Searching for Cars

There are many ways to search for cars from private sellers. Newspapers, used auto listings and digital classified sales sites are a few options. Buying, trading and selling marketplaces online are another way. You might also see a car with a “for sale” sign on it. Most of these vehicles can be bought with cash or private financing such as bad credit auto loans.

Search for Financing

Some private sellers will only accept cash or a verified cashier’s check, but others will help you finance a car. The seller may be able to help you with the paperwork, such as the purchase price, age and mechanic’s report. These documents can be supplied to the lender for setting up the financing. The lender will pay the private seller, and then you pay the lender back.

Documentation for Auto Loans

Getting private auto loans for buying a used car from a private seller requires a couple of additional steps. You will need the usual documentation, including proof of income. You will also need to have a credit check. The seller may need to show proof of title, proof of vehicle inspections and registration documents.

Find Out if You Qualify for a Bad-Credit Auto Loan

Comparing Loan Options

You may qualify for more than one type of car loan. If you have bad credit, there are bad credit auto loans that you might qualify for. These loans are typically for people with credit scores lower than 620. You may need a co-signer or a 20 percent down payment to complete the transaction.

Get a No-Obligation Auto Loan Quote

Final Steps

After getting the financing and receiving the keys and title from the private seller, you’ll need to register the car. You may need to get temporary tags and a temporary license plate. You will also need to get auto insurance.

Take a look at this offer for car loans and see if any could help with your car purchase.

Car shopping has come a long way since the days when buyers would kick the tires. Car salespeople know this most of all, and are compelled more than ever to avoid hassles and haggles and get you behind the wheel of the car you want, at the price you can afford.

But let’s not forget: purchasing a new car is often the second-biggest purchase that most people make, after buying a house. So here’s a ten-step guide to help you navigate the car dealership experience.

1. What’s the car for you?

Before you head into the showroom, know what you will use this car for: taking kids to school? Driving to work? Or are you rewarding yourself with your own set of hot wheels? What kind of car shopper are you?

• Value-driven: You want a good price, but will pay for quality.
• Image-drive: You are concerned with what your vehicle says about you.
• Methodical: You enjoy shopping and consider yourself an expert car buyer.
• Safety-Conscious: You want a safe and reliable vehicle you can trust to keep you and your family safe on the road.

2. What’s your credit report and score?

A good credit history and score will lower your cost when you borrow money. If you’ve paid your bills on time and established a track record of using credit responsibly, you’ll qualify for a far more affordable auto loan than someone who has paid bills late or has judgments in their credit report.
You’re entitled to a free copy of your credit report each and every year. You can get one online from AnnualCreditReport.com or call Equifax, Experian and TransUnion, the three major credit reporting agencies, and they will mail you a copy. Getting your credit score costs $1. Make sure all the information is accurate and up-to-date. Dispute any errors you find and you might be able to get them removed.

You won’t qualify for the best deals if your credit is anything less than excellent, but you should still be able to get a loan if you’re willing to pay a higher interest rate.

Young people who do not have established credit, or those who have imperfect credit, may want to consider a co-owner or a bigger down payment. “If you have a short credit history, it will improve your chances for getting approved if you come up with a larger down payment,” says Ron Montoya, senior consumer advice editor at the auto website Edmunds.com.

3. What Can You Afford?

Think of a set price range before you shop online. That will keep you from falling in love with cars you can’t afford. You should budget no more than 20% of your monthly take-home pay to go towards a monthly car payment. Understanding your budget will save you time, too, so make sure you account for how much gas this car will use, and put aside some money for the eventual repairs and periodic maintenance. Once you know what kind of car you want, check insurance rates since those can vary wildly.

4: Ask to be pre-approved

Check loan rates at banks, credit unions and other lenders and ask to be preapproved when you apply for a car loan. Start with the bank where you keep your money and ask if they offer discounted rates for established customers. Credit unions typically offer members far lower interest rates for new or used car loans, so joining one might be a way to save.

Figure out how much you can spend by adding your pre-approved loan to the value of your old car, and any cash you will put toward a down payment. Shop for models a few thousand dollars below that total because there will be taxes and extra fees.

5. What’s your trade worth?

If you’re trading in your old car, make sure you close the deal on your new car before even discussing the value of the old car.

And always check the value, before you negotiate with the salesperson, by going to trusted websites like kbb.com and nada.com. If you still owe money on that vehicle, first find out exactly how much it will cost you to pay off the loan, and if you owe more than the trade is worth, you’ll have to add that to the cost of your new wheels.

6. Check for deals in newspapers and online

Many dealerships advertise a car at a lower cost in your local newspaper and online. It’s just like your supermarket: they’ll run specials on certain foods to get you in the door and dealerships often run sales at the end of the month, year, or on holiday weekends.

7. Do your homework and compare quotes

While the window stickers will tell you the Manufacturer’s Suggested Retail Price, or MSRP, you can also find out the dealer’s invoice price, trade-in values, financing, incentives, inventory, expert ratings, user reviews, and even recent transactions by going online, says Alec Gutierrez, senior market analyst of automotive insights at Kelley Blue Book.

When you get quotes on the vehicle you want, see if they fall in between the fair market value and the invoice price, which is the price the dealer paid to get that car on their lot. Gutierrez recommends you take those two numbers and ask the salesperson for their best price. And use information to get competing bids from other dealers.

8. What kind of financing can you afford?

Don’t increase the number of months on your loan in order to lower your monthly payment. That often means you’ll pay much more in interest over the life of the loan, and you’ll end up owing more than the car is worth. Those 6, 7 and 8-year auto loans will wreck your budget and devour your savings.

9. Take your time before you take the car home

Take the time to test drive and closely inspect the car you’ll keep in your driveway. Many car buyers have regrets within mere minutes of becoming an owner, so don’t rush this important step. Have your salesperson or the person delivering your car explain all the functions and answer any questions. And find out what to do if something unexpectedly does go wrong.

10. Remember: You’ve Got The Power

“The balance of power has definitely tipped in the consumer’s favor,” says Joe Webb, founder of DealerKnows, an automotive Internet sales training firm.

“You have much more control over the four most important aspects of the car deal,” adds Carroll Lachnit, features editor for Edmunds.com. “Price, trade, financing and down payment.”
Lastly, Lachnit says to beware of add-ons and extras like “extended warranties.” Just say “no” to those options. Only add something to your car loan if there is no cheaper way to attain that service or option.

1. Sleazy Salesmen

Not all car salespeople resemble the general stereotype. However, sleaziness is something you should still be aware of. Some unscrupulous car salesmen will say anything to make a sale, even if it’s untrue. Be cautious of car salesmen that rush you into making a speedy purchase.

Avoid falling for lines such as “someone else is interested in this vehicle”. Don’t ever feel pressured into making a purchase. BONUS TIP: shop online to find better vehicle deals without the pressure of a salesperson.

2. So Called Deal Bundles

Deal bundles are packages that the seller might use to consolidate the vehicle sale with auto insurance and auto loans. These bundles may seem attractive at first, but they often cost the buyer much more in the long run. Use different organizations for different aspects of your car buying. For instance, you can search for separate loan acquisition or compare different insurance policies from top providers online.

3. Quoting a Higher Price Based on Gender or Ethnicity

Unfortunately, even in this day and age, some dealers may quote women or minorities at higher prices simply due to bias. When possible, try to negotiate online or via telephone to minimize unfair treatment.

4. Yoyo Financing

This is when car buyers with bad credit are tricked into paying up to 5% more than they should. In these instances, buyers are normally informed that their financing has fallen through just a few days after taking the vehicle. As a result, they are tricked into financing at a higher rate. Nicknamed “yoyo financing” because of the sudden price change, this is something you should definitely look out for.

5. Overseas Car Buyers Sending Payment Via Paypal

This last scam is one to watch for if you’re selling to a long distance buyer. Here’s how the situation goes: 1) Buyer claims issues with freight company. 2) Buyer offers a higher price if the seller pays the freight cost. 3) Buyer requests an exchange over Paypal, which allows them to pocket the money.

Avoid paying through Paypal if you can help it and meet buyers face to face whenever possible.

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The Price is Right

Automakers recognize the social component of car buying. Ad campaigns play on our desire for cars to reflect our personality. Emotion can play a role in what we purchase, but it will be to our detriment if we don’t account for our ability to pay. Some experts suggest that the total monthly expenditure on your cars should be no more than 25% of your income. That figure includes gas and maintenance as well as the monthly payment. Spendthrift Dave Ramsey suggests that your cars’ value be no more than half your annual income.

New or Used

We may want to have the latest model car, but is getting a new car the wisest move? Thanks to our neighbors’ leasing vehicles, the number of used cars or certified pre-owned models are higher than ever, making buying a used car very attractive. A certified pre-owned car will still have some warranty and the vehicle must meet certain requirements to carry that tag. These cars may be a better value over time.

Good Credit Matters

You should absolutely know your credit score before going in to make a deal with a salesperson. A credit score below 600 is likely to cause you to pay more upfront and more over time with higher interest rates.

You can deal with financing or loan matters with your bank or credit union before going to buy a car. The dealer may hate that because they may have a deal with a lending institution where the dealer makes a commission on any financing deal they bring in.

One more point, you don’t have to get a car loan from the bank where you normally bank. Shop around. Credit unions may be a better place to get a car loan than a massive financial institution.

Research Matters Thoroughly

The Internet is your friend when you want to buy a car. There are hundreds of car owners and enthusiasts out there ready to share what they know about their cars, including the problems they’ve had with a car that the manufacturer isn’t solving.

The first-hand knowledge offered by consumers is probably the most valuable. Yet, you may not want to overlook reviews by seasoned auto journalists and reports from watchdog organizations that want to help corporations behave.

It’s Electric

Currently, federal and state governments are offering tax incentives to those who buy electric cars. If finances are really an issue, buying an electric or hybrid car may not be the right move for you. You have to examine whether the savings on gas and the tax offset will make up for the upfront expense of buying such an expensive vehicle. If you want to change the world, however, the electric car will be leading the . . . charge . . . .

Where You Buy

If you aren’t getting a new car, you have options. You can buy from a dealership, an online broker, an auction site or from someone down the street. Buying from a private seller doesn’t give you some of the minimal security you get with buying from a dealer, and they don’t usually offer soda and chips. If they do, you might want to reconsider doing business with them. Or not.

The Games Dealers Play

The salespersons at some dealerships are trained to do things to throw you off your well-planned purchasing strategy. They know that more often than not we’re savvy and coming in with a specific amount we’re willing to pay, a credit report and a mean look in case they try anything funny. So they may try to establish a Type-A persona to intimidate you. They will distract you with sodas and snacks. They’ll have the latest action movie playing in the showroom. They’ll tell you how many of the same car they’ve sold to people who have the same job you do. They will do anything to get your head turned in the wrong direction. Don’t let them.

Sales Aren’t Always What They Seem

At certain times of the year, dealers are under pressure to get rid of new cars on the lot. It’s often during the fall when the maker is releasing new models. Sometimes you may get a slightly better deal during at the end of the month when a salesperson needs to meet a sales quota.

However, we may be more tempted by advertised sales than the timing. A dealer may offer what appears to be a too-good-to-be-true offer like $3,000 off the wholesale price. The dealer is likely to have marked the wholesale price up $3,000 to offset the offered deal.

The Final Price Isn’t Always Final

Once you think you’ve agreed on a price to pay for a car, you may well be in for another hour of haggling as salespersons suggest add-ons and other things. It’s probably not a good idea to tell your salesperson how much you’re trying to pay per month, especially if you’re financing with them. They will then be able to add on items to the sale, like a worthless warranty, that have nothing to do with the price of the car while keeping your monthly payments at the price you wanted.

It’s a Great Car, Trust Me

Many manufacturers offer some kind of limited warranty on new cars. Some dealers get in on the action to get you to purchase a vehicle from them. As long as those warranties don’t add to the car’s final price, they are great.

When you purchase a used car, you are very unlikely to receive any guarantees from the dealer that the car is even going to make it home with you after you sign the contract. That’s because with the exception of “certified pre-owned” vehicles, dealers don’t have to guarantee the usability of the vehicle. It’s up to you, the purchaser, to make sure it’s really worth the asking price. It may be worth your while to ask a mechanic to examine the car before you buy it.

You’ll Need Insurance

In most states it’s a misdemeanor to operate a motor vehicle without insurance. So, you’ll need to have a plan in place. Look for the best deal as you would with any vehicle. If you already have insurance, you’ll need to place the new car on your old policy.

Relax

Stress can affect or change your normal decision making process. If you’re a generally calm, logical person, yet one who needs to buy a car RIGHT AWAY after some unforeseen circumstance, you may not make the best choice. Treat it like a game or puzzle (you like games, right?) and go through the process, rewarding yourself in the end with the knowledge that you’ve made the best decision for you and your family, saved yourself a little money and have come away with a car that makes your neighbors check you out a little more closely.

The average American owns about 12 cars over the course of their lifetime – and according to a recent report by Statista, there’s a good chance that one or more of these cars will be bought as a used car.

According to the report, about 42.7 million light vehicles were sold used in 2017.
That’s significantly more used sales than the 17.1 million new vehicles sold.

So why are people opting to buy used over new? There are a variety of reasons why used car buying beats new car buying, and a bevy of avenues to purchase a used vehicle.

Here’s a closer look:

Benefits to Buying Used

Arguably the biggest benefit of buying used is the price. In fact, a new car will depreciate about 60 percent over the first 5 years of its life, making a used car purchase a much more affordable one. In fact, buying used allows many consumers to purchase a nicer model than they’d be able to afford than if they bought new because of the depreciation.

[bctt tweet=”Buying used allows many consumers to purchase a nicer model than they’d be able to afford than if they bought new because of the depreciation.” via=”no”]

What’s more is that because vehicles lose most of their value early on in their lives, they’ll actually depreciate less over time the older they get.

Other benefits include cheaper vehicle registration fees, as many states base costs on the model year and value. And you might be surprised to learn that warranties aren’t exclusive to new models.

Most dealerships offer certified pre-owned (CPO) vehicles, which must pass a rigorous inspection in order to qualify. On top of this inspection, most also come with extended warranties. This all helps to offer peace of mind to consumers during the buying process that no matter which vehicle they choose, it won’t fall apart as soon as they drive it off the lot.

As you can see, there are benefits to buying used. And, while you may not get that fresh new car smell in a used vehicle, the good news is that they made air fresheners for that!

Where (and How) to Buy Used

Gone are the days of paging through your local newspaper classifieds section. Today, the Internet makes things more convenient than ever when shopping for a used car. Here’s a look at some of the avenues we suggest:

• The dealer: If you want peace of mind with your used car purchase, you can’t beat going the CPO route. It’s true that buying from a dealership may cost a bit more than doing so from the other avenues on this list, but having a warranty to fall back on and knowing that the vehicle passed a thorough inspection is worth it to many consumers.

As we said earlier, one of the risks with buying used is that you don’t know much about how well the car was cared for prior to your ownership – even if you pull a vehicle history report. Buying a CPO vehicle helps minimize some of the perceived risk. It’s also worth noting that you can buy non-CPO vehicles from dealerships and used car lots. They’re usually less expensive than a CPO vehicle, but come with a tad more of the aforementioned risk.

• Craigslist: Craigslist is an ideal resource if you’re looking for something rare or very specific and aren’t concerned as much about the vehicle condition as you are with just finding a specific type of vehicle.

The website allows you to set up alerts, communicate with the seller and even arrange a time to see the vehicle in person prior to any price negotiation.

• Private Party: Individuals post vehicle listings on other websites like eBay and AutoTrader. Generally, you can purchase vehicles at lower prices when buying from an owner, but you should be weary of vehicle condition.

Before buying from an individual, we recommend pulling a vehicle history report on it, seeing the car in person, taking it for a test drive and even seeing if you can have a mechanic take a look at it to assess its overall condition.

• Auction: Though this can be more of a crap shoot than the other used buying avenues listed here, buying a vehicle at an auto auction can be a great way to get a decent car for an ultra-low price.

Auctioned cars typically consist of a mix of old rental cars, salvaged cars, repossessed cars or public service vehicles that have been “retired” from use. Many vehicles up for auction have been heavily used and come with a risk, but it is possible to walk away with a decent vehicle for a great price.

Each auction typically has different rules and regulations, so be sure to do your homework beforehand.

Pre-Purchase Inspection is a MUST

Once you find a car that might suit your needs, it’s a really good idea to get it inspected. Call around, or simply search on Yelp for a mechanic that offers pre-purchase inspections. This service should not cost much more than $80, and will subject the car in question to a thorough gauntlet of tests.

NOTE: Even if the inspection reveals a number of issues, it does not mean that you should pass on the vehicle. Have a candid conversation with the mechanic about the car’s value and the cost of repairs – and the urgency of those repairs. If you find a car that’s valued at $3,000, is being sold for $2,000 and needs $650 worth of repairs, it’s probably still very much worth buying.

Now, go car shopping!

Don’t be weary of buying a used car. Just know what you want and do your homework on where to find it. If you do it right, the process can be just as satisfying as driving a brand new car off the lot, even if it doesn’t have that new car smell.

Before you go shopping, check out this information on car loans.

Compare Auto Loans Before You Walk Into the Dealership. Click Here for More Information

Planning

Know what you are looking for, how much you are willing to pay, and what other options are available. If you are looking to save money, try being open to buying an older car with higher mileage. There are plenty of dealers that may sell certified pre-owned vehicles within your budget.
When looking at used cars, it’s a great idea to speak with your local mechanic to get their feedback. You should also look at Consumer Reports, J.D. Power, or the Long-Term Quality Index to double check the quality of specific car models. Knowing what you can afford with a pre-approved loan can also help you narrow down which cars you should be looking at.

Negotiating

Now that you have a plan in place, it’s time for the next step: Negotiation. Landing a great deal might be easier if you walk into the dealership with a pre-approved loan. And since you’ve done your research, you’ll know exactly what the car is worth. This preparation can allow you to control the conversation, as well as the potential pricing.

With a pre-approved loan, you’re essentially shopping for a vehicle as a cash buyer. This removes the opportunity for the seller to “play around” with the numbers and get more money out of you with an “appealing” monthly payment.  The dealership won’t have as much wiggle room to take advantage of you.

When you get pre-approved for a loan, you can focus on finding the vehicle that’s right for you! Don’t show all of your cards up-front though; the dealer may still try to sway you into financing through their bank. But listen to their offer. They might surprise you with a high-quality deal. Remember, getting pre-approved for a loan costs you nothing. It’s free, and there is no obligation.

At the end of the day, both you and the dealer are trying to get a deal done. They’re just trying to not lose money on their car, and you’re trying to pay as little as possible. Going into the dealership with a plan, and having your financing in place are great steps towards helping you and the dealer reach an agreement.

Get Pre-Approved for a Loan Today. Click Here for More Information

• Check for Evidence of Previous Accidents – As a potential used car owner, you need to inspect the vehicle thoroughly to ensure that there is no structural damage to the vehicle that may affect its performance.

• Check the Engine and the Tires – A car is just as good as the engine that it contains. It is always a good idea to have a qualified mechanic check the engine of a used car to establish the integrity of it. If you have to replace the engine, it may be very costly to do so. Eroded tires are another important thing to double check. If they are eroded, you may need to spend additional funds to purchase new tires.

• Check Vital Car Parts – Car parts such as the gearbox and clutch should be in excellent working order. Also check the interior to satisfy yourself that the car is in good shape. You could run into problems shortly after making your purchase; especially if the parts and the interior are in bad shape. Take a test drive.

• Access to Spare Parts – With a used car, you should expect that some of the parts will eventually need to be replaced. It is important that you are able to readily find these parts on the market. Otherwise, you could run into problems when you can’t find essential car parts. Opt for a vehicle with readily accessible spare parts.

• Check Vehicle documents – Verify the validity of vehicle documents before finalizing a used car purchase.

It’s always a good idea to protect your investment. Once you’ve purchased your vehicle, having an extended warranty can help cover you for anything that may arise after you’re behind the wheel.

>Need Information on Auto Warranty? Click here!<<

Happy car buying!