Many of us may remember when buying a used car ranked right up there with a trip to the principal’s office. Fortunately, times have changed, and buying a used car doesn’t have to be the horror it once was. Today’s consumer has a wealth of information that’s also readily available, which canmake the experience of buying a used car far less stressful. However, YOU HAVE TO DO YOUR HOMEWORK FIRST!
Decide Not Only What You Want to Spend but, REALISTICALLY, What You Can Spend
Before considering the purchase of a used car, it is wise to establish the amount you are willing to spend or, if taking a loan, calculate your maximum monthly payment – and then make a firm commitment to yourself to stay within that amount.
Don’t forget to consider the costs of tax, title, registration and insurance for your new car. As a very broad, general rule, and depending upon where you live, tax, license, assorted fees and other costs will add roughly 10 percent to the purchase price. This makes the price of a $30,000 car actually about $33,000 and, if you’re financing the deal, you will be paying interest on that additional amount. So, MAKE SURE you’re able to afford not only the car itself, but also its costs of ownership.
Insurance can be a deal-breaker for some, too, since – depending upon a variety of factors, such as your driving record and the type of car – some companies may want to charge you more. Typically, sport cars, anything with “turbo” or “supercharged” in the name, higher performance vehicles with larger or more powerful engines, and vehicles with four-wheel drive will automatically yield a higher insurance rate. Another thing to keep in mind is that vehicles with histories of being stolen can demand a premium, too. It always pays to shop around, but keep in mind that if you have a long-standing and positive relationship with your current insurance company it may be best to stay with it, even though it may not offer the lowest of all rates.
Once you’ve established a price limit, do your best to steer clear of vehicles that barely squeeze under it. Leave yourself some wiggle room and shop for a less flashy vehicle with lower mileage or an older one in tip-top shape. You wouldn’t want to buy the car of your dreams only to have it drain your bank account because you didn’t factor in all of the costs of ownership.