Because of the recent economy, new car sales have declined and individuals are holding onto their used cars. This results in higher prices for used cars. Here are a few tips for getting the best deal, calculating your budget, and managing hidden expenses.
Affording a Used Car For Your Family
Before you decide on your budget, write out a list of all of the expenses involved with your car purchase. This includes items such as gas, insurance coverage, oil changes, and minor repairs or upgrades. You will also need to include the cost for tolls, parking, state licensing, state and local taxes and the monthly payment that comes with your car loan. Additionally, if you’re buying a used car without a warranty, you should have an “emergency” fund to maintain any unexpected issues. After all, having an affordable car for your family isn’t so great if you can’t afford to take care of it. When you’ve added up all of the costs of your new(ish) ride, it’s time to create a realistic budget. If you’re getting a loan for a used car, how much can you actually afford? What amount can your budget withstand and what are your plans for using the car. Will you use it as an A-to-B car, or will you drive it on multiple vacations and strenuous adventures. There is no fun in having a car if you can’t afford to go anywhere because of the cost.
Finding Low Rates on Used Car Loans
You may qualify for lower loan rates if you go through your current financial institution. Community credit unions frequently offer the best rates, but make sure to shop around. Some dealerships will do the rate comparison for you by submitting your information to multiple lending institutions at once. A difference in 1% on your interest rate can make a big difference in the amount of the purchase versus the total amount you pay for the vehicle. Make sure to check your credit score. You may be turned down for a loan if you have bad or no credit. Although, if this is the case, you aren’t completely out of options; there are plenty auto loan companies like Auto Credit Express that cater to individuals in your situation, though always make sure that they are accredited by the Better Business Bureau.
Look Online and at Rental Car Agencies for Low Prices
The Internet is your friend, especially when it comes time to conduct research on what used cars are available in your price range. Check approval ratings for different makes and models, research safety features that are important to your family and find out what common issues and problems the vehicles you are interested in may have. Use the web to help you narrow down your options and figure out how much your used car should cost … regardless of the sticker price. An informed consumer will almost always get a better deal. Consider purchasing a car previously used as a rental car. Although these cars probably have higher mileages, the typical rental car driver is well over 25 and drives conservatively. Additionally, these cars are serviced and maintained consistently by the rental car company. Rental cars are usually sold in the fall, when new models come out.
Another great destination for used cars is Craigslist. Beware, though … these cars come with no warranty. It may be worth the investment of paying a mechanic to examine the car before you purchase it. Make sure you have a mechanic you trust, as these professionals are paid for performing services on your vehicle, and may inflate estimates of repairs needed in order to generate a larger bill. A final favorite for finding bargains is eBay. If you’re in a larger metro area, thousands of cars can be found on eBay. Again, these cars are usually sold “as-is,” so make sure to assess the condition of the car before purchasing. Remember that an affordable used car is an investment for your family. Although it won’t appreciate, you should be able to look forward to driving the vehicle for years. Your grade-school kids may fit in the backseat now, but will they fit as well as teenagers? Make sure any used car you buy is big enough to meet your family’s needs as your family continues to grow.
Photo courtesy of: Nicole S