10 Steps to Buying a Pre-Owned Car
If you’re interested in buying a pre-owned vehicle, here is a list of 10 steps from Mike Burch Ford that will help you to locate, price, negotiate?and buy the used car you want.
Step 1: Set Your Price Limit
A general guideline is that your monthly car payment should be no more than 20 percent of your take-home pay. However, seeing your dream car on the lot can blind you to the price tag. That's why calculating how much car you can afford before you fall in love on a test drive can save you from falling into debt. Once you have your price range set, finding the right car will be a much simpler process.
Step 2: Create a List of Car Models
To get more car for your money, Mike Burch Ford suggests you consider buying a less popular model that is still reliable. You may like the style of a Ford Mustang or Excursion, but a Focus might meet your needs as well as your budget. With this in mind, build a target list of three different cars that would be a good match for you. You could also consider buying a certified pre-owned (CPO) car or vehicle with an extended service plan. Both CPO and Extended service plans provide failure coverages after the time of sale for different periods depending on the vehicle and the plan purchased.
Step 3: Check Prices and Reviews
To see if the cars you are looking at fit your budget, research what other people in your area are paying for that car. You can find all the information online that you need to make a good buying decision: pricing, reviews, specs, fuel economy and lists of standard features.
Step 4: Search your Area for Deals
Begin searching for the cars on your target list. Pay attention to factors such as distance, mileage, price and features to find exactly the car you want. Pictures are a necessity these days, so make sure the car you purchase or call about has been pictured so YOU can see the vehicle without leaving your desk. Often times pictures are more descriptive than words.
Step 5: Check the Vehicle History Report
When you find a used car that looks like it might be a winner, don’t start negotiating until you check the vehicle history report. This is an essential first step. If there has been an accident in the car’s history do not necessarily write this vehicle off. The history report will tell you the extent of the damage ranging from minor fender bender to major damage/air bags deployed, etc. Major damage may have been repaired in a quality manner, and it may still a good car but needs to be inspected closely. In addition, we believe that major damage typically should discount the value of the car from 10% to 15%. You can access vehicle history reports by the vehicle identification number (VIN) and even by license plate. AutoCheck and Carfax are the two best-known sources for vehicle history reports. These reports can reveal vital information about the used car, including whether it has a salvage title, which means it has been declared a total loss by the insurance company, or if the odometer has been rolled back. While vehicle history reports typically show open recalls, you also can check by entering a car's VIN in the National Highway Traffic Safety Administration's free VIN Look-up Tool.
Step 6: Call the Dealer
Once you find a good prospective car, call the dealer before you go to see the vehicle. This is a good way to establish a relationship and verify the information in the ad. Write down a list of questions you have about the car before making the visit. If possible, make this appointment during the daytime so you can see the car in natural lighting and more accurately determine its condition.
Step 7: Test-Drive the Car
The best way to find out if a car is right for you, and is in good condition, is to test-drive it. On the test-drive, simulate the conditions of your normal driving patterns. Take it on the highway at 65 mph if that is where you’ll be driving it often, or try it out on steep inclines if you drive in the mountains. After the test-drive, ask the dealer if you can see the service records to learn if the car has had the scheduled maintenance performed on time.
Step 8: Negotiate
Negotiating with a sales person can be quick and relaxed, but sometimes it may take longer and can be stressful. Here are some strategies for better negotiating:
Don’t enter into negotiations with a salesperson who makes you feel uncomfortable.
Decide ahead of time how high you will go and stick to your limit, but be mindful of the realistic price range based on your research.
Be patient. Plan to spend an hour negotiating in a dealership.
Recognize that vehicles listed on the internet typically are priced at or very near the lowest price that the dealer is willing to accept for the vehicle. The internet in many ways is a “price shopping” media and dealers know this so they price cars aggressively in order to attract customers.
Step 9: Close the Deal
It's important to close the deal correctly so you avoid after-sale hassles. And wherever you buy it, you also need to make sure you have insurance for the car you just bought before you drive it away. Dealerships conclude the deal in the finance and insurance (F&I) office, where they may offer you a number of additional items: an additional warranty, anti-theft devices, prepaid service plans or fabric protection. Some people want the peace of mind that comes with extended warranties, so this is something you might want to. Review the dealership sales contract thoroughly. In most states, it lists the cost of the vehicle, a documentation fee, possibly a small charge for a smog certificate, sales tax and license fees.
Step 10: Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used car.
To find a dealership that knows how to treat shoppers right, stop the search. Go to www.mikeburchford.com