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What Is the Most Economical Way to Finance a Used Car?

What Is the Most Economical Way to Finance a Used Car?

Opting to purchase a used car versus an old one is a wise decision, especially if you’re on a budget. Used cars are substantially cheaper than new vehicles and there are some great deals to be had. Searching for the right used car can take some time, as it’s important to find something that is mechanically sounds and won’t cost you more money down the line. Once you have found a vehicle that meets your requirements and falls within your budget, you will need to secure appropriate financing before you drive away in your new car.

When you start shopping around, you will find there is a huge choice of vehicles to choose from. Choose a convenient little run-around for the perfect city commuter car, or maybe choose something with more power that will cover long distances comfortably. Perhaps a sport utility vehicle is more your style or you have your eye on a sportier model? Whatever you are in the market for, you can be sure that you will find something suitable. However, you’ll get what you paid for, so it’s generally best to finance a used car and give yourself more choice and flexibility to get a vehicle that is reliable and trustworthy.

Continue reading to learn more about the best and cheapest way to finance a used vehicle.

Where To Shop

There are a few different places you can go to find the used car of your dreams. Visiting a licensed dealer is probably one of the safest options because the vehicles often will come with some kind of a warranty. Buyers can also purchase a car through auctions, which require a little more knowledge of cars.

Cars can also be purchased through private sellers. While the cars are typically less expensive than those purchased through a licensed dealer, car buyers have to do a lot more footwork. For one, you have to make sure the seller provides proof of ownership and then you also need to make sure there are no loans, fines, or penalties attached to the vehicle. Buyers should also complete a REVS (Register of Encumbered Vehicles) check to make sure the car has not been stolen.

Getting The Most Value

The whole point of purchasing a used car is to get the best value possible. However, one disadvantage of purchasing a used car is that each vehicle comes with a history. Obvious things to look for when shopping for a vehicle include body marks, dents, and rust. When looking under the hood, keep an eye out for rust and paint overspray, which may indicate that the car has previously been in an accident. Also, be sure to pay attention to any leaks that start after the car has been test-driven.

Unless you have experience with cars, it is very difficult to be positive that you have inspected the vehicle thoroughly and have identified all of the issues. For this reason, prospective buyers who have found a vehicle should consider having the car inspected professionally. A mechanic will be able to find problems in the vehicle that might not be apparent with a visual inspection. Furthermore, this could be a starting point for negotiating a better price if repairs need to be made.

Keep Your Expenses Down

If you are trying to keep your expenses down, there are a number of different things that you can do to minimize your costs. Choosing a car that can be repaired easily and inexpensively is a great place to start, as this will save you both money and hassle in trying to locate parts. Generally speaking, it’s smart to avoid any makes or models that require a lot of maintenance and expense. With European cars, for example, parts can be difficult and expensive to come by. Also, it’s good practice to search online about the make, model and year car you are buying and see if there were any major problems reported that you should be aware of.

Before Making the Purchase

If you choose to finance your new vehicle, make sure you have a budget in mind that includes all of the costs associated with maintaining and running the car. Considerations to keep in mind include insurance, fuel, and maintenance costs. Including these expenses as part of your payment will give you a better idea of your total monthly costs going forward and let you budget accordingly.

More Car for Less

With the right approach, financing a used car can be very affordable. Both savvy car enthusiasts and wary first-time buyers can get a great bargain on a used car and secure financing quickly. Be sure to do your research and have the car inspected by a trusted and reliable mechanic before finalizing the sale. Being thorough will allow you to know that the car is reliable and will not cause major problems in the future. Once you are happy with the car, you can secure the financing you need to purchase your new vehicle and hit the road in confidence.

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by Lottie Pritchard // Lottie Pritchard is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.