We all know that when you buy a brand new car, it can depreciate as much as 20% as soon as you drive it off the lot. Since we are all concerned about making the best financial decisions, we don't buy new cars...right?? If you are buying a new car, the best thing to do is pay for it in full from your savings and drive it until the wheels fall off. Meanwhile, you should be making "car payments" to yourself so when it is time to purchase another vehicle, you won't need a loan.
If you are in the market to purchase a vehicle and are looking for a safe, reliable used car, be sure you are taking the proper steps to protect yourself.
Research. If you know what models you are interested in or if you need ideas on what your next car should be, start online. Edmunds.com has forums where owners can discuss problems they've had and a warranty and service section where you'll find recall data and technical service bulletins. If the car you are interested in has a history of problems, you may want to try another model. You can also check the complete list of safety recalls at the National Highway Traffic Safety Administration.
Get the History. Just like you will want to know the history of your next potential boyfriend/girlfriend, you'll want to know the history of your vehicle. Get a Carfax report to reveal the complete history of your next vehicle. If you don't want to purchase a vehicle that has been in a previous major accident, had flood damage or some other major problem, you want to get this report. Carfax will give you the estimated mileage, ownership history, title and accident history and the service and repair information reported for that car. If there are no DMV-reported incidents (such as a flood, fire, salvage or manufacturer buyback), the car qualifies for Carfax's Buyback Guarantee. If one of those incidents comes to light after you buy and it wasn't on the report, Carfax will buy the car back from you for up to 110% of the Kelley Blue Book value.
Don't Overpay. After you've done your research on the history of the vehicle, you need to know the fair market value of the car you are considering. Again, the internet can be a great help in determining what the car is worth. Be sure to check vehicle valuation sites like NADA, Kelley Blue Book and Edmunds. Knowing the value of the car you are about to purchase will give you negotiating power with the seller. If the seller knows you've done your research, they will probably be more willing to give you a better deal.
Insurance. You've done all your research on the history and the value of the vehicle and you are ready to make a deal. If you are getting a good price on the vehicle, you don't want to blow all your savings on outrageous insurance costs. Get a free auto insurance quote at Esurance or InsureMe.com to be sure your new (used) car won't break the bank when you insure it.
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