[Complete Guide] the Smartest Way to Buy a Used Car

Contents

Steps to buying a used car

Hey, I know you’re the smartest way to buy a used car so let’s not waste any more time. The best used car deals right now, are not far-fetched. What you need to do first is to figure out what vehicle may best suit your lifestyle.

(Step 1) How to figure out the best car for your lifestyle

What are you? Are you a mom with kids, college student, Photographer, Dancer, Musician, Carpenter, alright you get the point that I am trying to make.

Example: Busy mom of 3 would you purchase a civic or would you go for the SUV or Minivan. Obviously the Minivan or SUV.

Here’s a little activity that will get your mind moving towards the best car that suits your lifestyle. Take out a sheet of paper or use your notepad on your smartphone to write out all the possible things that you will be doing with your vehicle.

Alright, that little activity should be complete now. Out of all the things that you’ve written out, the activity in your life spells out the right car that’s right for you.

Let’s say a carpenter with 3 kids did this activity and all he notices his activities are is doing side work on the weekends. More likely the carpenter is looking for a truck with an open bed to carry all of his tools and has four doors to carry his family too.

(Step 2) How to figure out what car you can afford

Once step one is complete carry your vehicle selection over to step 2. Example let’s say you chose an SUV. Depending on the year make model and condition of the vehicle is what determines the price that you’ll pay.

If I were you, I would not be too brand focus. Meaning you don’t just look at Nissans only. The best deals are found in all brands of vehicle, you just have to be open-minded.

You may already be asking this question. Should I pay cash for my car or finance it?

I would always prefer to pay cash for all my vehicles. For special situations like not having enough credit score needed for an auto loan, cash is definitely the way to go.

If you have a decent credit score like saying a 700, I am pretty sure you can go ahead and drive just about any vehicle of any used car lot.

Besides the credit score, there is also another method that I like to use called the income to vehicle ratio. In a short summary that only means can you drive a particular vehicle based on your income.

Let’s be honest some people don’t have the necessary income to drive a particular vehicle. Example: A person who works at Walmart who is a cashier driving 2013 Mercedes Benz s65 AMG. I am not exaggerating I’ve seen similar situations like this example. Let just say the steering pump took a crap. Just take look at the price for the steering pump

At $1,145, take into consideration that this is not a dealer price so it’s at least $1000 less than the car dealership. The income to vehicle ratio is as followed.

Income to vehicle ratio

If you neglect to calculate your monthly expenses really bad things happen

I can’t stress enough how important this process is before considering a large purchase such as a car. I’ve sourced out this really helpful home bills calculator to give you a clear understanding of if it’s even smart to add more debt to your monthly expenses.

Have you ever seen a tow truck dragging a car with its tires screeching? That’s because it was just repossessed from a car owner who could no longer afford to pay the car note. Bad things like car repossession are something you do not want on your credit history because it affects all other areas of your life.

How to figure out car payment with interest

Bankrate.com has a very helpful auto loan calculator. If you decide to finance a used car, it is critical to know how to figure out car payment with interest so you can afford your car for the long run. I’ve seen situations where car shoppers are so desperate to buy a car and not realizing the fine print that sometimes increases their car loan interest rate.

How to get a good interest rate on a used car

There is no way around this, and there is no secret to a good used car loan. Your credit score is the most important factor in getting the best car loan rate. Many shoppers make the mistake of going to the car dealership and applying for a car loan before checking their credit report and score.

By checking your credit score ahead of time, you will know where you stand before seeking a lender. If you have an excellent credit score, you should expect the best car loan rate possible.

Do not expect the lender to tell you that you could save money by applying for a loan elsewhere. Make sure you do your homework before applying for the loan. The little time that it takes to receive your credit report from the three major agencies could end up saving you a lot of money.

Understanding Your Credit Score

Your FICO credit score is more than just a number. Understanding how your credit score is determined can help you to maintain or improve your credit rating. Most credit scores will range in number from 300-850 points. The higher your number, the better your credit rating. Your credit score will be determined by five different categories. Some items will have a greater effect on your credit score than others.

1) How timely you pay your bills carries the greatest amount of weight on your credit rating. While it is a good idea to always pay your bills on time, lenders will look more at your recent payment history.

2) The amount of debt- lenders will look at your total debt and the outstanding debt on your credit cards. It is a good idea to keep credit card balances well below the maximum amount allowed.

3) The length of your credit history- how long have you had open credit accounts? Do you use a credit on a regular basis?

4) How many credit accounts do you have open? What types of credit accounts do you have?

5) Recent credit inquiries and newly opened accounts – lenders will look unfavorably on your credit record if you have had numerous recent credit inquiries or if you have opened several new credit accounts in a short period of time.

(Step 3) Where to find the best places to buy used cars

Ideally, you want to shop locally for a used car, but you can buy a car online from another state and have it shipped to you. I am a little against that. What you can do if you want to buy a car from out of state is find one similar to the one that you are interested in to see if you like it. Drive it to get the feel of it, and see its features in person.

Remember if you do choose a car using this method please keep in mind that the car you selected is going to be different. It might be a little worn, or better than you expected it to be. This strategy should be an absolute last resort.

Many of the resources that I am about to give to you have relationships with your local dealerships. Cars in your town are listed on these websites for sale. Source:  CarsDirect.com

• NADAguides.com
• Autobytel.com
• Cars.com.
• CarSoup.com
• Autotrader.com
• CarMax.com
• eBay.com/motors
• KBB.com.
• AuctionDirectUSA.com
• CarsDirect.com
• Craigslist.com

(Step 4) How to inspect a used car before buying it

Don’t tell me you just buy used cars all the time without inspecting them. If this is your first time buying a used car, you must inspect the vehicle or employ a professional technician to do it. Inspecting a used car is very simple. Don’t freak out because you may not know everything there is to know about automotive in general.

Vehicle inspection grading scale

VEHICLE INSPECTION GRADING SCALE

Vehicles that do not pass the engine and transmission inspection should be automatically eliminated.

Did not pass inspection score 1 point passed inspection score 10?

This section is defined as the engine, transmission, steering, and suspension………

(10-9) sections score majority 10 is considered to be in excellent condition

(7-8) sections score majority 10 is considered to be in good condition.

(5-6) sections score majority 10 is considered to be in fair condition.

(1-4) sections score majority 10 is considered to be in poor condition.

Year

Make

Model

VIN

How to avoid buying a used car with recall problems and technical service bulletin

You may be wondering what a car recall and a service bulletin are. To put it simply a vehicle that has a lot of issues that is deemed unsafe by the car manufacturer and the NHTSA.

How to do a car recall search

Head over to the safercar.gov and type in the VIN from the vehicle.

How to do a car technical service bulletin search

Head over to the safercar.gov and type in the VIN from the vehicle.

(Step 5) How to negotiate used car price

Negotiation script

Don’t bluff when using this script or else its effectiveness will be watered down. Always have your money on hand to make the deal happen.

Mr. or Mrs. ……………..

I love the vehicle, but there are some things that need to be fixed. Your asking price is……………… but based on the price you are asking which is ………………..you are saying that the vehicle is in ……………………….. condition. We are both aware that there is a list of things that would cost me more money to fix out of pocket if I buy it from you in that condition today.  Put yourself in my shoes. Let’s make the deal work for both of us. I will agree to buy the vehicle only if you agree to offset the cost of the repairs into the price of the vehicle. If you say yes to the……………….. The price I will buy it today.

If the person selling the car insists there is nothing wrong with the vehicle and stays firm on the price walk away from the deal.

Conclusion

Congratulations you are now armed with information that can assist you in finding the best used car deal right now and forever. I am here to tell you, don’t be discouraged by the many steps involved. The people who rush and buy used cars without the right preparation end up with the short end of the stick. Be prepared have fun with the process.