You may have heard that a car is the second-largest purchase behind a house, but is that true? It might seem like it, because the median home price in the U.S. was just under $190,000 last year, while a new Honda Civic starts at about one-tenth as much. But you’ll probably own one home at a time, and when you sell it, you should make your money back, and then some. So, technically speaking, cars may cost much more throughout your lifetime.
So why do we sometimes spend months buying a house and dedicate a team of people to the process, but then spend an afternoon buying a car by ourselves? Maybe it’s time to put some more thought into the car-buying process, especially if you are looking at purchasing a used vehicle. You can start by asking yourself a few simple questions.
Why am I buying a used car?
Buying a used car can be a great value for many. Few products lose their value faster than a new car, as its value drops quickly. Buying a one- or two-year-old vehicle can save thousands of dollars off the sticker price of a vehicle, but even buying a used version of this year’s model can be a windfall, because someone else paid for the initial depreciation once the vehicle lost its new car smell.
How do I know if a used car is in good condition?
Even if you know a lot about cars, you should take it to someone else who does. You’re probably not going to be objective, because your bias toward a car you like may lead you to overlook flaws. Also, many dealerships will let you take a used car to a mechanic you trust before you’re ready to buy.
What if I’m buying from a friend or off of Craigslist?
If, for some reason, you can’t take the car to a mechanic – which should make you skeptical – or if you want to find out about a car before you meet up with the seller, ask for a CarFax report. These reports cost around $50 and will tell what you’ll want to know about the car’s history. Many sellers may even cover the cost of the CarFax, because they can use it for the next potential buyer if you don’t buy the car.
What else can I do to protect myself?
No matter if you’re buying from a dealer, a friend, or even your pastor, you should always take a car for a test drive. Find a route that simulates your routine; don’t just drive the route the dealer suggests. Take some turns. Accelerate to freeway speeds. Even take a ride in the back seat. Make sure you actually like the car before you spend thousands.
The first part of buying a used car might not be the most fun, that’s for sure. It’s all about research and preparation. But this is the best way to make sure you get a car you’re going to love for a long time, meaning the more time you put in now; the longer you wait until you need to do it again.
If you’re planning to buy a car soon, the most important thing to know is that you’ll want to contact FSU Credit Union about our auto loans before you go to the dealership. It could save you hundreds or even thousands of dollars. You can find our rates and apply online.
*The content provided in this article consists of the opinions and ideas of FSU Credit Union, does not constitute legal or financial advice, and should be used for informational purposes only. Any decisions you make based on the information contained in this article is made in your sole discretion and liability. FSU Credit Union disclaims any damages or liability for decisions you make based on the information provided.