This was originally published on Monday, August 27, 2018, in the Pacific Daily News. Click here to subscribe to the PDN.
If you’re looking to get the lowest cost of car ownership, one of the best deals is getting a good, pre-owned vehicle. Pre-owned vehicles usually have most of their defects corrected while they were under warranty, and financing may be more affordable because the total price of the car is lower.
Buying a pre-owned car now could help you save money for that dream car later. Look online at some vehicles you are interested in and then go shopping around.
Private sale. Buying privately from the owner can mean big savings, but be careful. Private sellers don’t offer a warranty and the sale is final. The vehicle is sold as-is. It’s best to get a mechanic of your choosing to inspect the car before you sign anything.
Used car lots. These are great places to comparison shop vehicles within your price range. Used car dealerships also offer warranties, although they may be very short term. Prices may be slightly higher than purchasing through a private seller.
Fleet vehicles. Rental car companies, government agencies and business usually sell their vehicles after a few years. Most of the vehicles have been well maintained and may still fall under the manufacturer’s warranty.
Your mechanic. Your mechanic may also be a good source of purchasing vehicles. They are aware of vehicles that other customers are selling or are selling vehicles of customers who didn’t pay repair costs.
Ask a lot of questions
When purchasing a pre-owned vehicle you should ask a lot of questions about the vehicle:
How many owners has the vehicle had? If the vehicle has had more than two owners in a short time frame, you may question as to why it has traded hands so many times. Check online if that make and model has had recalls or major issues.
How many miles are on the vehicle? Miles take a huge toll on vehicles. The more mileage a car has, generally speaking, the price should be lower. Go online and look at what the expected cost for that make and model and input the mileage. If you find that the price should be lower, you can probably negotiate the price lower.
Also, the more mileage on the car, the more likely you may be purchasing a car that may require a lot of up-keep and maintenance.
Has the vehicle been in an accident? Hopefully, the owner is truthful and upfront. If the car has been in an accident, ask if the repair was done by a certified repair shop. And check maintenance records. A car with the appropriate scheduled oil changes and maintenance is less likely to have major car troubles.
Get a mechanic of your choice to check the vehicle. If there are concerns, ask how much it will cost to get it fixed. You may be able to negotiate with the seller to bring the cost down knowing that repairs are needed.
Is the car under a warranty? Used car dealerships should provide a warranty of some kind. If the vehicle is still under the manufacturer’s warranty, call the dealership to see if the warranty transfers will transfer to a new owner.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.