Purchasing a pre-owned vehicle can be more difficult than purchasing a new vehicle. In this guide, we’ll walk you through the steps to find the right used car, secure an affordable loan, pay a fair price, and reduce the chances of getting a vehicle that’s unreliable, overpriced, or dangerous.
Set a Car-buying Budget
Setting a budget for a used car doesn’t just involve looking for a pre-owned car, truck, or SUV with a monthly payment you can afford. While the monthly payment must be affordable, you must consider other factors to get a true picture of the total cost of ownership.
This covers the cost of interest on your car loan, insurance premiums, as well as parking and maintenance fees. The cost of auto insurance is an often-overlooked factor to consider when shopping for a used car. Depending on the model you choose, prices can vary significantly.
Find the Right Used Car
Choosing a used car can be difficult. It’s important that you consider where you drive, how many people you’ll be transporting, why you’ll be driving, and how you’ll be driving. Then, match those requirements to your budget constraints. It’s critical to consider not only the vehicle’s size and performance, but also its fuel economy, safety ratings, and insurance costs.
Consider the Certified Pre-owned Car Option
Not sure if you want to buy a used car that doesn’t come with a warranty? You should know there is a used car option that is covered by the manufacturer’s warranty. Manufacturer-certified pre-owned cars (CPO cars) combine the price of a used car with the protection of a manufacturer’s warranty.
The majority of used cars are sold “as is,” with no guarantee. CPO vehicles, on the other hand, are covered by manufacturer warranties. Many CPO programs also provide extras like trip interruption coverage and roadside assistance for consumers.
Find Affordable Used Car Financing
Shopping for a pre-owned car and applying for a used car loan is similar to applying for a new car loan, but there are some notable differences. You should expect to pay a higher interest rate on a used car loan because lenders consider them to be riskier than new car loans. Used car loans are considered riskier by lenders for a variety of reasons, including the fact that their values are less predictable.
The car’s value serves as security for the borrower. Used car buyers may also face higher repair costs, which may make it difficult to keep up with car payments. If the car you want is a CPO vehicle, there’s a good chance you’ll be able to find a lender willing to give you the same loan terms as a new-car buyer.
