10 Steps to Buying a Used Car

The following steps will tell you how to locate, price and negotiate to buy the car you want. If you still don’t know what car to buy, read 10 Steps to Finding the Right Car for You and then come back after you have decided.

Step 1: Starting Out
If you’ve decided to buy a used car, you’ve already made a smart decision. You can get a car that’s almost as good as a brand-new one, without suffering the depreciation that strikes new car buyers as soon as they drive the car off the lot. Used cars - even those that are only one year old - are 20 to 30 percent cheaper than new cars. But there are other good reasons to buy a used car:

• Buying a used car means you can afford a model with more luxury/performance.
• You’ll save money on insurance.
• Bigger bargains are possible for the smart used car shopper.
• Furthermore, the classic reasons to avoid used cars - lack of reliability and the expense of repairs - are less of an issue.

Consider these related thoughts:

• Used cars are more reliable today than ever before.
• Some used cars are still under the factory warranty.
• Many new carmakers now sell certified used cars, which include warranties.

True, you can’t be the first one on the block with the trendiest vehicle. But your consolation will come with the knowledge that you got a great deal and made a smart financial decision. So read on, as we guide you along the road to used car happiness.

Step 2: Locating the Right Used Car.
At the beginning of the car-buying process, many people already have in mind the car they want. But it’s a good idea to stop right now and ask yourself: Will this car fit into my monthly budget? We’ll explain how to determine what car you can afford in the next step. For now, make sure your choice isn’t obviously exceeding your budget. Does it meet my current driving needs? For more on this subject, refer to 10 Steps to Finding the Right Car.

It’s possible that you need to expand your horizons when considering what to buy. You might want to think of other vehicles in the same class. For example, if you are considering a Maruti Alto you should also look at the Hyundai Santro and Daewoo Matiz. These cars were built for the same market, but they are available at lower prices.

Step 3: Used Car Bargains.
The cost of a used car is based on its condition, mileage, reliability, performance and popularity. Of course, you want a car that is reliable and performs well. But do you want the same used car everyone else wants? If so, you will pay a premium for it. In some cases, the only difference is the nameplate.

How much difference in price separates good-but-popular cars from the good-but-overlooked counterparts?

Step 4: Research Your Prospective Used Car.
You will find all the information you need to make an informed decision about what to buy on the IndiaAutomobile.com Used Cars pages. We are constantly incerasing our database of used cars across the country through a growing network of partner dealers and a large user database.

One last vital step to getting a great used car deal: you must check the vehicle’s history by asking for the documents possessed by the owners. It will give you a pretty decent picture of the woes that the car may have undergone. Also, be cautious of cars which appear old but have a low mileage reading. It is possible that the odometer may have been reset or manipulated by the owner.

Hence the case of buying a Certified Used Car like the ones offered by Maruti True Value, First Choice and My TVS. You always have their warranty to fall back upon in case you later realise that you have not got what was promised to you.

Step 5: How Much can you Afford?
The smart shopper will consider how to finance the car at the beginning of the shopping process. This will avoid unpleasant surprises later in the game and help you make an unemotional decision that fits your budget.

You will need to estimate three figures that will guide you as you go shopping:

Monthly Payment. If you are going to take out a loan, how much can you afford to pay each month? Also note that many loan providers treat Used Car Loans as Personal Loans and the interest rates may tend to be quite high.

Down Payment. How much cash can you put down to reduce your monthly payments?

Purchase Price of the Car. Answering the first two questions will help you determine a realistic price range for your used car.

Once you’ve determined how much you can spend for a down payment, a monthly payment and the purchase price of the car, print out these figures. Later, in the heat of the moment, when you are negotiating for a used car, you might need to check the card to bring yourself back to earth.

Step 6: Set up Financing for Your Used Car.
You have three ways to pay for your used car:

1. Cash. Need we say more? Money talks, as always.
2. Financing through a Loan Provider. We recommend this route because it will usually save money and give the consumer the most control over the transaction.
3. Financing through the Dealer. This can work for some people depending on the interest rates offered by the dealer’s finance partner. By prearranging financing through an independent source, the dealer may sometimes offer a relatively low-interest loan.

Step 7: Deciding where to buy from
The three most common places to buy a used car are:

1. Private Parties
2. New Car Dealerships
3. Used Car Lots

Of these sources, private parties usually have the most reasonable prices. It is also a more relaxed transaction to buy a used car from a private party rather than to face a salesman at a dealership.

Still, there are advantages to buying a used car from a new car dealership. Many used cars, on new car lots, are trade-ins. Dealerships usually get these cars at rock-bottom prices. If you make a low offer - but one that gives them some profit - you just might get a great deal. Furthermore, many dealerships offer certified used cars that have been thoroughly inspected and are backed by attractive warranties.

Search for your car by using Internet sites such as our IndiaAutomobile.com or the classifieds section of your local newspaper. IndiaAutomobile.com allows you to search specific criteria such as make, model, options and price range.

While the Internet is an amazing resource, you should still try the conventional sources. Ask friends and relatives if they are selling a used car. Scan the bulletin boards at your organization.

A lot of time can be saved by calling the party selling the car before you go to see the vehicle. In this way, you can eliminate cars that have problems such as excessive mileage. Also, verify the asking price in the ad.

After talking to the seller, set up an appointment for a test drive. If possible, make this appointment during the day so you can more accurately determine the car’s condition. Also, ask for the VIN number so you can run a Carfax report. At the beginning of your used car-buying process you should sign up with Carfax to get its 30 day unlimited car reports service. Every time you get a line on a used car, run the VIN. This will tell you if the car is clean.

Step 8: Test Driving a Used Car.
Used car shopping will involve inspecting the vehicle to determine its condition. This process is simplified if you buy a certified used car that has passed a thorough inspection and is backed by a manufacturer’s warranty. But while buying a certified used car removes a lot of the guesswork about the vehicle’s mechanical condition, you pay for this service.

Most new cars are sold with a two to three-year warranty. Therefore, if you buy a car that is from one to three years old, it will still be under the factory warranty. If anything goes wrong with the car you just bought, the problem will be fixed for free. (Warranties vary from one manufacturer to the next. Always read the restrictions of the warranty before buying the car.)

If you are serious about buying a used car but have doubts about its condition, take it to a mechanic you trust. A private party will probably allow you to do this without much resistance. But at a dealership, it might be more difficult. If it is a certified used car, there is no reason to take it to a mechanic.

Once you get behind the wheel, your first impression will be the way the car feels when you sit in it. Is it a good fit? Does it offer enough headroom? Legroom? Are the gauges and controls conveniently positioned?

Try to arrange your test drive so that you start the engine when it is completely cold. Some cars are harder to start when they are dead cold and, when doing so, will reveal chronic problems. Turn off the radio before you begin driving - you want to hear the engine and concentrate on the driving experience.

On the test drive, evaluate these additional points:

• Acceleration from a stop
• Visibility (Check for blind spots)
• Engine noise
• Passing acceleration (Does it downshift quickly and smoothly?)
• Hill-climbing power
• Braking
• Cornering
• Suspension (How does it ride?)
• Rattles and squeaks
• Cargo space

On the test drive, take your time and be sure to simulate the conditions of your normal driving patterns. If you do a lot of highway driving, be sure to go on the highway and take the car up to 70 kmph. If you go uphill, test the car on a steep slope. You don’t want to find out - after you’ve bought the car - that it doesn’t perform as needed.

After the test drive, ask the owner if you can see the service records and if receipts are available. If so, note whether the car has had oil changes at regular intervals (at every 10,000 km). Be cautious of buying a car that has had major repairs such as transmission rebuilds, valve jobs or engine overhauls.

After talking to the seller, set up an appointment for a test drive. If possible, make this appointment during the day so you can more accurately determine the car’s condition.

Step 9: Negotiating for a Used Car.
Whether you are buying a used car from a dealer or a private party, let them know you have the cash in hand (or financing arranged) to make a deal on the spot. Preface your offer with a statement like, “I’m ready to make a deal now. I can give you cash (or a cashier’s cheque) now. But we need to talk about the price.”

At this point, you need to have a persuasive argument about why the price is too high. So let’s talk about pricing. The foundation of successful negotiation is information. This is particularly true when buying a used car. And yet, the condition of used cars means prices will vary widely.

You can get an extremely fair idea of the car’s pricing by checking for similar cars on IndiaAutomobile.com. We are also making an effort to get you an Online Car Valuation Tool.

Dealers have lots of experience negotiating. Most private parties do not. Therefore, buying a used car from a dealer or a private party will be two very different experiences. But there is one overriding similarity - they both want to sell the car. In fact, the incentive to sell the car might be greater to the dealer than to the private party owner.

You should, however, follow these guidelines when negotiating:

• Only enter into negotiations with a salesperson you feel comfortable with
• Make an opening offer that is low, but in the ballpark
• Decide ahead of time how high you will go and leave when your limit’s reached
• Walk out - this is your strongest negotiating tool
• Be patient - plan to spend an hour or more negotiating
• Leave the dealership if you get tired or hungry
• Don’t be distracted by pitches for related items such as extended warranties or anti- theft devices
• Expect a “closer” (another salesman you’ve haven’t previously dealt with) to try to improve the deal before you reach a final price

Once you have a deal, you need to make sure the transaction is completed properly. The next section, which is the final step, will tell you what to expect and what you need to do.

Step 10: Closing the deal.
If you are at a dealership, you still have to go through the finance and insurance process. If you are buying a car from a private party, you have to make sure that payment is made and the title and registration are properly transferred.

In both cases, you also need to make sure you have insurance for the car you just bought before you drive it away. Some people swear by extended warranties, so this is something you might want to consider (unless your used car is certified or still under the manufacturer’s warranty).

Finally, you should inspect the car before you take possession of it. If any repair work is required, and has been promised by the dealer, get it in writing. Make sure the temporary registration has been put in the proper place and - you’re finally on your way.

When you buy a car from a private party, you will probably be asked to pay with a cashier’s cheque or in cash. But before money changes hands, request the title and have it signed over to you.

Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used car.