Tips When Buying a Used or Pre-Owned Car
Purchasing a pre-owned vehicle can be a smart financial decision. You can avoid the significant depreciation associated with a new vehicle, and you may be able to afford a higher-end model than you would if you were to purchase something brand-new.
Most "franchised" dealerships (those dealerships associated with specific brand names) offer pre-owned as well as new vehicles, so you can often work with the same dealership to explore all your options and make the choice that's right for you.
The biggest concern that most people have when buying a used vehicle is the thought that they might be "buying someone else's troubles" or a concern that the vehicle will no longer be under warranty. A little research on your part can go a long way towards eliminating those concerns.
SCCU can help you with the financing and warranties to protect your investment. We offer the same low rates for model years 2007 to the present, so you'll get "new car" treatment when it comes to your loan!
Here are some steps to take when purchasing a used vehicle:
Research the Vehicle's Value
Research the value of the vehicle you plan to buy. When you apply for financing, lenders compare the value of a vehicle to the loan amount to help determine if your loan will be approved and what interest rate you will be charged. There are several pricing sites online.
SCCU uses NADA pricing when valuing a used vehicle. NADA displays three values for vehicles. "Clean trade in" is the closest to the value that SCCU will use in determining the amount we can lend on the vehicle.
Plan Your Down Payment
If at all possible, put some money down. This can help you get approved for a loan, get the best interest rate, and keep your monthly payments low.
You can even use points accrued on an SCCU Platinum Visa® credit card as all or part of your down payment.
Estimate Payments Before You Buy
You can use SCCU's calculators to estimate monthly payments for various loan amounts at different rates and terms (number of months). One thing you may find is that the maximum term that a lender offers is not available for a used vehicle. In other words, when you're doing your research on monthly payments, don't count on 84 months as a loan term. You can also call Express Sales to get pre-approved for a loan so you'll know exactly what your payments would be for a particular loan amount and term.
Check the Vehicle's Condition
"Certified" programs from major brands offer assurance that a vehicle has met certain standards. Take the time to understand what the certification covers and what protection you have in case of a problem after the sale. Don't hesitate to ask questions. Even if you are purchasing a "certified" used vehicle, it's a smart move to have the car inspected by a mechanic you hire. In addition, the Federal Trade Commission's consumer web site recommends the following:
Take a Look
Make sure the body parts line up, the paint matches, doors open and close easily, and the tires show even wear. Lift the hood. Check under the hood for leaky hoses, worn belts, and dirty oil. Automatic transmission fluid should be clear and reddish, and not smell burned. Radiator water should have a light yellow or green color.
Take a Seat
Turn the ignition key to accessory and make sure all of the warning lights and gauges work. Start the car and check all lights and accessories and make sure no warning lights remain lit on the dashboard. Pay close attention to the airbag indicator lights. If these lights fail to illuminate as you start the car, or stay lit after the car is running, it is a warning that the car's airbags are not functioning correctly.
Perform a Safety Check
Try on the seat belt and take a test drive to ensure that you are comfortable while driving the vehicle. Make sure head restraints, roof structures, and windshield designs do not interfere with your ability to see clearly. Test the vehicle at dusk or early evening to determine your comfort with the visibility provided by the headlamps. If you already have a child safety seat, install it to check for compatibility.
Hit the Road
Take the vehicle up to 35-40 MPH. Make sure shifting is smooth and steering is straight. When braking, a pull to the left or the right could indicate a brake problem. The steering wheel should not shimmy at high speeds and cornering should be smooth.
Check the Vehicle History
A CARFAX report can be helpful, and many dealers will provide a report, but keep in mind this reporting can only track repairs that were reported to the insurance company or dealership and cannot guarantee a complete history. An inspection by your own mechanic can help detect unreported repairs.
Check the Cost of Insurance
Contact your current insurance provider and ask about the cost of insurance for the make, model, and year you are considering. While you can always shop around for insurance, contacting your current provider lets you easily compare the cost of buying the same coverage you have now for another vehicle. A "bargain" could prove costly if it's expensive to insure!
Check the Dealer
If you are considering purchasing a used vehicle at a smaller, 'independent' used car lot, here are some tips for researching the reliability of the dealership:
Is it an SCCU participating dealer? Participating Dealers allow you to finance your loan with SCCU right at the dealership when you buy.
Check the dealer's reputation. Does anyone you know use or recommend the dealer? Your fellow SCCU members can help! View fellow members' ratings and reviews of the dealership you are considering. Reviews received for any dealer are posted, so this information is not limited to our participating dealers.
Does the lot look "professional"? Is it paved?
Does the dealer advertise "buy here, pay here" or "easy credit"? This lets you know that their target customer is more interested in getting any car than a great car.
Consider a Warranty
SCCU offers warranties that provide protection for low, mid-use, and high-mileage vehicles. An Express Sales Associate can provide you with information about coverage and cost. The dealer may also offer warranties, but be sure to compare the cost and coverage to those available from SCCU.
Buying From an Individual Owner (instead of a dealership)
Read our "Buying or Selling a Car Privately" article for some tips on buying a vehicle from the individual owner. When buying through the classifieds instead of from a dealer, the Federal Trade Commission recommends that you do the following: Check the name on the title and match it to the name on the seller's driver's license. Many individuals disguised as private sellers are actually unlicensed, unregulated "curbstoners," who may pass problem cars on to unsuspecting buyers.
Federal Trade Commission Bureau of Consumer Protection web site:
http://www.ftc.gov/ "Buying a Used Car" April 2006
Federal Citizen Information Center web site:
http://www.pueblo.gsa.gov/ "Buying a Used Car" March 2002<