By Jessica Jackson
The value of a new car drops 10 per cent the second you drive it out of the showroom – or put another way, you can save at least 10 per cent on the price of a new car by buying it slightly used. One secret every financially responsible person knows is that it’s better to buy a used car than a new car – the actual difference in quality might be negligible, but the difference in price can be as much as 30-50 per cent. With a used car, you save money on depreciation, taxes and insurance, and if you buy a recent model, the only thing missing is that new car smell.
Here are five things that will help you save money when buying a used car:
Buy from Individuals, Not Dealer
We all know the used-car salesman trope. When you buy from a used-car dealer, you’ll pay a premium for service, assured history (though this differs by dealer), and some maintenance perks and benefits. It is far better to approach individuals directly as not only do you get to know and understand the previous owner of the vehicle (and his/her driving habits), but also get a chance to negotiate a more fair price.
Verify the Vehicle’s History
Before buying a car, make sure that you have access to the VIN number. The VIN or Vehicle Identification Number is a unique number assigned to each vehicle. This number is unalterable (unlike a license plate number) and gives a brief account of the car’s history. The VIN will note if the car was in an accident, was written off after a collision, or was damaged in a flood or fire. This is vital information that can save you a lot of money on damaged vehicles or those with a checkered history that you may not be able to resell for much.
Buy a Vehicle with High Resale Value
Maybe you’ve grown tired of your car after three years, maybe the car is not performing as well as you want, or maybe you need different features or room for more children. Whatever the reason, it is always a good idea to buy a used car with a high resale value in case you want to sell it later. Sedans and coupes usually have low resale value, while hatchbacks and minivans like the Toyota HiAce retain their value the most. Cars from American manufacturers such as Ford, GMC, and Chevrolet don’t retain value as well as Japanese cars; Japanese cars, especially hatchbacks and minivans, also have good fuel efficiency.
Buying used cars online is not as far-fetched as it sounds. You can usually get incredible deals on used cars at established marketplaces which have been used and trusted by thousands or millions of people. Although there are certain risks to buying a car online, if you research the seller thoroughly, negotiate well, and use established marketplaces and payment methods, you will save a lot of money shopping for a used car.
Get the Vehicle Checked by a Trusted Mechanic
Last but not least, make sure that you get the vehicle tested thoroughly by a trusted mechanic. Typically, the older the car, the more important it is to get it tested thoroughly. New cars with low mileage (less than 20,000 kilometers) should have no mechanical flaws, except if the car has been in an accident or badly driven. A seasoned mechanic should be able to verify any mechanical damage and tell you the expected life of the vehicle based on its current condition.