When buying a used car, the first thing you need to do is sort out your priorities. Find out what you really want and what can fit in your budget. Figure out and finalize:
- Your price range
- Your flexibility in desires & price
- Your desire
First, figure out what you can really afford, what you really want and then how much you can move up and down in terms of prices and what you're getting.
Once you have your price range, you should understand how the used car market works in America, Canada and some parts of Europe. Cars tend to drop about 15-25% after one year of use, 20-35% after two years and generally about 40-50% by the third or fourth year. This depends on the vehicle condition, mileage, brand and availability. For example, the renowned Toyota Prius tends to sell about less than 10% less than its original invoice after one year of use. This is because of the supply and demand gap which makes people willing to pay nearly full price for a used one, just so they can get it immediately.
Another thing you need to keep in mind is that some brands just have a better resale. Yeah sure Jaguar and Lexus are competitors, but for whatever reason, Jaguars tend to sell a bit lower than Lexus' at the same condition level in the used car market. This means a couple of things :
- It may be smarter to buy a used Jaguar as opposed to a Lexus because you get basically the same value in less price. The only reason its cheaper is because of people's personal opinions saying Lexus is far superior, which in my mind and knowledge is not true.
- When buying a new car, be sure you know what you're doing and understand the used car market too.
Understand The Vehicle's Condition.
Take it for a test drive. Check its brakes. See if the Emergency brake works (put the gear in Neutral, apply the brake and release the normal foot brakes on an incline. See if the car moves) . Use the lights and survey the car to make sure the all the lights work just fine. Check for any problem or blemish, and if any reject the car or accept depending on your price range and kind of car you're looking for.
Also, you may want to browse the internet at sites such as craigslist.com or cars.com who will let you know the estimated price range for a car you're looking at. Read the newspaper for ads and find out local prices for used cars. And then when you find a good deal, because you already know the market and its dynamics, just go and pick it up!
Buying a New Car
When you buy a new car, you have basically two real options : Lease it or buy it.
Leasing it means you'll pay a down payment, generally about 2 000 bucks for a 30-40 000 dollar car, and then you sign an agreement to keep the car for lets say 36 months and every month you pay like 300 dollars. I would only advise this if you have a steady paycheck and you can assure yourself for the next 3 years you can definately afford 300 dollars a month for your car. Then, once the term is over, you give the car back, or pay off the remaining amount and keep the car for good. Otherwise, given that your salary is consistent, you can give it back and sign a new contract for the newer model, still paying about the same.
Buying it is better if you really want the car. If you want it and you're gonna keep it for 10 years, I think you should buy it. You probably already know what that means, just pay the full price and drive away!
Then again, its also very important to know what youre getting into. Here are some things you should take into consideration when getting a new car:
- Engine power - hp & torque
- Tires - brand & size
- Braking system - disc size and type, ABS type, EBD, etc.
- Safety & security - airbags, alarm system, quality brakes and tires
- Resale value (if buying)
- Gas mileage
- Maintenance - Cost of oils, fluids, brake rotors, tires, etc.
Compare these aspects with comparable cars and brands and then analyze whats really best for you.
Also look for car deals and offers generally offered in the winter season, throughout December or so.
Happy car buying.
