping used should be easier. Usually, used cars have already experienced most of their depreciation, limiting lender risk. That’s why it’s easier for subprime borrowers to get credit for used purchases.
If you have time, improve your score as much as possible. The higher it is, the better your financing terms. Also, try to bring a larger down payment whenever applying for a loan. Most lenders provide better terms when they’re given larger down payments.
Consider Shopping Online While Searching for a Vehicle
Everyone knows the dealer wants nothing more than to get you down on their lot. You can avoid most negotiations by shopping online with an online car retailer like Carvana first.
Additionally, there’s plenty of help online if you’re unsure about a car’s pricing. Compare what the dealer is offering to what’s listed by reputable sites like KBB.com. They’ve created lists of the national average for used car prices. Using their list while shopping can make it easier to spot predatory dealers.
Also, it’s simple to research a car’s maintenance history if you’re on the internet. Seeing if it’s had a history of accidents is always a good idea. You can leverage that to get a better deal if it has been in any.
Research the Reliability of Anything You’re Buying
The hardest part of buying used is ensuring it’ll be a reliable vehicle. Sometimes, you can end up buying something with lots of issues left by the previous owner. Even if they’ve taken care of it, some models start having issues once they’ve gone so many miles.
Consumer Reports has a database of vehicle reliability data gathered from their users. As a result, they’ve provided access to data on more than 300,000 vehicles. On their site, they’ve categorized issues by type, making them easy to search.
Compare whatever models you’re considering to their listed averages. If something has more problems than usual, it’ll show up in their reports. Avoid anything that has frequent issues if trying to minimize long-term ownership costs.
Learn How to Inspect a Car Yourself
Even if it has a reliable history, that doesn’t mean a car is in good shape. Some owners trade cars in without taking care of them during their time of ownership. Unfortunately, that leaves the next buyer in a bad spot once the problems become evident.
The easiest way to avoid buying a lemon is by closely inspecting everything before buying it. Most of the time, it’s not hard to see if something will have issues. Start by looking at the car’s exterior, inspecting for signs of damage.
If you spot an area that seems to be patched, use a magnet on it. Patched material usually isn’t magnetic. You can also look for paint spots left near the seals around the trunk and hood. When there’s paint left there, it typically means there’s been a patch.
Next up, take a look at the doors and trunk. Open and close them carefully while listening for any sounds. If there’s any resistance while opening them, ask the dealer about it.
We’d recommend paying extra attention to the car’s tires, too. If it has worn sidewalls, you’ll need to buy new tires soon. Tires must have at least 1/16 inches of tread to be street legal as well.
Look for Issues While on a Test Drive
If everything looks good from the outside, a test drive is in order. Turn on the car and look at its dashboard while it’s cranking. Usually, the lights should flash on for a few seconds before turning back off. If there’s a problem, the check engine light might remain illuminated.
Before pulling away from the lot, test out the car’s accessories and air conditioner. See how long it takes for the heater to adjust after changing the temperature, too.
If you pop the hood, you can inspect the hoses and belts. Sometimes, they’ll develop leaks. Check out how they feel by touching them with your bare hands. When new, hoses and belts feel firm to the touch. As they get older, they’ll begin to feel cracked and mushy.
Finally, take it down the road and listen to how it sounds. It should switch between gears without any friction. Plus, there shouldn’t be any flickering if the headlights are on.
Ask the Dealer to Thoroughly Explain Contract Terms
The Consumer Financial Protection Bureau registers complaints against dealers every year. They’ve handled thousands of issues regarding fraudulent contracts. So, it’s vital to understand everything on yours before signing anything.
Once you’ve found a car you’d like to buy, request an itemized contract from the dealer. They have to send you one with everything listed on it along with its price. Occasionally, it’s possible to negotiate to reduce what’s charged for specific items. Some items are nonnegotiable, though.
Always read through contracts in their entirety. Then, request a copy after signing. Compare it to what was listed on the one you saw previously. If there are any changes, you’ll need to notify the Federal Trade Commission. Changing terms after someone has signed a contract is fraudulent.
Calculate the Lifetime Cost of Ownership
Some cars have low sticker prices, but that doesn’t mean they’re always affordable. If they’re expensive to maintain, they could end up costing more than one with a higher sticker price.
Kelley Blue Book lists data on the lifetime ownership costs of many vehicles. Use their tool while shopping to see what it would cost to own a particular vehicle. If it’s within your price range, then it’s probably a decent deal.
