How Does Buying A Used Car From A Dealer Work PORTABLE
Summer 2021 update: The COVID-19 pandemic has affected vehicle production worldwide and brought factory closures, limited staffing and a global shortage in semiconductor chips that are essential components in a modern vehicle. As a result, fewer new vehicles are available on dealer lots. And the combination of fewer new cars and more people looking for lower-priced vehicles has increased the demand for used cars and subsequently driven up prices.
how does buying a used car from a dealer work
If you're planning to buy a vehicle that is less than 5 years old, consider one that's certified pre-owned (CPO). CPO vehicles have long-term warranties that are backed by the carmaker, not just the dealership selling it to you. Franchised dealerships that sell that same brand new are the only ones that can sell a CPO car of the same brand. So if you want a CPO Chevy Equinox, for example, you'll need to buy it from a Chevy dealer.
Prices are driven in part by where you're shopping. You'll find used cars in used car sections of new car dealerships, independent used car lots, used car retailers such as CarMax, and websites where private-party sellers list their cars. Of the four, private-party cars will typically have the lowest selling price. CPO cars will usually cost the most, but for the reasons we've noted. To see what other people are paying for the models you've picked out, take a look at the Edmunds Suggested Price, found on each vehicle's inventory page.
One easy place to start building your target list is the Edmunds used car inventory page. To find exactly the car you want, you can filter your search by many factors, including the miles on the car's odometer, its price and features, and the dealer's distance from you. Most other websites will have similar methods to find the vehicle nearest you.
Unless you're buying the car from a close friend or family member who can vouch for its history, plan to get a vehicle history report. This early step is essential. If the car you're looking at has a bad history report, the sooner you know the better.
Once you find a good prospective car, don't run out to see it. Call the seller first. This step is an excellent way to establish a relationship with the seller and verify the information about the car. You can ask private-party sellers why they're parting with a car or whether it has any mechanical problems. And if you're buying from a dealer, a phone call or text is the best way to ensure the car is still in stock.
If you are buying a car from an individual owner, make sure the seller properly transfers the title and registration to you. It's important to close the deal correctly to avoid after-sale hassles. Before money changes hands, ask for the title (which is sometimes called the pink slip) and have the seller sign it over to you. Rules governing vehicle registration and licensing vary from state to state. If possible, check with your local department of motor vehicles to make sure there are no past-due registration fees you'd be responsible for should you buy the car. Whether you buy from a dealer or a private party, make sure you have insurance for the car before you drive it away.
With our used car rankings, shoppers can compare pre-owned vehicles by their overall scores and individual factors car buyers tell us are critical to their buying decisions. These factors include predicted reliability, safety, performance, and interior comfort and features.
Not sure if you want to take the leap into a used car with no warranty coverage? There is a used car option that does have factory warranty coverage. Manufacturer-certified pre-owned cars (CPO cars) offer a blend of used-car affordability with manufacturer-backed warranty coverage. They're usually low-mileage cars that are just a few years old, with service records and no history of accidents. They are often cars returned at the end of leases, dealership service loaner vehicles, or vehicles driven by dealer or automaker staff.
If you're sitting on a pile of money and plan to pay cash, you can skip this section. If, however, you're like most used car buyers, you'll need a loan to help pay for your used vehicle. It's true that you can have the dealership's finance office arrange your financing. Still, if you want to save money, you need to get a pre-approved financing offer before you get anywhere near a car dealer. A dealer may be able to beat your pre-approved loan, but if you don't have one, they'll have no incentive to do so.
If you're buying from a private party, you have no choice but to find your own financing. The process can be different for private-party buyers, so be sure to talk to your lender about what they'll need to move your loan application forward.
You might think you have to go to a brick-and-mortar bank branch to get a car loan, but there are many places you can finance a used car. Some work better with different types of borrowers than others, so you should talk to several before you decide which financing deal is best for you. Some lenders have programs that provide lower rates or other benefits to existing customers, while others cater to borrowers with damaged credit. You can save money and hassle by taking advantage of these programs.
Community banks offer many of the same auto-lending services as large banks, but they do so with a smaller geographic footprint, fewer branches, and often a more personal touch. Like credit unions, community banks are great places for borrowers who need a bit more help to finance their used car purchase successfully. With their roots in the communities they serve, many will be able to offer tips about other businesses in the area that can help you through the car-buying process.
Just as smart buyers should talk to multiple car dealerships and other sellers before buying a used car, you should apply at multiple lenders to find the best financing deal. It's critical to do so during a short span of time, so the credit reporting agencies don't think you're taking out multiple loans and ding your credit score over and over. Do your shopping over a week or so, and they'll just see it as one transaction. That's important, because each transaction that pulls a credit report lowers your credit score by a few points.
Just as there are many places to get used car financing, there are various places where you can purchase a used car. Each has its strengths and weaknesses in terms of service, ease, and price. Like the car you want to buy, you should strive to learn as much as you can about the dealership or private seller trying to sell it to you. Checking the company out with your local Better Business Bureau or consumer protection agency is an easy way to find out about their track record. You don't just want to look at the number of complaints, but how they responded to correct the problems.
Most new car franchises have adopted strict COVID-19 protocols, mandated by their manufacturers, to protect both customers and dealership staff. Some have robust online buying processes and home delivery options.
When it comes to used car dealerships, national or regional used car superstores are the new kids on the block. They offer many of the same advantages of franchised new car dealerships, such as expertise in handling paperwork, step-by-step buying processes, and access to an array of lenders. Many sell their own line of add-on products, such as extended warranties valid at any of their locations.
They also have access to a vast selection of used cars. With most dealerships, you're limited to the pre-owned vehicles they have on their lots. That's not the case with used car superstores such as CarMax, which can draw on inventories from across the country and bring those vehicles to your local outlet.
Independent used car dealerships are typically small, locally owned businesses. They buy and sell used vehicles, arrange financing, and take care of the purchase paperwork. Their inventory typically comes from wholesale auto auctions. Most don't have service departments and have less total overhead than a typical new car dealer.
Because of their reputation for taking advantage of the most vulnerable buyers, most consumer advocates advise against buying a car or financing at a buy here, pay here dealer. If your credit is so poor that this type of dealer is your only option, you should not be buying a car. Doing so only invites further financial troubles.
When you buy a car from a person or business that's not in the business of selling cars is known as a private-party purchase. It can be the cheapest way to buy a used car because you don't have to pay for a dealership's overhead or profit. A private-party sale generally provides the seller with the best return, and the buyer with a lower price than they would find at a dealership.
Maintenance and Service History: A car that a seller can show was properly maintained is worth more than one without any service records. You can get a sense of its maintenance history with the information included in a vehicle history report. You'll also want to get copies of the vehicle's service history from the seller, and have the mechanic who does your pre-purchase inspection assess the quality of the work.
Sales Information: The sales information section of a vehicle history report will show when the vehicle first entered service and how many times its ownership has been transferred. Watch for vehicles that have been moved repeatedly from state to state, or from an area that has recently endured floods, fires, hurricanes, or other natural disasters. Not only is moving a car one way to mask title issues, but it can also be used to hide flood damage.
When the time comes to start looking at used cars in person, your first impression of both the vehicle and the seller should tell you if you should move the process forward or walk away. If you're looking at a car from a private seller, it's a good idea to treat it like a blind date and meet somewhere public away from your home and theirs. You want to look at cars in the daylight, as the dim light of evenings can prevent you from spotting damage. 041b061a72