When you are planning to buy a used vehicle, you want to get a good deal on a vehicle that is going to run well and work for you. To help you prepare for and search for the right used vehicle, here are three tips to get you successfully through the process.
Calculate What You Can Afford
Before you begin to shop for a vehicle, you need to determine how much you can afford for your vehicle. It is recommended as a guideline to buy a vehicle that has a monthly payment of no more than 20 percent of your monthly take home pay. So, if your take home pay is $3,000, you can allow yourself a monthly loan payment of up to approximately $600 per month for your vehicle purchase.
Then, keep in mind that you are not only going to be paying for a loan payment and insurance, you will also need to budget for new tires, oil changes, fuel, yearly registration, emission and inspection fees, and any other maintenance and repairs. According to AAA, the cost of ownership for an average vehicle driven 15,000 miles per year adds up to $8,698 yearly or approximately $725 a month.
As a last step, make sure you have the extra monthly income for all the expenses associated with your used vehicle. Add up all your monthly expenses and subtract them from your take home pay to determine how much extra income you have to cover your vehicle's costs.
Get Your Financing Approved
After you have determined how much each month you can afford on your used car purchase, it is time to get approved for bank financing. Unless you have the cash on hand to pay for the purchase price of a used vehicle, you will need to borrow the funds from a bank. And getting pre-qualified before you start shopping for a vehicle will help you to know what your total purchase limit is.
A good place to start shopping for a loan is with a bank or credit union you already do business with. They will have a record of your history with them as a customer and any credit history you have with them. Your bank or credit union will also look at your credit report to see how you have been paying on your other obligations. This information along with your income and job history will help them make a decision on your loan pre-qualification.
Traditionally, the better your credit and higher your credit score, the lower the interest rate you can qualify for on an auto loan. A lower interest rate will make your payment lower and afford you more buying power on the vehicle purchase. For example, to illustrate the difference, a $15,000 vehicle purchase financed over five years at 3 percent and 9 percent would cost you a monthly payment of $269.53 and $311.38, respectively.
Inspect and Test Drive the Vehicle
Once you have found a vehicle you like and can afford, it is time to make sure it is a reliable vehicle. Take the vehicle for a test drive, including over residential streets and on the freeway at higher speeds to see how the vehicle performs under various conditions. Then, when the vehicle has passed your qualifications during the test drive, it is important to take the vehicle for an inspection by an offsite, independent mechanic. The dealership or individual selling the used vehicle should have no problem with you getting the vehicle inspected before you buy it if they have nothing to hide. If the vehicle seller will not let you take the vehicle to be inspected, you should walk away from the deal and look for another vehicle to buy.
Call around your area to find a local mechanic to do an inspection for you, or ask a mechanic you already know. You can expect to pay anywhere from $100 to $200 for a used car inspection. During the inspect, the mechanic will look through the vehicle for problems, such as mechanical trouble or indications the vehicle has been in a crash.
Use this information to help you when looking to buy something like a pre owned Ford for sale.
Share10 August 2016
Hi there, my name is Pete. Welcome to my website. When I was in college, I purchased my first car from a private seller. The car immediately broke down on my way home from the seller's location. I was stuck with fixing the vehicle before I could even start driving it. From then on, whenever I needed to buy a new or used car, I went straight to the auto dealer lot. Auto dealers make sure the vehicles sold on their lots are in great shape and will last for miles before needing any repairs. I will use this site to explore the things to look for in a good auto dealer lot. I hope you will come back often to learn about this important subject.