OCT 25, 2022
Buying a car is a big investment. Know what you’re getting into when buying a used vehicle.
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Buying a car is a big investment. So, it makes sense that you’ll want to do everything in your power to make sure you’re getting your money’s worth when buying a used vehicle. While going through a used car checklist step-by-step may seem unnecessary, it pays to know what to look for when buying a used car. Let's take a look at some of the major aspects of what a used car is worth and how you can get a good deal.
Used cars can be great vehicles to consider when browsing the dealership lot. Cars are expensive, and opting for a used model rather than buying new is arguably the easiest way to save money when purchasing a car. While these used vehicles may not always carry the same factory warranty that a new car has, they have plenty of other benefits. For example, a used car's value doesn’t depreciate at the same rate as a new vehicle, and you are more likely to pick up a reliable make and model at a discounted price with some research.
To start your car buying process, you need to understand the used car purchase risk factors, how to get a pre-purchase inspection, how to check the car's history, and which financing options to pursue. All of these things are important when it comes to decision-making. With this in mind, the helpful tips below will get you started as you begin your search for the perfect pre-owned car.
As with any big purchase, it’s important to establish exactly what it is you’re looking for from your used vehicle. The production of gasoline-powered cars is slowly declining due to supply factors, and green energy initiatives have created a squeeze in the supply side of the used car market. Therefore, it’s important to know the vehicle you want before you hit the dealership.
Do you need a vehicle to transport a large family around? If so, you’ll find little use for a four-seater hatchback, and need to look into buying a larger van or SUV with 3rd row seating.
If the car will be used to move large items, you should look for a truck since it’s built to handle the extra storage capacity and weight.
If you’re looking to purchase a vehicle that will be cost-effective in price and fuel consumption, you’ll probably find that a fuel-efficient hybrid is a good option.
Next, create a list of your preferred vehicle brands so you can efficiently browse online listings, as well as car dealerships. Have several brands in mind so you will be able to compare and contrast different makes. When you find one of the vehicles on your list, ask the car dealership if they have one of the other similar cars you were also considering. Doing this helps cover the bases and make sure you will end up with the car you want when you finish searching for and test driving cars.
Thinking about refinancing your car? Caribou provides a fast and easy way for you to see refinance quotes. Pre-quality in minutes with rates as low as 5.99% APR**. Check to see if you can save on your car payments.
One of the things you have to be willing to forego when purchasing a used car is the idea that it will be perfect. It doesn’t take long for a newly purchased car to accumulate wear and tear after leaving the dealership. This is one of the reasons a new car’s value depreciates so much as soon as it leaves the lot, as it immediately transitions to a pre-owned vehicle. The best deals on used cars will be the ones which were serviced correctly, cleaned regularly, and generally kept in good condition.
Making sure the vehicle you want to buy was previously well maintained is a key purchasing factor. Ask if any multipoint inspections were performed on the vehicle. If the vehicle wasn't checked, or if you doubt its roadworthiness, try taking it to a mechanic to have them inspect the car before buying it. It may cost you a few hundred dollars, but it can be worth avoiding a faulty vehicle. They’ll have a far better idea of how the car has been treated in its lifetime, and whether there are any major defects that the seller hasn’t told you about. Many used cars are sold "as-is'', so you will probably have to pay for any repairs to any unidentified problems.
There are also some precautions that you can take without the help of an expert. Before signing any paperwork or making a deposit, examine the exterior and interior of the vehicle. Key things to look out for on the body of the car are dents, scratches, rust, and the paint quality. On the inside of the vehicle, look for stains, tears, damage, and wear and tear on the upholstery.
If you want to buy the car but find a few problems, try asking the dealer or auto broker if they can repair or fix the damage. Add those specific items into the "WE OWE" field when completing your transaction paperwork. Without those line item provisions, there is no obligation for them to fix the damage after the sale.
Test driving the car is also essential. During the drive, try to take the car up to highway speed or at least 50 MPH. Listen for clunks, bumps, other strange noises. If there are any problems with the engine, suspension, or drivetrain of the car, they’ll often become noticeable as you accelerate.
Used cars always come with a history. As a car buyer, it’s up to you to do your due diligence and check the previous records. You can easily look up a vehicle’s history report by running a CARFAX on the vehicle identification number, or VIN, number. The older it is, the lengthier the history will be. Make sure you review each page to see what repair work was performed, along with where and when. Vehicle history reports like CARFAX can tell you crucial things about a car like how often it was serviced, if it was repaired after an accident, or if it was registered in a different state.
To run a CARFAX, you’ll generally need to use the car’s VIN. If the VIN is not available, you can try using other information like a current license plate number. The majority of used car dealers will offer these reports for free, but you can run a report yourself online if buying from a private owner or a small independent dealer. The CARFAX may not include everything such as personal owner maintenance records, so also ask if there was any unreported maintenance and if those records are available as well.
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If you’ve managed to save up enough to buy a car outright for cash, then you’re all set to make your purchase. However, there are options if you want to take out a loan. You can often work with the finance manager at the dealership, or you can arrange financing with a local bank. When looking at finance options, shop around for a pre-approved financing offer which puts you in the driver’s seat in more ways than one. Having a pre-approved loan means you can immediately shop for cars within your budget since your funding is ready to go!
Ultimately, you’ll need to find a financing option that suits your budget. Lenders consider used car loans to be riskier than new car loans, so you may have to pay a slightly higher interest rate as compared to buying a new vehicle. Try shopping around and comparing offers so you’ll have more chances of finding an option that has a good interest rate and a repayment option that fits your budget. You can also try refinancing your car at a later date to try getting a better interest rate or a lower monthly payment.
As you can see, following these steps when buying a used car can help you get a good deal. Start by making sure the price you are paying is how much the vehicle is actually worth. Putting in the time and effort can help you save money, find the right vehicle, and avoid maintenance issues further down the line. Also, make sure you’re getting a car within your budget. Finally, complete the basic inspection, test drive, and auto maintenance checks. Doing these things will put yourself in the best possible position to get a good deal.
What is the best way to check a used car's history? The best way to check a vehicle's history is by using a comprehensive report like a CARFAX report which records things like past registrations, accidents, maintenance records, and insurance claims.
How much is a used car worth? As a car buyer, you can check the average market price of a car by entering the year, make, model, and mileage into a valuation tool. This is a good idea to do before buying from a dealer or private party.
How much will a car depreciate? The value of a car often depreciates by around 15% each year. Remember depreciation can be inversely affected by things like inflation or increasing market demand which can drive the value of a vehicle up so that it is worth more.
* This information is estimated based on consumers whose auto refinance loan funded through Caribou between 11/1/2022 and 9/1/2023, and had an existing auto loan on their credit report. These borrowers saved an average of $115.58 per month. Refinance savings may result from a lower interest rate, longer term, or both. There is no guarantee of savings. Your actual savings, if any, may vary based on interest rates, the repayment term, the amount financed, and other factors.
+ To check the refinance rates and terms you qualify for, we conduct a soft credit pull that will not affect your credit score. However, if you choose a loan product and continue your application, we or one of our lending partners will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
++ Social security number is required should you choose to move forward in the loan application process.
** APR is the Annual Percentage Rate. Your actual APR may be different. Your APR is based on multiple factors including your credit profile and the loan to value of the vehicle. APR ranges from 5.99% to 28.55% and is determined at the time of application. Lowest APR is available for a 36 month term, to borrowers with excellent credit. Conditions apply. Advertised rates and fees are valid as of 11/16/23 and are subject to change without notice.
Terms and Conditions apply. Caribou reserves the right to modify or discontinue products and benefits at any time without notice. Participating lenders, rates and terms are also subject to change at any time without notice. The information you provide to us is an inquiry to determine whether our lenders can make you a loan offer. If any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. We do not guarantee that you will receive any loan offers or that your loan application will be approved. If approved, your actual rate will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Offers not available in MD, MS, NE, NV, WV.