How To Find a Car With a Used Car Checklist
Buying a car is supposed to be a fun process. For some people it ends up being a lengthy, exhausting one because they have no idea how to choose a car. If you can relate with this kind of frustration, this post is for you.
Learning how to choose a car to buy can be the difference between a good decision and a bad decision you will regret for a long time. The options are endless. With an uncountable number of makes, models and new ones being released every other month, a process which should be exciting can end up being exhausting.
Some people begin the process of selection, get intimidated by the choices and end up buying a newer version of what they had before; effectively ignoring all the other options available.
For others the decision is more or less made by a friend. A friend of yours buys a new car, you love it so you decide to get one exactly like that.
Here are a few tips which will help you quickly narrow down your options and hopefully enjoy the process rather than end up feeling confused and overwhelmed.
Next time a friend comes up to you and says ‘what car should I buy? I am confused because…’ and proceeds to give you an earful of car features and prices, you will have some useful advice.
1. Needs vs. Wants
First of all, establish if you really need a car at all. If you do then figure out what you need the car for. Be honest enough with yourself to differentiate your needs and wants.
Write down in order of priority the features you really do need in a car. If you have a big family for example, you do need a car big enough to accommodate everyone.
4×4 SUVs are definitely very appealing but if you don’t go off-roading often and don’t transport heavy loads, you don’t need a 4 wheeler so be sure to include it in your list under wants and not needs. If you live in a part of the country where you are likely to find yourself stuck in mud or snow, a 4 wheel drive may be a need.
A common mistake is to look for a ‘Swiss knife’ kind of a car. That is a car that prepares you for virtually every situation you will ever find yourself in.
If you do find one, you will end up paying for lots of features you hardly ever use. This is where prioritizing comes in handy. Establish which characteristics in a car you will need more than 70% of the time and go with those.
2. Consider the Cost
Majority of car buyers don’t have the full amount of money required stashed away somewhere. Most people have to take out a car loan. If that is the case, you have to consider the monthly repayment amounts.
The general rule is that your car repayments should not exceed 15% of your net income. This leaves you enough to cater for other monthly obligations like rent, food and other bills.
Also take into account running costs like fuel, maintenance, car insurance and inspections. There are lots of car loan calculators available online. Use one of these to establish exactly how much you can afford.
3. Use a Car Finder Tool
Most automotive websites have tools which only require you to key in you budget and perhaps preferred style and they narrow down your options to several makes and models.
Once you know how much you can afford to spend and are clear on the size of car you are looking for, visit a few automotive websites, key in these details and see what comes up. From this come up with a list of 5 cars which you are considering.
4. Do Some Research
Visit car review websites: Take time to watch reviews of the 5 cars you have selected. Also look at reviews of other cars which are similar to the five you have on your list.
Car reviews will give you just about everything you need to know about a specific car’s features, strengths, misgivings and general performance. Watch reviews from car experts, manufacturers and car owners.
Reviews from car owners are always more balanced than those from manufacturers so be sure to get views from all these groups.
Read up on local car dealerships online: Look out for larger dealerships which have been in operation for at least several years. Read online reviews about the dealerships and compare scores.
Read customer experience testimonials to find out what past customers were happy or unhappy about.
Identify dealerships with on-going sales: There is always an ongoing sale somewhere. Find the sales and compare sale prices with regular prices in other dealerships.
You may be surprised to find a car which is priced above your budget falls within your budget thanks to a sale. If you do come across a sale you could take advantage of, find out how long it lasts and figure out if you can make a decision and payments within the time limit.
5. Schedule a Test Drive
Once you have taken all the above steps, you should be able to narrow down further to 3 cars. Identify dealerships which stock these 3 cars and schedule test drives for each of them.
There is a popular saying among car sales people – ‘the feel of the wheel will seal the deal.’ There is a lot of truth in it. You may love everything you have read and heard about a car but when you get behind the wheel you just don’t feel as good about it as you do about another one. It is perfectly normal.
It would be ideal to find one dealership with all 3 cars. Set aside one morning for all 3 test drives so all your impressions are fresh in your mind when making a final decision.
You will come across many thoughts and opinions on how to decide what car to buy but a test drive is always recommended no matter how you go about it.
What About a Salvage Car
How to Get a Salvage Title Cleared
A salvage title vehicle is one which has suffered significant damage and an insurance company has opted to compensate the owner for it rather than bear the cost of repairs.
Generally a vehicle is considered for salvage title branding when the estimated cost of repairs exceeds a certain percentage (usually between 75% and 90%) of the value of the vehicle.
The typical process is that the insurance company sells the vehicle to a salvage company which is free to repair it and resell it. It could also be sold as it is directly to someone willing to bear the cost of repairs to get it back to full operation.
Car lovers are common buyers of such vehicles because they enjoy the challenge of gradually repairing a car until it is functional again. The idea of reviving a machine which was headed for the junk yard is the pleasure they are looking for.
Let’s assume that you bought a salvaged diamond in the rough, fixed it up and it is now ready to be put back on the road. You can’t just drive out onto the street. It is considered unsafe and it cannot be registered or insured. It is actually illegal to drive a salvage title car under the brand. You have to get into the process of clearing the title.
Can A Salvage Title Be Cleared?
Yes. A salvage title can be cleared. Once you have done all the necessary repairs on your salvaged vehicle and it is fit to be put back on the road, the salvage title can be cleared and the vehicle assigned a new brand known as rebuilt title.
This kind of title goes by different names in different states. Some states call it ‘restored’ or ‘reconstructed.’ In other states, these cars receive a cleared title with the word ‘salvage’ included.
There is a lot of confusion between the terms ‘clear’ and ‘clean. It is important to understand that the two do not refer to the same thing.
A cleared title tells a potential buyer that the vehicle has had a different title in the past and certain changes have been made on the vehicle to have the previous title cleared and a new one assigned.
If you are a buyer looking to buy a car, this tells you there is need for further investigation to find out exactly what title it had before it was changed to its current title.
Clean title on the other hand tells a potential buyer that the car has never had a different title and has a spotless history.
Steps to Clear Salvage Title on a Vehicle
Many of the details in this process are dependent on the specific state you live in so be sure to follow state- specific rules. Don’t assume the legal requirements are the same all over the country.
There are 4 basic steps to follow to clear a salvage title are:
1. Purchase The Vehicle
Simply purchasing a salvaged vehicle may sound straight forward but it is actually impossible for an individual to buy a salvaged car in some states.
Here the state requires that these vehicles are sold to licensed re-builders who do all the repair work needed and sell the car when is fit to be driven on the road.
If your state laws allow you to purchase such vehicles from re-builders, make sure you have a certified mechanic by your side before you make any payments. The mechanic will give you a clear picture of what repairs need to be done and roughly what they will cost you. This way you know what to expect to spend to get it back on the road.
2. Repair The Vehicle
If you are not a certified mechanic, this is not the time to test your mechanical skills. Only attempt to do the repairs yourself if you are absolutely sure of what you are doing.
If not, have a professional do the repairs. Take clear, colored pictures of the vehicle at every stage of the rebuilding process.
Make sure you have pictures from all possible angles. It is also important to keep a record of all the money you spend on repairs. Keep all receipts for parts you buy and labor fees paid to the mechanic.
3. Have The Vehicle Inspected
Once all repairs are complete, the state has to certify the vehicle as roadworthy. To have it inspected, obtain the requisite forms from the DMV (Department of Motor vehicles) and fill them out.
You will be required to attach all the receipts as proof of money spent. You will also need to present the pictures documenting the entire repair process. Once all the paperwork is submitted, schedule the inspection and present the vehicle for inspection. You will be required to pay an inspection fee.
Remember it is still illegal to drive the vehicle so you will probably have to have it towed to the inspection facility. Once the vehicle passes, the DMV inspector attaches a decal to it confirming that it has passed.
4. Apply For Re-Branded Title
The final step is to apply for a re-branded title. For this you will need to fill another set of forms and pay more fees. After this you will receive the re-branded title with a statement on its face stating that the vehicle has been rebuilt.
As stated earlier, specific details pertaining to this process vary from one state to the other. If the vehicle received a salvage title in another state, is easiest to have it inspected and re-branded in that state and then have it registered at home.
Always familiarize yourself with specifics of salvage vehicle re-branding processes in your state before you buy a salvaged vehicle.
Once the process is complete and the vehicle is registered, some insurance companies will be willing to insure the vehicle and if you wish to sell it, it will definitely fetch a higher price than when it had a salvage title.
Can You Undo Salvage Title?
Once a vehicle is branded as a salvage and then re-branded as rebuilt, the salvage title brand remains in its history. It can never be undone or reversed. The vehicle will never have a clean title.
Anyone who knows a thing or two about vehicle history reporting will see the word ‘rebuilt’ on a title and immediately know that the vehicle had a salvage title brand before it acquired its current brand.
What About The History Of The Car
How Long Does It Take To Get A Carfax Report?
It is unlikely that a used car buyer is unaware of the need for a vehicle history report but many buyers opt to transact without it because they believe it is too much trouble to get one.
How long does it take to get a Carfax report? This post tells you just how easy it is to get one.
Purchasing a used vehicle can be challenging if you have no idea of the vehicles history. The salesman will tell you everything you want to hear just to make the sale, only for you to be faced with a myriad of problems a few weeks later. When there is no way to confirm what he says, it can boil down to a gamble as to whether the vehicle really is worth what you are paying for it.
A Carfax report solves this problem by providing a summarized history of individual vehicles to help potential buyers make an informed decision when the vehicle is up for sale.
What Is a Carfax Report?
If you have ever gone through the frustrating experience of wondering if the car salesman at the dealership is being totally honest about the car you want to buy, then you appreciate the need for a vehicle history report.
This kind of report is often referred to as a Carfax report although Carfax.com is just one of two leading companies from which you can obtain a vehicle history report.
It gives you details of the vehicles history which help you make an informed decision as to whether to buy it or not.
The other leading company you could use to get a vehicle history report is AutoCheck.com which is a division of credit reporting bureau Experian.
How Do I Get A Free Carfax Report?
Some used car dealers have Carfax reports for all the vehicles they have on for sale. These reports are shown to potential buyers as proof that all information they have given about the individual vehicle is correct.
Giving a potential buyer a Carfax report is beneficial to both the seller and the buyer. It is a sign of good faith that the seller is not out to conceal any information about the car’s history.
It also saves the buyer the money, time and energy he would have spent trying to obtain the report for himself.
Some lenders obtain a Carfax report on behalf of a borrower seeking financing to purchase a vehicle. It is in the lenders best interest to confirm that the asset they are financing is indeed sufficient collateral for the loan.
If you wish to obtain a report for a vehicle which is not linked to a dealer or a lender, you can purchase a vehicle history report from Carfax or AutoCheck for between $25 and $40. It is important to note that a vehicle history report is only valid for 30 days after release.
Are Carfax Reports Instant?
How long does it take to get a Carfax report? Simply fill out an online form and provide the VIN (vehicle identification number.) You should be able to receive the report immediately.
The vehicle’s identification number is found at the bottom corner of the windshield on the driver’s side. Always make sure that the VIN on the vehicle matches the one in the report.
What Is Included In A Carfax Report?
When purchasing a used car, service history is one of the most important aspects. With these reports, buyers can check car service history online along with many other details. These are some details included in a Carfax report.
Accident history. Carfax, AutoCheck and other vehicle history report providers gather data from law enforcement agencies, motor vehicle departments, insurance companies, repair shops and update their databases regularly.
History of other forms of damage. Some forms of damage such as those caused by fire, hail or floods are not classified under accident damage but are worth recording. Hail damage can usually be repaired safely but stay away from flood damaged or fire damaged vehicles because these can cause damage which can compromise the safety of the car.
Title history. Stay away from a vehicle with a salvage title. This means the vehicle was once involved in a serious accident and was declared a write-off.
Number of owners. How many people have owned this vehicle since it was manufactured? An abnormally high number of owners over a short period of time is a red light.
Inspection and registration history. All states in America require safety, emissions and other inspections be done regularly. These inspections provide valuable data for vehicle history report providers.
What Is Not Included In A Carfax Report?
Whether you are dealing with Carfax, AutoCheck, or any other vehicle history report provider, it is impossible to get 100% accuracy on every vehicle.
The report you receive gives details as they occur. If anything happened to the car between the last report and the time you come into contact with it, it will probably not be included in the report. It is also important to keep in mind that information in a Carfax report must have been reported by someone.
If anything happened to the vehicle and it was not reported, it does not appear in the report. It is not unheard of for a car to be involved in an accident, get repaired and sold before notice of the accident and repairs gets into the databases these reporting companies use.
The report also doesn’t include details of mechanical problems like worn brakes which could greatly compromise the safety of the car.
Can I Lease A Used Car And Does It Make Financial Sense?
Car leasing first gained popularity through large corporates which wanted to provide the latest models of luxury vehicles to their senior staff without incurring the full cost of purchase. Lease periods would end just in time for release of a new model of another luxury vehicle.
It later gained popularity among individuals who are happy to make monthly lease payments in exchange for the pleasure of driving the latest, fanciest SUV without having to buy it. Used car leasing is simply a development of this.
Some people want the benefits of auto leasing and do not mind driving a slightly older car if it will save them a few hundred dollars.
How Does Car Leasing Work?
Car leasing is essentially renting a car for an extended period of time (usually 36 – 48 months.) It is different from buying a car in that when you buy a car, you incur a cost equivalent to its value at the point of purchase.
Whether you pay cash, obtain a loan or negotiate a trade-in, the full value of the car must be paid. In the case of leasing, you only pay the cost of depreciation, which is the difference in value today and expected value at the time the lease ends, plus interest and fees.
Let’s take a hypothetical example. You find your dream SUV is up for sale or lease. The price tag on it is $30,000. If you buy it, you will need to pay the full amount at once.
If you lease it for 3 years, (it is expected to be worth $20,000 in 3 years) you will be required to pay the $10,000 expected depreciation plus interest and fees. This amount is broken down into monthly payments over the 36 months.
At the end of the lease period, you pay some lease-end costs and walk away. Some dealers may offer to sell you the car at a reduced price but you are under no obligation to do so.
In regard to used car leasing, the situation could arise as a result of various circumstances. It could be a direct lease of the used vehicle, you could be taking over a lease on a car that was turned in earlier than anticipated, or it could be a takeover lease where a lease holder needs someone else to take the lease and assume responsibility for monthly payments.
Benefits of leasing a used car
A large chunk of lease payment costs can be attributed to depreciation. A car depreciates heavily in the first 3 years of its life after which the depreciation rate drops significantly. This is why monthly lease payments for a used car are much lower than for a new car.
If your primary aim is to keep your expenses low, it may be a good idea to lease a used car. Typical monthly payments for any car lease are about 60% less than what you would pay in monthly repayments had you taken a traditional auto loan.
Other benefits include easier qualification for the lease compared to new car leases, lower registration fees, lower insurance rates and a wider variety of vehicles to choose from.
Drawbacks of leasing a used car
The main disadvantage of leasing a used car is that you never get to enjoy a sleek, new car. Used cars for lease are usually 2 to 3 year old cars which still have a valid warranty. Secondly and more importantly, you never get to own the car.
At the end of the lease period you are required to return the car to the dealer in good condition. Some dealers offer good deals to previous leasers but this is a separate agreement. It is not part of the lease agreement.
Conclusion
After test driving your 3 finalists, take time to analyze your findings. If you are still undecided, go back to the automotive websites and pull in one or a few candidates then proceed with the steps detailed earlier.
If your decision is an obvious one, you can begin the negotiation and deal making process. If it’s not obvious, take time to consider other cars. Now that you know how to choose a car, it shouldn’t take you long to identify another 3 cars to test drive and eventually make a decision.
FAQ
What is the best time of the year to buy a car?
According to most car dealers the best time is in the months of October, November, December. The reason for this is this time most of the car dealerships are having their sales quotas.
If you are doing your purchase within the week do it in the beginning of the week. Days like Mondays, Tuesdays, and Wednesdays are best because there is less traffic. Most persons are waiting for the weekend to make their car purchases.
What happens to new cars that remain unsold?
When a car leaves the manufacturer it becomes the property of the car dealer. This entity is responsible for selling the car and making a profit out of it.
The new cars will remain with the dealership until they are all sold. The manufacturer will at times give cash incentives to the dealer to help them make profits but it is up to the dealer to do thorough research to ensure they get the best car models and the cars all get sol.
