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Buying a Used Car or Truck Tips You Should Know. What Should I Learn Before Buying A New Vehicle?

Updated on April 9, 2013

Tips on Buying and Financing a Used Car or Truck

My advice is coming from over 15 years in the Retail vehicle market.

There are many things to consider before you head out to your local car dealers to look for your first vehicle or perhaps replacing your current vehicle.

1. Do you want a Manual or Automatic transmission?

Manual transmissions have fewer problems overall.

2. Do you need a two door or four door vehicle?

Two doors are more money to insure as they are considered sports cars.

3. Do you want a car a truck or some kind of minivan, SUV?

The amount of passengers the vehicle is capable of carrying could be important to you in the future.

4.How many cylinders are you looking for?

A four cylinder does not always get better gas mileage than a six cylinder. It all depends how you are going to use the car.

5. Are you going to pay cash or finance the vehicle.

Depending on your credit rating or income status financing a vehicle might be a problem. It is definitely cheaper in the long run to pay cash as you will not be responsible for any finance charges.

6. If financing is your only choice are you going to get a loan from your own bank or are you going to let the dealership set up a loan for you?

Dealerships make money on the loans they write. Lets say they buy the loan for 6.9% they then turn around and sell you the loan at 8.9% thereby making 2% on the financing.

7. Do you have a vehicle now, are you going to trade it?

You can get much more money if you sell the vehicle yourself it just requires time and possibly depending on your state a need to warranty the vehicle for a certain amount of time.

Now that you have an idea of what you are looking for in your next vehicle and how you are going to pay for it time to go out shopping. Searching the Internet will give you an idea of what your local dealers have for inventory and approximately how much they are asking for the car.

Narrow your search down by getting out there and driving as many vehicles as you think you would consider owning.

Dealing With The Salesman

1. Do not discuss your credit with anyone until you find a vehicle that you know you want to buy.

2. Do not mention your trade until you receive the best price on the vehicle your thinking about buying that you can get.

3. Ask if you can bring the vehicle too a mechanic you trust.

If the dealer is hesitant about this then there is something wrong with the car that he does not want you to know.

4. Never negotiate the payment repeat Never negotiate the payment.

The only two things important when you negotiate a vehicle price is 1. How much is the car you want to buy and 2. How much is your trade worth.

5. Keep the price of the car you are buying separate from the car your trading if you are trading a car.

Dealers will try the "give me $5000 and your trade this is a deception as they are combining discounts with the actual value of your trade. This is their game. Do not play it.

Once A Price Is Agreed

If you are paying cash and you found the vehicle of your dreams then your purchase is done. If you are financing through the dealership there is a couple of other things to consider.

1. Extended Warranties? They pay for themselves if something major that is covered by the warranty happens during the warranty period.

The dealer can also charge as much as they want for the warranty and many people do not realize they can negotiate the price of the warranty itself.

2. Insurance? The dealers call it "croak and choke" If you pass away or are disabled during the loan period the insurance covers your payments. Once again this is a highly profitable product for the dealer to sell.

3. Gap Insurance? This insurance will cover loan deficiencies in the event that the vehicle becomes a loss.

4. Dealers also sell multiple other products in their finance office.

Tire warranties, Lo-jack, Remote Starters, Alarms, Undercoating, GPS, DVD players and I am sure there are many others I do not even know about.

The reason I tell you never to negotiate the payment is that by extending term or manipulating rates. (for example going from a 36 month loan to a 72 month loan will drastically lower the payment without affecting the price of the car. Lowering the rate that the payment is worked at will accomplish the same illusion)

The dealer will also add all kinds of extras into the payment whether you want them or not. Then when you sit down to sign the paperwork the finance manager will tell you they included it into the deal. That is a lie you will be paying for every insurance warranty or other product they pack into your payment.

I hope you find this article informative. If you have any further questions on purchasing a used car feel free to contact me. Thank you for taking the time to read my Hub.


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    • profile image

      Breeze 2 years ago

      There are many auto loan options abaliavle today. Today, stiff competition among auto loan financing companiesfinance option. You can apply for online car loans on the Internet, or get it from your car dealer.

    • profile image

      Dinznax 2 years ago

      most credit union are open to the puiblc now, find one in your area and open an account. they normally offer the best interest rates, when you go to the car dealer and tell them you're going to fiance thu a credit union, they will ask you what cu and they will have a current rate chart for that cu and more than likely match the interest rate. also i've been seeing tv ads by some auto makers offering 0% interest for 60 months

    • chloesdad profile image

      Jeff M 3 years ago from Newington NH

      Most people are horrified of the car buying experience but it's not always bad. I only sold cars for a little over a year but I learned a lot of tricks that help me when I go to the dealership.

    • Arthur Fontes profile image

      Arthur Fontes 6 years ago from Fall River,MA

      I am so sorry for your loss.

      Depending on how long you have had the car you might be able to refinance it for a longer term which would lower your payment.

      Another choice would be to trade the vehicle in for a more affordable vehicle. Your main problem is going to be that a 2008 Sable might not be worth $18000, which is OK for a trade-in they will add the balance to the other car. Refinancing will be difficult as the bank will only loan out the value of the vehicle and you would have to pay the remainder upfront. So my advice in your situation is to trade it unless you have very strong credit and a credit union that will work with you.

      The last option would be to give the vehicle back to the bank as a voluntary repossesion. This would lower your credit score temporarily but as long as you have other accounts that remain in good standing your credit should rebound in about one year.

      One last piece of advice, check all your paperwork from when you purchased the car. Many dealers add a life, accident and disability insurance policy to the loan. If you have this insurance the balance of your loan would be erased and you will own the vehicle outright.

      I hope this helps in some way and please if you have any other questions feel free to contact me either through the comments or through my email which is in the upper right of the page.

    • profile image

      Dolly 6 years ago

      My husband just passed away and the car payment I am making is too expensive...We have a truck that is paid for that only has 43000 miles on it ...I owe about 18000 on the car ...the car is a 2008 mercury sable with 49000 on it ...I love the car but making the payments is really going to be difficult...what is your financial advice. I don't know if anyone would want to buy the car since it is so large .even though it gets 30-35 mpg on the drives like dream and I love it BUT....YOU probably already know the but...please give me some good solid advice ,"financially"

    • profile image

      Lori Catz 7 years ago

      It's also a good idea to purchase a warranty for a used vehicle. Arthur is right about proper maintenance, but sometimes some issues you just can't avoid. Not to mention not everyone knows how or is able to afford ongoing maintenance.

    • Arthur Fontes profile image

      Arthur Fontes 7 years ago from Fall River,MA

      Novak If proper maintenance is done during the life of a vehicle the amount of time you own the car without major repairs will improve. Use only fluids designated by manufacturer.

    • profile image

      Novak  7 years ago

      Another important question to ask yourself when buying a used vehicle is how long will the vehicle last vs. how long the term of your loan is (if you go that route). You certainly don't want your vehicle to be non-drivable when you're still making payments on it. Research the lifespans of vehicles (or their brand in general) prior to making a decision.

    • profile image

      richie 7 years ago

      I like the article

    • Arthur Fontes profile image

      Arthur Fontes 7 years ago from Fall River,MA

      kelvin I have trucks for sale!!!!!!

    • profile image

      kelvin 7 years ago

      I want a truck

    • Arthur Fontes profile image

      Arthur Fontes 8 years ago from Fall River,MA

      You are correct emotions are the salesmen's best tool. (Sell the Sizzle) I plan on expanding on the subject some more in future hubs. I live the car salesman's life every day and I am prepared to expose many aspects of the industry. I hope you stay tuned.

    • ehern33 profile image

      ehern33 8 years ago

      Good points to remember. It takes some practice and discipline. One other thing I would do is leave your emotions at home. If you can't get what you want from a dealer, go to the next one. Someone will be willing to work with you.