Getting a used car

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simplesimon
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Getting a used car

Post by simplesimon »

I'm currently in the process of getting a pre-approved loan from my credit union to purchase a used car. I'm getting offers for warranties and other stuff that I'm not too familiar with (first time car buyer). I turn to the collective wisdom of the Bogleheads forum to seek guidance on what you all think the best way to buy, haggle, finance, and insure this purchase. Any feedback is appreciated, thank you!
hicabob
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Re: Getting a used car

Post by hicabob »

As a first timer I'd suggest looking and test driving a lot of cars before you decide on anything - used car dealers are trained to be pushy but if you have the right attitude the process is not so bad. When you have decided on the perfect model for yourself then look at some private party vehicles also ... and when you have found a gem, spend the $100 or so to have a mechanic give it the once over.
Savvy
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Re: Getting a used car

Post by Savvy »

Just bought a used 2010 Honda Civic in March.

Determine what make/model/trim/year you want. Of course, this may be done through reading online reviews and test driving. The hunt for a car will then become much simpler when you actually start discussing prices with dealers. Don't let them make you feel stupid when they say "Wait, what's wrong with the 2011 version? Why are you only open to the 2010?" For us, everything was overwhelming until we could finally simply say, "We want a 2010 Honda Civic, what do you have to offer?"
btenny
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Re: Getting a used car

Post by btenny »

Have you figured out what type of car you want? If not I suggest you spend several hours surfing and reading the internet about cars. See below for Edmunds and Autotrader, two web sites that have lots of car buying info and prices and reviews. All the info on these sites is free. Consumer Reports is also very good but you have to go to the library to read those as they are for $$ books and web sites. After you read these come back and ask some more questions. Also start driving some cars at the dealers near your home to figure out what type of car you want. Tell the dealer that you are just shopping at this point and do not want to buy. He will say OK and not push you too much. Don't spend any time with them talking price. DO NOT GO INSIDE AND SET DOWN. Car sales guys are sneaky and can talk a eskimo into buying ice. Focus on the car features and what you like and the sticker price only. Do you want a SUV, a economy sedan, a truck, or ?? What can you afford to spend, etc.? Make a list of the cars you like and the list prices. Spend time studying the list and what you want.

http://www.autotrader.com/research/used-cars/index.jsp

http://www.edmunds.com/?mktcat=edmunds& ... d=ga335402

Then after this time period and some decision making on your part will you are ready to really focus on buying. In my experience this usually takes around 2-4 weeks to do all this visiting and deciding on what cars you can afford and what is available in the market. Then you can get serious about really buying car and all the price negotiation and warranty issues and certified cars and so forth. So for now don't worry about that stuff.

Good Luck
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simplesimon
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Re: Getting a used car

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Then after this time period and some decision making on your part will you are ready to really focus on buying. In my experience this usually takes around 2-4 weeks to do all this visiting and deciding on what cars you can afford and what is available in the market. Then you can get serious about really buying car and all the price negotiation and warranty issues and certified cars and so forth. So for now don't worry about that stuff.
I should have mentioned that I took the time to figure out the year/make/model that I wanted. Any suggestions about "the other stuff" (e.g. warranty, certified cars, price negotiation)? Thank you all for the replies!
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JupiterJones
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Re: Getting a used car

Post by JupiterJones »

My advice is to not take out a loan for a car.

I would also avoid paying for any sort of extra warranty. They make a lot of money for the people selling it, which means, mathematically, they are typically rip-offs for you. A good emergency fund is all the "warranty" anyone needs. (And if you don't have a good emergency fund, then you don't need to be buying a car.)
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Default User BR
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Re: Getting a used car

Post by Default User BR »

JupiterJones wrote:My advice is to not take out a loan for a car.
I was always a cash buyer for vehicles in the past. With the current low rates, were I to buy one now I'd sure try to get a loan for it.


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simplesimon
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Re: Getting a used car

Post by simplesimon »

I would pay it in all cash if I could but I need the car to get to work, which pays me the $.
Default User BR
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Re: Getting a used car

Post by Default User BR »

simplesimon wrote:I would pay it in all cash if I could but I need the car to get to work, which pays me the $.
If you haven't already, look at PenFed: https://www.penfed.org/Auto-Loans-Overview/


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Re: Getting a used car

Post by LadyGeek »

This thread is now in the Personal Consumer Issues forum (how to buy a car).
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mike143
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Re: Getting a used car

Post by mike143 »

I doubt your credit union will beat PenFed 1.74% (My wife's car is current financed with them at 1.49%, from Honda's 1.99%). I would suggest a Honda or Toyota of any model, others will suggest other makes but I go with those that have historical reliability and lowest cost of ownership. I see Honda and Toyota as the mutual funds of the auto industry, while there are no guarantees, they are usually a sure bet. Personally I have owned a few Honda's with 200+k and 400+k, I didn't put on the miles but they were the original engine and transmissions (always manual transmissions). I currently drive a 04 Honda Accord LX I4/2.4L Sedan Manual Transmission with 168k, I will be keeping it until repairs (I do it all myself) cost more than its value or it is totaled. Good luck with your journey.
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tylerdurden
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Re: Getting a used car

Post by tylerdurden »

From your mention of warranty offers, I assume you are buying the car from a dealership. If you are, make sure you have them provide you with a Carfax report (or something equivalent) for the car, so you know the car's history. If you are buying it from an individual, then definitely get a Carfax background check for it. I have learned the hard way to do that with all used cars now. I unfortunately bought a car without doing a background check, and regretted it when trying to sell the car and finding out about it (and having to lower the price as a result).

Once you have the car picked out, it comes down to a balance between you needing the car vs. getting the price you want. For negotiation to work, you have to be able to walk away from the car and start your search over someplace else. There is generally more room to negotiate with a used car since dealerships get them for very low prices via trade-ins and auctions. However, the particular car you're interested can drive a lot of the negotiating options.

I tend to stay away from extended warranties. Many newer cars will still have their manufacturer warranties active, so an extended warranty isn't always necessary. Plus I know that commissions tend to be a lot higher on extended warranties, so they are pushed for that reason moreso than a car actually needing them.

So what year/make/model did you pick out?
"The things you own end up owning you." -TD
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simplesimon
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Re: Getting a used car

Post by simplesimon »

So what year/make/model did you pick out?
I decided on a 2009 Subaru Outback.
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mike143
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Re: Getting a used car

Post by mike143 »

tylerdurden wrote:From your mention of warranty offers, I assume you are buying the car from a dealership. If you are, make sure you have them provide you with a Carfax report (or something equivalent) for the car, so you know the car's history. If you are buying it from an individual, then definitely get a Carfax background check for it. I have learned the hard way to do that with all used cars now. I unfortunately bought a car without doing a background check, and regretted it when trying to sell the car and finding out about it (and having to lower the price as a result).
There was recently a tv program on CarFax not having complete information and their competitor AutoCheck did. I have own(ed) three vehicles that were clean on CarFax but had been in minor accidents (hood, fenders, bumpers, etc. replaced). Neither CarFax or AutoCheck are complete, you should really have a quality mechanic and/or body man take a look at it. After I figured out the damage to my cars, after the fact, now I know what to look for.
Nothing is free, someone pays...You can't spend your way to financial freedom.
MnD
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Re: Getting a used car

Post by MnD »

Get the subscription to carfax that lets you look up any number of vehicles for 30 days.
Decide exactly what year model make trim level you want.
Buy a car from an individual who is the only owner or a second long-term owner.
In either case only buy it if he/she has all of their service records to inspect.
Get the vehicle inspected and find out the cost of any needed service or repairs.
Make sure the major services are up to date or ask for a big discount to cover the cost.
If a car with 62K miles hasn't had the 60K service and needs tires and brakes, pay well under the going rate for that vehicle.
Drive the car up a long hill (several miles) at highway speeds if you have one in the area. If something is going to misbehave, it will be more likely to do so on that drive.
Don't pay 1 dime more than what Blue Book or Edmunds private party sale price is. Maybe take an average of those two prices. Offer somewhat less than that price and allow them to raise you exactly once if you really want that exact car - or keep shopping.
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