What's The Best Way To Buy A Used Car
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What's The Best Way To Buy A Used Car
Our choice for best overall, Autotrader, has been around since the early days of online shopping, and it boasts millions of listings. Those looking to buy should find plenty of options, and those trying to sell on Autotrader should be confident that the site will get plenty of traffic.
"The single best advice I can give to people is to get preapproved for a car loan from your bank, a credit union or an online lender," says Philip Reed. He's the autos editor at the personal finance site NerdWallet. He also worked undercover at an auto dealership to learn the secrets of the business when he worked for the car-buying site Edmunds.com. So Reed is going to pull back the curtain on the car-buying game.
And shop around for the best rate. "People are being charged more for interest rates than they should be based upon their creditworthiness," says John Van Alst, a lawyer with the National Consumer Law Center.
"Concerning the extended factory warranty, you can always buy it later," says Reed. "So if you're buying a new car, you can buy it in three years from now, just before it goes out of warranty." At that point, if you want the extended warranty, he says, you should call several dealerships and ask for the best price each can offer. That way, he says, you're not rolling the cost into your car loan and paying interest on a service you wouldn't even use for three years because you're still covered by the new car's warranty.
Gap insurance promises to cover any gap between the purchase price of replacing your almost-new car with a brand-new car if your regular insurance doesn't pay for full replacement if your car gets totaled. Van Alst says gap insurance is often overpriced and is fundamentally problematic. If you still want the product, it's best to obtain it through your regular insurance company, not the dealer.
"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."
Even if you buy a slightly newer used car than the Raekers', the couple raises a great point. What else could you be spending that car payment money on And if you can cut in half what you might otherwise spend, that's a lot of extra money for your retirement account, your kids' college fund or whatever else you'd rather be doing with that money.
The Covid pandemic has muted depreciation, however, and prices for used cars are growing faster than for new. As the price gap narrows, buying new becomes more appealing because the vehicles are in better condition, plus, they have a full warranty and can be financed at a lower rate.
Used Teslas have done particularly well of late, as gas prices have risen, spurring more interest in EVs and the economics of recharging versus filling up. The popular all-electric vehicles are now averaging $65,000 on the used marketplace, coming close to their cost when new.
"Paying cash is usually your best option because it limits how much you have to pour into a depreciating asset," said Greg McBride, the chief financial analyst at consumer finance site Bankrate.com. "But don't deplete your emergency fund just to buy the car."
Prices are at all-time highs and aren't expected to drop until 2023 at the earliest. If you already have a reliable vehicle, or live in an area with decent public transportation, the best decision might be to hold off on a vehicle purchase.
Teens and their parents have trouble agreeing on most things these days. Finding the best car for a teen driver is often a contentious subject, needing to find the balance of safety, affordability, and features. When it comes down to it, it's the Mazda 3.
Digital Trends had nearly 90 hands-on reviews of new cars in 2019 and can attest to other great options for teens, too. From sporty to spacious, all with an eye on safety, these are our picks for the best rides for teens. The best car for teens: Mazda 3
Apple CarPlay overrides your car's native infotainment system and promises to put a familiar, distraction-free interface right at your fingertips. It's also loaded with compatible third-party apps that give your car nearly the same level of functionality as your iPhone or iPad. We've put together a list of the best CarPlay apps available in July 2020.
Remember, your goal is to get a reliable used car not a pimp-mobile. So, decide from the outset to rid yourself of trivial preferences that inflate the perceived value of cars like paint color, seating material, power windows, and what-have-you.
A reliable used car is not like a regular car. It has been meticulously taken care of and that fact has to be teased out by using very specific and subtle keywords associated with a well-maintained vehicle.
A private seller is any person who is not a dealer who sells or offers to sell a used motor vehicle to a consumer. Under Massachusetts law, anyone who sells more than three cars in a one-year period is considered a dealer and must obtain a used car dealer license from their municipality.
The Massachusetts Lemon Laws require private parties selling used cars to inform buyers about all known defects which impair the safety or substantially impair the use of the vehicle. The law applies to all private party sales regardless of the price or mileage. Private party sellers are not required to repair the vehicle after it has been sold.
If a private party seller refuses to cancel the contract within 30 days of the sale, consult with an attorney to determine your best course of action. Lemon Law arbitration is not available for private party sales.
Buying used has not been immune to the price increase. The monthly payment for a used vehicle in the fourth quarter of 2022 was $526, according to Experian. But buying used is still less expensive than buying new. So as you explore your car-buying options, keep these tips in mind to get the best deal.
One way to get around some of the risks of buying used is to shop for a certified pre-owned (CPO) vehicle. Typically found at dealerships and rental companies, these vehicles are specially inspected and approved by the manufacturer.
This situation has made for some sobering numbers for car shoppers: The price of new cars is up 30 percent from 2022, and used car prices are now 34 percent above their projected normal levels, according to CoPilot's Return to Normal Index. And with interest rates up for the fifth time this year, you can expect the sticker shock to make your hair stick up.
"The combination of the two basically means that the industry is producing annually four or five million cars less than they could sell," says Pat Ryan, CEO of CoPilot, an app that searches through every dealer to find the best car prices.
According to CoPilot data, some used vehicle types are closer to returning to their normal prices than others. For example, the cost of SUVs dropped 10 percent last month, most likely because buyers are steering away from gas guzzlers. Wagons and minivans are also slowly creeping back to their normal price.
But more expensive vehicles include fuel-efficient compact cars, EVs, and hybrids. Interestingly, used Ram vehicles are selling 34 percent above normal levels, according to CoPilot's Used Car Price Premium Index.
Sure, the cost of cars is completely out of whack no matter what you buy. But if you dig a little deeper into the numbers, you see some interesting disparities. Take domestic vs. foreign cars. According to CoPilot, the average price of a domestic used car averaged $8,301 in August, a 12 percent decrease from July. Meanwhile, the cost of used foreign cars did not budge. They're still 44 percent above their projected normal levels.
With interest rates rising, paying cash for your car is your best action plan. But for most people, that's not a reality. The next best option is to secure financing from a credit union, which offers lower interest rates. Once you figure out your budget, you can base your financing on what you can afford to pay per month.
An analysis by Santander Consumer USA identified nearly 100 online research and shopping resources available to the nearly 40 million consumers that shop for used cars in a typical year. The best used car sites were named by 28 sources that listed choices for those most helpful to car shoppers.
Few shoppers look at even a half-dozen of the best used car websites, based on a recent survey, which showed that online shoppers visit an average of about four websites before buying their used vehicle, and that third-party websites typically were the first and last online shopping destinations.
Cars.com*Cars.com provides shoppers data, resources and digital tools to make informed buying decisions about new, used and certified preowned vehicles and to connect them with dealers. Search by make, model, body style, color, features, price, deal rating (great, good, fair price) and more. The site offers one of the simplest car affordability calculators we encountered, and an outstanding tool enabling detailed comparisons between several vehicles. New car reviews and videos also are provided. (+) 59ce067264