The price of cars has skyrocketed this year due to inflation, worldwide microchip shortage, and supply chain disruptions. And it is not just brand-new cars that are affected; even used car prices are rising due to competitive demand that the supply can’t meet.
The average price of a pre-owned car right now is around $27,500. And that may or may not be inclusive of coverage. Most of the time, you’ll need to purchase a used car warranty if you want your car to be covered for unexpected repairs, and that will cost extra.
Here are some tips to keep in mind if you are buying a decent used car this 2022.
Do Your Research
The first thing on your research list is your budget. What other possible expenses might arise while buying the car? You’ll need to secure car insurance, set aside maintenance and repair expenses, taxes, etc. How much are you willing to pay for your used car? Are you paying with cash or financing? Where will you apply for a loan?
Next is research on what type of car and model you would buy. Aesthetics and performance are all well and good, but make sure to factor in your needs and how you plan to use the car in your decision-making. Once you’ve decided, research the current market value of the model and look around used-car dealerships to compare their prices.
You might even have to widen your search net beyond retail outlets to include private parties.
Get a Vehicle History Report and Pre-purchase Inspection
Vehicle history reports detail all accidents, service records, and other data that the car you are purchasing has ever experienced since first rolling out in the dealership garage as a brand-new car. It lets you know just how much the car has been through, helping you decide if it is worth buying. If the seller asks you if you are willing to buy the car without this document, say no to the car.
Also, always ask for a pre-purchase inspection. It is better to have a mechanic whom you trust do this inspection. That way, you can protect yourself, get your money’s worth, and have some peace of mind.
Take It Out for a Test Drive
While you can do your research online, always look at the car in person before purchasing it. And always take it out for a spin. This helps you get a feel of the car’s performance firsthand and lets you catch any problems the car may have that aren’t reported. Watch out for any warning lights and weird noises. If you don’t feel comfortable with the car, you can move on to the next option.
Have a Financing Plan Lined up and Negotiate the Price
If you are thinking of financing your car, getting pre-approved can help you negotiate prices. This is where your research comes in handy. Knowing the market value helps ensure you are getting the best deal. Ask questions and read the fine print before signing on the dotted line.
Get All the Necessary Documents
Make sure all the necessary documents like the car’s title, bill of sale, and registration are passed on to you during the transaction. Comply with all the law’s requirements for owning a vehicle and make sure to get car insurance.
Selling Outright vs. Trading In
If you are buying a used car from a dealership, consider selling your old car outright instead of trading it in. You usually get more from selling outright, especially with the current markup in car prices. Trading in might be convenient, but the few extra bucks you get from selling outright can help car maintenance and other extra expenses. Just make sure you stick to the rules and sell your car through legal means.
Bonus Tip: Be Patient
If you can hold out a little longer, consider waiting before buying a used car. Pros say that the used car market inventory will stabilize by the end of the year or early next year. Try to ride it out until prices drop a bit or supply catches up. But if you are in dire need of one right now, be vigilant and watch out for some red flags. If the deal is too good to be true, it probably is. Trust your gut. If it tells you the seller might be lying about the state of the used car, it is better to err on the side of caution than to be scammed thousands of dollars.