Car shoppers will find a vast selection of used vehicles to choose from these days.
The number of off-lease cars hitting the market as used cars has been growing, contributing to what Edmunds recently described as “one of the strongest buyer’s markets in recent memory.” That presents an opportunity to get a good car at a decent price — without the crazy depreciation you absorb when you buy a new car.
While the large selection may be a little dizzying, it’s ultimately a good thing. You have more vehicles to compare and can more easily walk away from a questionable deal. Just be sure to follow these steps to ensure you drive home in the best vehicle for you and your budget.
1. Determine what you need versus what you want
It’s easy to get caught up in car-buying excitement and drive away with one that just doesn’t suit your needs.
Before you visit a dealer’s lot or peruse cars online, make a list of “must-haves” and “nice-to-haves” for your next car. Do you need four doors so the kids can easily get in and out? How often would you really use a high-end entertainment system?
Deciding on what you need most will help you narrow your search and help ensure you don’t end up with a car that doesn’t make sense for you.
2. Make a list of cars to consider
Use your list of “must-haves” and “nice-to-haves” to determine what models you should consider.
You might think that if you know you want an SUV, for example, you can just start shopping. Not so fast.
There are different types of SUVs — which type do you want? Does the height of the step into the SUV matter? It might if you have young kids with short legs or older folks who don’t have the mobility they once did.
The following sites can help you make a list of vehicles you want to consider:
3. Shop for financing
Dealers offer financing, but you can often save hundreds if not thousands of dollars by seeking out financing yourself. Shopping around for car loans helps you get the best interest rate you can qualify for.
One place to shop for car financing is our Solutions Center, where you can search for auto loans based on customizable factors, such as the loan type and loan amount.
That’s not to say you shouldn’t consider any dealer financing. Some dealers forge relationships with lenders to offer competitive rates. Dealer financing might also allow you to take advantage of rebates and incentives. You can search for rebates and incentives on Edmunds’ website.
The bottom line: Research your financing options. For more guidance, check out “Need a Car Loan? Here’s How to Get the Best Deal.”
4. Understand the total car cost
One of the most serious errors car buyers make is to concentrate on monthly loan payments instead of the total cost of the car. It’s possible to negotiate your monthly payment to suit your budget and still end up spending more than you’d planned — or could afford — to pay.
A car loan payment is one of multiple expenses that comprise the total cost of a car. For example, expect to pay taxes and various fees — including recurring fees like registration. And don’t forget to factor in the cost of auto insurance.
Contact your insurance company to make sure that the vehicle you plan to buy won’t boost your premiums to a rate that doesn’t make sense for you.
5. Take a step back
It’s difficult to walk away from a car that seems perfect for you, but it can help you avoid buyer’s remorse.
I’ve walked away from what I thought was the car of my dreams at a very low price. I ended up buying the car a few days later, but by walking away and coming back, I felt more secure in my purchase.
In the days between test driving the car and signing on the dotted line, I checked the CarFax vehicle history report to make sure the vehicle hadn’t suffered flood, fire or other damage. I also checked for recalls on the website of the National Highway Traffic Safety Administration.
What is your experience shopping for used cars? Share with us on comments below or on our Facebook page.
Nancy Dunham contributed to this post.
This article was originally published on MoneyTalksNews.com as 'It’s a Great Time to Buy a Used Car — Just Take These 5 Steps First'.