Tips for Credit Challenged Used Car Buyersby Steve Cypher on Monday, December 24th, 2012
At Auto Credit Express we’ve spent more than twenty years helping consumers with credit problems find dealers for their best opportunities at approved car loans. During that time, we’ve tried to pass on our experience and help them through the process of what is typically their first – and we hope only – experience with high-risk car loans.
One thing we like to point out is despite the fact that they’re less expensive, buying a used car is really no longer just for those people who cannot afford or are unable to qualify for new car financing.
Buying used cars
There are a number of reasons why financing a used car instead of a new car makes more sense:
• Depreciation – New cars depreciate a lot. Buying a two or three year old vehicle can save buyers anywhere from 20% to 35% off the price of a comparable new one.
• Warranties – New cars typically come with transferable warranties. Buying a used car that’s still covered by its new car warranty can often save buyers money on an extended service contract if it’s purchased from a franchised new car dealer.
• Certified Used Cars – Most manufacturers now offer certified used cars which, while more expensive, come with extended service contracts that offer fairly comprehensive coverage and can be worth the cost difference.
• Quality – Today’s used cars are some of the most reliable in history.
Tips for used car buyers
Knowing that, here are some tips on what to look for:
Pricing. Prices on most used cars have leveled off and even dropped recently from historically high prices. Visit third-party pricing sites to get retail book values and use their shopping tools to adjust those values based on their condition.
Consider certified pre-owned (CPO). Certified used cars are the closest thing to new at higher used car prices. Most manufacturer programs, such as Honda, GM and Toyota include a Vehicle History Report (from AutoCheck or Carfax) and thorough mechanical inspection.
Check out online car sites. Sites like AutoTrader.com and Cars.com let you compare vehicles to give you a better idea of what a fair selling price might be.
Check out the paperwork. Review as much documentation as possible including title documents and service records and receipts.
The devil is in the details, so check for:
Open recalls. According to Carfax, estimates are that 30% of all recalled cars go unfixed. Franchised new car dealers for that brand will fix any open recalls for free.
Odometer issues. Digital odometer tampering is often difficult to detect. Be sure the interior and exterior wear and tear correspond to what the odometer displays.
Flood damage. Check for any odors, corrosion, mud and dirt – especially in those hard to clean areas. Also be sure all warning lights and electrical components are working properly.
Curbstoners. These are illegal dealers that pose as private sellers and sell cars on the internet, along roadsides and through classified ads. These vehicles often have hidden problems and the sellers typically disappear after the sale.
Professional inspection. Not something to look for but what you should have done by both a certified master mechanic and a body and frame specialist prior to signing any sale documents.
Check us out
Another tip worth considering: if you’re someone with bad credit, Auto Credit Express specializes in helping these consumers find new car dealers for their best chance at car loan approvals.
So if you’re serious about getting your car credit back on track, you can begin now by filling out our online car loans application.