How to Pay for a Used Car: 6 Tips for Purchasing a Used Car
Looking to buy a purchase a used vehicle? What are your financing options? Take a look at these top tips on how to pay for a used car.
Does your car make a new scary sound every day? The kind that makes you turn up your radio?
It’s time to look for a new car. And if that new car is going to be used, then you’re not alone. Each year millions of used cars are bought and sold. With so many options, buying used can be a great way to land an amazing deal on a vehicle. You just need to find one that not only meets what you need but fits into your budget.
Keep reading to learn what to look for when shopping and how to pay for a used car.
1. Do Some Research
The most important thing you can do before buying a used car is to do your research. It’s a huge mistake to show up at the car dealer not knowing which vehicle you are wanting to see. These days it’s very easy to find out just about anything you need to know about used vehicles online.
When researching, learn what the latest resale price was for that particular make and model. Knowing this information will be essential when you are bargaining the price of the car. If you are planning on trading in your current car, also research what the latest market values are for your car. This way you can make sure you are getting the best deal for your trade-in.
2. Check into Finance Options
Before you finance a used car at the dealership you should research car loans before even heading to the car lot. Receiving financing from the dealer will typically leave you paying interest rates that are higher than those you might receive at your credit union or bank. You should start by seeing what the rate is at your own banking institution since you might receive a discount for already being an established member.
There are also some online companies that allow you to receive more than one quote at a time. Once you have gotten your quote in writing you can present it to the dealer and use it to negotiate a lower interest rate for your vehicle.
You should also determine what your credit score is before shopping for car loan rates. This knowledge will play a role in the types of rates you will receive and can also be used as a bargaining tool for a better rate at the dealer. If you have a low score you can also work on raising it before purchasing your used car, this way you can get the best deal possible.
3. Look Around
If you have time, you should shop around at different dealerships before making your purchase. If you find a car you are interested in and begin negotiations, it is ok to walk away before committing to it. This way you will know for sure what that dealers rock bottom pricing will be.
You should also travel outside of your town to see what other dealers have to offer, especially if you live in a more rural location. You will often find better deals at dealers who are in a bigger area since they will likely have more dealerships to compete for your business with. They might also price their vehicles differently depending on their location.
4. Stick to Your Budget
Before you head out to the car lot determine what your budget will be for this purchase and how much you can afford for your monthly payments. This way you aren’t stuck paying for a car that you can’t afford and potentially putting your finances in danger.
You can use an auto loan calculator to determine what your monthly payments will be and for how many years. You should also plan on putting 10% down and only finance the vehicle for three years. This will help you pay off the car before the value depreciates too much so you can get a good value for a trade-in if you plan on purchasing another car afterward.
5. Negotiate the Terms
Purchasing a car is an important decision since you will be paying for the car for the next three years or more. This means you need to be prepared to do battle when negotiating the price and terms of the loan. It is important that you stick to your guns and not let the sales team stick you with terms you are not agreeing with.
First, you should start the negotiations by giving the salesperson a ridiculously low price you are willing to pay for the vehicle, then you will have room to negotiate with the price you are actually expecting. For instance, if they tell you that the payments will be a certain price per month for the next 60 months, tell them you want the same payment scheme but for a 48-month loan.
Negotiating can be fun or stressful for some people, just remember you don’t have to take any offers you aren’t comfortable with and be prepared to walk away. You might also want to practice your negotiating skills before you head out to the car lot.
6. Do the Paperwork
Once you have determined which vehicle is the right one for you and have negotiated what the terms are it is time to do the paperwork. At the dealership, you will most likely be offered add-ons to the vehicle such as an extended warranty or service plan. Make sure to review the terms of these plans and determine if it worth it for you to add it to the overall loan of the car.
You might decide you want the peace of mind of having an extended warranty, just make sure you are aware of the additional cost it might add to your loan. Review the sales contract thoroughly before signing to make sure the cost of the vehicle, sales tax, and license fees are all correct. Once you have made your review you are ready to sign and get your keys.
Learn More Today About How to Pay for a Used Car and Get the Best Deal You Can!
With the right amount of research and planning, you won’t have to worry about how to pay for a used car ever again. You now know the tricks of the trade and how to look and find the best deals.
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