Thinking about retiring your current wheels for a new-to-you vehicle?
Smart move. Buying a gently used car spares you the depreciation that befalls brand-new cars as they drive off the lot. You’ll save lots of money and can still get a quality vehicle that will last for many years.
But before you buy, there’s some work required on your part. That used car might look sleek, but you must do your homework to find out if it is actually dependable. Have you also considered the recurring costs associated with its purchase?
In the video below, Money Talks News finance expert Stacy Johnson offers a list of the most overlooked checks you need to make before purchasing a used car. Take a look, then meet me on the other side for additional tips.
1. Reviews and ratings
Have you ever bitten into an apple, only to be disappointed that it was brown and mushy to the core? The same principle applies to cars. It may be shiny and you can just picture yourself sitting in the driver’s seat cruising down the road. But after a few drives, you may realize it’s just not the right fit for you or that its performance disappoints.
Later on, you may find that the cost of repairs is prohibitive.
You can learn a lot about these issues before you even get behind the wheel. So, before you even go for a test drive, check reviews and other sources of information on the Internet.
First, simply do a search of “most complained about cars.” You’ll find an impressive amount of information from a variety of authoritative sources.
Now, do the same for “most reliable cars.” You’ll find articles about ratings by organizations like J.D. Power and Consumer Reports.
You may also want to search “complaints” and the make, model and year of a vehicle you’re considering. Forums can be very helpful. A co-worker of mine could have learned that the vehicle model and year she was buying was plagued by bad solders that caused serious problems with the vehicle.
- J.D. Power ratings and reviews of used cars.
- Edmunds.com used car ratings.
- Cars.com reviews.
- Carfax. Keep in mind that Carfax’s information may not be complete. To better protect yourself, order a car title history report from the National Motor Vehicle Title Information System, which shows the full history of a vehicle.
If the car is still in the running, the next step is to analyze the affordability. Take a moment to crunch a few numbers using an affordability calculator to determine if the monthly payment, assuming you are financing, is feasible.
Even if you’re paying cash, you’ll also want to take into consideration the cost of the taxes, tag, title and any other add-ons. They could easily add up to thousands of dollars, depending on the purchase price of the car and your state of residence.
Also, check out the depreciation trend. If the car has historically lost thousands of dollars in value year after year, the purchase may not make much sense.
Finally, is the asking price too much? Sites like Edmunds and Kelley Blue Book can help with that.
3. Maintenance costs
Now for the kicker: maintenance costs. Yes, it is totally possible to avoid the dealership, but the cost of labor isn’t the only thing you should be concerned about. It’s the parts! So if you’re thinking about purchasing a high-end foreign model, be prepared to absorb high maintenance and repair expenses.
Once again, do an Internet search for “most expensive cars to repair” and “most expensive cars to own” and you’ll find plenty of results, including this one from Consumer Reports.
4. Insurance premiums
The next line of business is auto insurance. Some cars cost a lot more to insure than others. Our friends at Insure.com do an annual ranking of the most expensive and least expensive cars to insure, and allow you to search for the average insurance rate for a vehicle. Look for similar rankings from other sources as well.
You may be able to get a better deal when you’re actually shopping for insurance, but does the average insurance cost for the vehicle you’re looking at fit into your budget?
If a car is often recalled for mechanical issues, that’s a red flag. Check out “What You Need to Know About Car Recalls” to find out about the recall history of the vehicle you’re interested in.
Think outside the box on this one because you’ll more than likely be driving the vehicle for a long while. It may be tempting to purchase that sporty new two-door because the guy two houses down is offering it for an irresistible price. But if you have four kids in tow each day, the purchase just doesn’t make sense.
Do you have any additional suggestions? Let us know in the comments below or on our Facebook page.