How To Buy A Used Car: Motivation, Research & Financing

by on October 18, 2014

Looking for a new set of wheels? Buying brand-new can be a punch in the pocketbook, since a car depreciates around ten percent as soon as you drive it off the lot and about a quarter of its original value after two years. However, used cars worry some wary customers. Is the previous owner knowledgeable and honest about the car’s condition and maintenance history? Will the car last another 100,000 miles or only another 10,000?


Not only will a new car cost significantly more than a used car, the gap between new and used prices has widened by 20% since 2008. According to, in 2011 the average transaction price on a new car, before taxes and fees, was $29,916 compared to $9,297 for a used car. Buying used greatly reduces your loss of value due to depreciation. Private owners are often more willing to negotiate price than dealerships. If you prefer the peace of mind that comes from a dealer’s stamp of approval, a certified pre-owned car brings the best of both worlds. Usually only low-mileage cars with no history of damage are considered for such programs. Such cars, which would already be a good pick for a used car buyer, are then inspected by a mechanic and covered by a warranty. A used car means paying less for insurance; just use due diligence to be sure it won’t cost what you saved on insurance and then some for repairs.


Whether buying new or used from a dealer or private party, start with choosing your target car carefully. Explore why you need a car. Do you have a long commute, or do you just need to get around town? Do you need to transport many people or more-than-average cargo? Do you need power for towing or fuel efficiency for cost savings? A car that fits your needs will provide more satisfaction in the long-term than buying a car for its brand recognition or specs for bragging. Consider similar vehicles from different brands.


The car people of have a handy calculator for determining how much car you can afford. Enter your zip code and the calculator automatically populates the APR field based on rates in your area. Input your desired monthly payment, loan term, trade-in value and down payment to give you an ideal sticker price range. Having the numbers in front of you aids not only budgeting but also negotiating with a salesperson. Experts recommend that your car payment should be no more than a third of your gross income each month.

Dealership financing is a convenience and sometimes offers money-saving manufacturer incentives, but beware the skilled salesman. They understand the excitement of a potential buyer ready to make a purchase, and fine print may be overlooked. Don’t take it personally or be rude to the salesperson; it’s his or her job to make money on your business transaction. Do not sign anything until you fully understand and are satisfied with the terms of repayment. The Federal Trade Commission has put together this helpful reference.

Buying a new-to-you car is a commitment, rather like getting a puppy. It can be your best friend or a constant source of frustration. The key is choosing the one that suits you and doing your research before bringing it home. Stay tuned for future segments on getting a good value when purchasing a used car.

{ 1 comment… read it below or add one }

Micheal June 8, 2015 at 7:43 am

Great post, there is a lot of considering when looking to purchase a second-hand car
Get the best deals and discounted specials when purchasing second-hand cars.


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