The Ultimate Resource When Buying A Used Car
According to a study by “The Car Connection,” the average used vehicle has around 65,000 miles on it, is between 6 and 8 years old and sells for $20,000. That’s far different from the stereotypical jalopy-selling dealers of yesteryear.
This shift towards newer, higher quality vehicles has improved professionalism in our industry. A combination of new laws and industry support have made new research tools available, which, together with an old fashioned test drive and mechanical inspection, can take the worry out of buying a used vehicle. Here’s everything you need to know about buying a used car in today’s environment, from finding the right dealer to figuring out financial terms.
Where should I buy my car?
It’s best to begin by deciding which dealers you want to work with. Doing some research up front will pay off in the long run.
1. Do you have any trusted family or friends who have recently bought a car? What was their experience? If not, look for dealers who have value integrity above all else and can provide lots of great testimonials.
2. Check to see if each dealer is a part of the community. You don’t want to buy from someone who could easily close up shop once their reputation causes their sales to slide.
3. The age of a dealership can give you insights into quality of service as well. Is the dealership new? Did the owners start under a new name after having a failed dealership?
4. Finally, check online reviews. As with anything impersonal, these should be taken with a grain of salt, but they can still be useful. If the bad ratings far outweigh the good, this should raise some red flags.
Dealers tend to specialize in certain type of vehicles, so it helps to keep tabs on dealerships that sell the sort of car you’re looking for. For example, S & T Motors sells cars that are practically new with few miles, and, in most cases, still covered by factory warranties.
Next, try to narrow down your search to a few models. Before you hit the car lots, ask yourself these questions:
How much money do I want to spend? Would I be willing to pay a higher price if I can keep a lower monthly payment over a longer term? Do I have a firm total spending limit?
What features are must haves and what can I do without? Identify the options and equipment you want so you can narrow down the list of cars you want to look at.
What issues should I be aware of? Reliability studies and enthusiast forums are both excellent sources of information about common problems and their remedies.
Finding Out the History of a Vehicle. First, look at the windows.
The Wisconsin state law requires a Buyer’s Guide to be posted on the window of any car for sale by a dealership. This includes basic information like the vehicle model, VIN and if there is a warranty included with the purchase. Some newer cars will have a transferable factory warranty, while we will also offer our own warranties.
Any car sold by a dealer in Wisconsin must also have a Wisconsin Buyers Guide, sometimes called a “Vehicle Disclosure Document,” on one of the windows. This guide is a standard form that lists any issues the dealership should reasonably know about based on a visual inspection, test drive and any paperwork that came with the vehicle.
Next, ask about the title. There are a few terms to look out for:
Buy Back – This is a car that was purchased new, then bought back from the manufacturer according to the “Lemon Law.” Cars that have been bought back have to give notice of this on the title: on a Wisconsin title, it will say “Manufacturer buyback/lemon.” Prices are generally comparable on these vehicles, so it’s important to look. The buy back indication will also stay on the title, which can mean lower resale values down the road.
Salvaged vehicle – The vehicle was sent to a salvage yard for any reason. We recommend avoiding salvage titles for the most part.
Inspecting the Car – A lot of problems can be found before taking off for a test drive. Do a quick walk around and look at these items:
Tires – Uneven wear can be a sign of suspension problems or the need of an alignment.
Lights – Do they work properly? Are the lenses hazed or fogged? Pay particular attention to HID and LED lights since repairs can be pricey.
Interior – Do all of the seats move properly? Does everything function on the dash? Are any of the warning lights on after the car has been started? Does the parking brake engage and disengage easily? Does the cruise control work? What about the air conditioner?
Exterior – Is there any bubbling paint that could indicating rust? Are there signs of mismatched paint or ill-fitting body panels indicating repairs after an accident?
Under the car – Are there major signs of rust? Are the bushings on the suspension and steering rack intact? Do the boots on the CV axles and steering rack have tears? Is the transmission or oil pan covered in fluid?
Should your mechanic look at the car? Absolutely! The dealer shouldn’t have any problem with a third party looking at the vehicle to calm any fears about its condition. Even if the dealer did a thorough inspection, there could be something that they missed that will be noticed by a professional mechanic.
Drive it like you would day-to-day. Have a highway commute? Do some high speed cruising. Drive mostly in town? Do some stop and go driving. It’s important to pay attention to any odd noises or vibrations, but you should remember that this is also the time when you figure out how this car will be used. That means asking a lot of questions that may apply to you, but might not apply to a lot of prospective drivers: How hard is it to mount a car seat? Is it wired for trailer lighting? Does it have a hitch? Can you fit a set of golf clubs in the trunk? Can you mount a bicycle or a kayak on the roof? Is the load floor in the trunk or the hatchback too high? If it has removable or foldable seats, can you move them easily? Is there plenty of space for rear passengers?
Ok, so you’ve finally found the car you want, but how are you going to pay for it?
It may be worthwhile to talk to your bank about being pre-approved to have some idea of your financing options, but it’s also a good idea to talk the dealer about finance as well. They can contact local banks as well as institutions that specialize in used car loans, doing the legwork to find you the best deal.
When it comes to down payments, there’s one factor that makes a huge difference between new and used car loans. A new car depreciates as much as 40% over the first three years of ownership, and it can take quite a while for payments to catch up with this depreciation. Until then, if the car is in a serious accident, the fair market value the insurance company will pay for the car will be less than the loan, leaving the buyer with a payment despite losing the car. On the other hand, since a used car’s price has already depreciated, the owner can get equity in the car sooner which means much lower risk. In other words, it’s much safer financially to make a small down payment on a used car than a new one because the loan won’t be underwater for very long. That’s not to say a big down payment is a bad idea: it means getting equity in the vehicle faster, and it can help secure a lower interest rate.
What about “Buy Here Pay Here” dealerships? These dealers do the financing instead of the bank, and they usually require the buyer to visit the office to pay rather than mailing payments or transferring money online. Requirements for a loan are minimal, usually requiring little more than an address and a stable work history, but interest is often well into the double digits. Unless you have terrible credit and can’t get a traditional loan, it’s best to avoid this type of financing.
Here are the basic takeaways:
Do some research on dealerships. Are there a lot of customer complaints? Do they deal in the type of vehicles you are interested in? Are they TRUSTWORTHY?
Figure out which vehicles and features you want as well as how much you’re willing to spend before you start shopping. This will help you avoid a purchase based on emotion or persuasion.
Know what to look for on the paperwork. The title can have some useful information, but it’s not always reliable. Fill in the gaps with a 3rd party vehicle report and the vehicle disclosure document.
Take a close look around the car for any obvious faults from obvious accident damage to malfunctioning accessories. If you can, have a professional mechanic check it out as well.
Take the car on a test drive that simulates your daily driving habits and make sure it will fit your individual needs.
A bigger down payment will help keep finance charges low, but it’s not a deal breaker on a used car. Avoid “Buy Here Pay Here” loans unless you have no other option.
Visit S & T Motors, a family business with over 26 years of experience and knowledge working for you. Established in 1998 with a high level of integrity and satisfaction as our main focus. We specialize in quality late model vehicles, many of which are one-owner units and most with the balance of factory warranty. We take a great deal of pride in how we conduct our business, and at S&T Motors you work with the owner. We strive to give you the very best in your car buying experience, never any pressures or hassles, and our prices are always posted upfront. No need to negotiate. Our low overhead assures a great buy every time! Buy with complete peace of mind and confidence. Our reputation is our most precious asset.