A used car may fit your budget and needs, and if you’re smart about your search, you can find a reliable car at a reasonable price. A used car will take a little more work to thoroughly check out, but the savings involved might be worth the extra effort for you.
• Find out what’s available. Along with new cars, major dealers on island have their used, or “pre-owned” car inventories available online. You can also check ads, classified listings, and your friends and family. Remember: think first about what you can afford, given your budget and your financing, and think about what your family needs. Any other preferences you have depend on your budget.
• Do your research. If a car has been around for a while, chances are that it’s been reviewed by car magazines, websites and individual consumers. You can check reviews to find out whether consumers were happy with their car, or if the car gave them trouble in any area. You can check safety ratings on www.safercar.gov, and you can compare fuel efficiency on www.fueleconomy.gov. The major car websites, such as Edmunds.com, Kelly Blue Book ( www.kbb.com) and Cars.com also may give you an idea of the general market value for a used car, given its make, model, and year. This information will give you negotiating power when you go in for a purchase.
• When you buy from a dealer: Check if the car is a manufacturer certified pre-owned car. Manufacturers have strict guidelines when they certify a car, which usually include a strict inspection, mileage and age limits, vehicle histories, and new warranty terms — all of which can give you more peace of mind. You can find out about different manufacturer certified programs on the car websites listed above.
If the car is not certified by the manufacturer, be sure to ask the dealer about warranties, what they cover and how long they last. If you’re serious about a particular car, ask about its accident record, and find out whether you can take the car to a mechanic. If the car has been inspected, ask if you can see the car’s inspection record.
• When you buy from a private party: Have a mechanic independently inspect the used car. Checking the car now, before you purchase it, can save you a lot of money on repairs in the future. If you’re confident enough to do the inspection yourself, be sure find a thorough car inspection guide, online or through another source, that you use while surveying the car. An inspection will give you more confidence and put you in a stronger position to negotiate. You should also find out as much as you can about the car’s accident history, by asking the seller for records of maintenance checks and repairs.
Take the car for a test drive. Note if you notice anything difficult when you accelerate, when you’re braking, and when you’re climbing a steep hill. Listen for odd sounds, and make sure every control is working as it should. You’ll save yourself money if you find problems now.
• Negotiate your purchase. Before you negotiate, be sure that you’re as informed as you can be about the car you want to buy. Make your case with the research you’ve gathered, and remember that you can always look for another car. What’s important is your confidence about the price you paid, and your ability to afford your payments, months and years down the line.
Michael Camacho is the president and chief executive officer of Personal Finance Center. He has more than 18 years experience in retail banking and with financial institutions in Guam and Hawaii.