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By: Sarah E. Sanuth, an owner of a used car dealership with a plethora of automotive experience, is guest contributing an article sharing her insider’s perspective on car financing.

When many of us purchase a used vehicle, we look for financing. However, we don’t always consider all our options and sometimes just go the quick and easy route, even if it means costing more money. But looking for the best financing doesn’t have to be difficult.

First and foremost, know your credit score. Most lenders look at just your scores, rather than your credit report as a whole. If you don’t know your scores, spend the few dollars and obtain them.

Starting your financing search prior to purchasing a vehicle will give you plenty of time to research and compare, and prevent you from making a hasty decision.

Perform an internet search for “car financing.” This will bring you to more than enough lenders to complete the search, but don’t forget your local banks and credit unions. Check and compare all interest rates; a site like Bankrate.com has helpful comparison information. Choose at least the best two lenders from each type of lending institution. Once you have all the rates and terms, compare them side by side.

Other than interest rate, there are other key items to consider, some of which will affect the interest rate you are going to receive.

Term

Typically, the longer the term the higher the interest rate, this will also affect your monthly payment. Before getting set on a certain interest rate or term, make sure you can afford the payments.

0% Financing or Rebates

Don’t get your heart set on getting that 0% interest rate. To qualify, you usually need a credit score of at least 680 and have to take the shorter financing term, which increases your monthly payment. If you take the rebate over the 0% interest rate, it decreases the amount you are financing. This in turn, could lower your monthly payment and decreases the overall cost of the vehicle. Edmunds.com offers a calculator to help you determine whether the lower interest or the rebate is best for you.

Down Payment

The amount in which you put down on the car purchase can affect the term, interest rate and monthly payment. Make sure that your down payment will adequately benefit your financing needs.

Extended Warrantees, Rust Protection, Undercoating, etc.

When you include any of these extras, it is rolled into the overall amount you are financing. You don’t have to purchase these items through the dealer, shop around and read the fine print. If you want to include these items, try to negotiate as they are often marked up. Otherwise, almost anyone can apply these items to their vehicle for a fraction of the price.

Before you Sign

Make sure that all the terms that you worked out are written in black and white and there is no deviation from what was discussed. Take the time to read every part to make sure nothing was slipped in. If something isn’t right, don’t sign until it is.

A lenders website will usually list all the terms and conditions of obtaining a loan. Make sure you read all the fine print before proceeding. Above all else, make sure you compare all the terms and conditions of a loan to ensure that it is something you can afford, and live with.

By: Sarah E. Sanuth, an owner of a used car dealership with a plethora of automotive experience, is guest contributing an article sharing her insider’s perspective on top mistakes to avoid in buying a used car.

When it comes to purchasing a vehicle, there are lots of things that need to be looked at, considered and talked about. Whether you get flustered or completely excited during the process, there is always room to make mistakes.

After personally selling more than 3,000 used vehicles, I have seen many mistakes. But when you make your money selling vehicles, you aren’t too keen on killing the sale by telling the consumer they are making a mistake.

The following is a list of the common mistakes I have seen made by many consumers when purchasing a used vehicle. Adhere to these and you will help to ensure that your next used vehicle purchase is one that doesn’t bring you down the path to a bad decision.

Fixing your old vehicle:

The biggest mistake many consumers make when purchasing a vehicle, is purchasing one for no reason. A good number of people don’t want to deal with the issues that their current vehicle is having, so instead of fixing it, they replace it. Of course, if you have a vehicle in which you have already had the transmission replaced a few times, it’s time to get rid of it. But if you are dealing with issues such as brakes, exhaust, or a cracked windshield; it is in your best interest to have these issues fixed.

Needs versus Wants:

There are features of the car that you need and there are those that are nice to have. Dual heating zones, navigation, Bluetooth, or buying something because everyone else has it equal spending more money than necessary. Before heading out shopping for a vehicle, always make a list of needs and wants, keeping the two separate. That will help ensure that you make the most practical car purchase, without overspending.

SUV’s, sports cars and vehicle with a lot of electrical components cost more to maintain. Unless you need one of these types of vehicles, don’t buy one.

Trading in your old vehicle:

When you trade in your vehicle, you never get what the vehicle is worth. Car dealers want your old vehicle for nothing, and will only show you money on paper. Always try to sell your vehicle through a private party sale before offering it on trade. A private sale can yield you thousands more than trading it in.

Listening to what people say:

When someone knows you are searching for a vehicle, they might offer you some advice and tell you to stay away from a certain make or model. Listen, don’t ignore it. This doesn’t mean that you have to swear off this vehicle completely, but means you need to dig in further and make a proper assessment, especially if the advice is from a mechanic. It is true, certain vehicles have constant transmission or motor problems, and there is nothing that you can do about it. If you don’t listen you may end up with a huge repair bill, a vehicle that doesn’t run, and a car payment to top it all off.

Having an independent mechanic look over the vehicle:

No one purchases a vehicle without taking it for a test drive, why purchase it without having a mechanic who has no personal interest in making the sale look it over for you. For a small fee, most any mechanic should be able to let you know anything that might be wrong with it. This could end up saving you a lot of money and headaches.

Sleeping on it:

Just because you are out looking for a car today, doesn’t mean you have to buy it today. Waiting at least one day to think over a potential purchase could help you from making a mistake you might regret. Taking yourself out of the situation will help you make a clear and informed decision without all the hassle of what is going on at a dealership.

Showing emotions:

Never let the salesmen know that you “love” or “want” a certain vehicle. If you can help it, try looking over the dealerships inventory without a salesman at your side. Simply tell him or her that you will come find them when you find something you are interested in. When it comes time to talk with the salesman, never hint that you “love” this or that vehicle. The salesman will try to play on any emotions that you might be displaying to coerce you into making the purchase “now” and possibly for the wrong price.

Car shopping alone:

Two sets of eyes are better than one. Always try to bring at least one person with you. Try to give the impression that the vehicle you choose is a joint decision, regardless of whether it is or not. The person you bring with you doesn’t have to have any mechanical experience, just someone who is another set of eyes and ears, to see and hear what you might not.

Secure financing before looking for a vehicle:

Car dealerships don’t just make their money selling vehicles; they make money on financing, too. Take the time to secure your financing before you look for a vehicle. Whether it is through your bank, credit union or other facility, this will give you a clear answer as to what amount you can really afford, cut out all the bull when you decide on a vehicle, and give you a better interest rate.

Researching:

With the wealth of information available on the internet today, there is no excuse for making an uninformed decision. Whether it is before or after you have started looking for a vehicles, always research every aspect of a potential vehicle purchase. For pricing information always check KBB.com, Edmunds.com or NADA.com. These sites will give you an idea of the book value for a specific vehicle.

But go a little further than that. Check out car classifieds sites to get an idea of what the vehicles are actually selling for. Doing a simple Google search on the make and model of a vehicle you are interested in can bring you to information about potential problems that the specific make and model might be known for.

Used car shopping can be a tricky and complicated process, but it doesn’t have to be. Before you sign on the dotted line, take the time to follow these simple steps; doing so will help ensure that you save money, headache and above all else, regrets.

Most Expensive:

Imagine you’re driving to work in your brand new red sports car. You’re weaving
in and out of lanes and laughing at the people you pass driving to work in their over-
sized, gas-guzzling SUVs.

Well, while laughing, think about this: although SUVs do spend more money on gas,
you’re probably spending much more on your auto insurance premium. According to the
Insurance Institute for Highway Safety, faster cars get into more accidents—particularly
when the person behind the wheel is a young and inexperienced driver.

As a whole, smaller cars (which, in turn, tend to be faster as well) are more attractive to
young car buyers, mainly due to the fact that these cars are likely less expensive when
compared to larger vehicles. However, younger drivers also seem to be a bit riskier on
the road, and use the small size of their vehicle to burn through traffic.

The Subaru Impreza WRX, the Mitsubishi Lancer, the Acura RSX, and the Nissan Sentra
SE-R are the vehicles with the highest collision rates, mainly because the drivers of these
cars tend to be younger, and the way they drive causes more accidents.

However, don’t expect every car on the list of ‘Most Expensive Cars to Insure’ to be
small, sporty vehicles. The #1 most expensive car to insure is the Cadillac Escalade EXT
4WD. If you’re wondering why this would top the list when every other car is small,
sporty, and relatively affordable, the answer is simple: theft appeal.

The Cadillac Escalade is one of the most popular and most recognized car in its class. It
represents wealth, class, and style. Not only is this car looked favorably upon by older
generations, but also this is one of the hottest and most desired cars amongst the younger
generation. In addition, everything in an Escalade can be placed and attached into a
Suburban, making this car hot not only to all generations, but hot for thieves as well.
According to Bankrate.com, due to its desirability, Cadillac Escalade owners deal with a
comprehensive premium of six times the national average.

Least Expensive:

Fortunately, for those starting a family or thinking of starting a family, the cars
likely to have the lowest insurance costs are large sedans, mid-sized SUVs, or minivans;
namely vehicles ideal when traveling in packs.

The reason is simple; perhaps it’s because children are quite often in these vehicles, but
generally those driving family-car-like vehicles are less likely to be driving recklessly.
Additionally, one is less likely to use such vehicles as transportation to and from work,
therefore lowering the chances that it will be on the road during rush hour, a time when
the likelihood of accidents increase.

Other reasons these vehicles make the list of ‘Least Expensive Cars to Insure’ is because
many times these vehicles are kept in a private driveway or garage. Doing this lowers the
chances of theft, not to mention that these cars are deemed less desirable to thieves.

Still remember, however, that this list does not mean that the larger a vehicle is, the lower
the insurance costs will be. There are many vehicles that are so large that they cause
more damage on average to other cars when in an accident. For example, all models of
the Hummer are associated with causing higher damages in accidents, and because of
this, the auto insurance premiums tend to be more expensive.

10 Most Expensive Cars to Insure
1. Cadillac Escalade EXT 4WD
2. Subaru Impreza WRX 4WD
3. Hyundai Tiburon
4. Mitsubishi Lancer
5. Scion tC
6. Acura RSX
7. Nissan Sentra SE-R
8. Suzuki Forenza
9. Nissan Sentra/Mitsubishi Eclipse
10. Chevrolet Cobalt two-door

10 Least Expensive Cars to Insure
1. Ford Five Hundred 4WD (now the Ford Taurus)
2. Buick Rendezvous 4WD
3. Buick Lucerne/Buick Rainer 4WD/Honda Odyssey
4. Ford Freestyle 4WD/Suburu Outback 4WD
5. Buick Rendezvous/Honda Pilot
6. Chrysler Town & Country LWB
7. Honda Pilot 4WD
8. Buick LaCrosse/Chevrolet Uplander/Ford Escape/Volvo V70
9. Dodge Grand Caravan/Ford Freestyle 4WD
10. Ford Explorer 4WD/GMC Sierra 1500 4WD/Toyota Highlander/Toyota Sienna.

In addition to comfort, resale value and gas mileage, it is important to find out exactly
how much that leased or purchased car is going to cost to insure. You may be in for a
rude awakening if that “perfect” car has insurance costs that make your eyebrows jump
off your head!

For more information or to obtain an insurance quote for your next car, go to InsuranceQuotes.com.

Toyota Prius and hybrid versions of Chevrolet Malibu, Chevrolet Tahoe,
Ford Escape, Saturn Vue, and Toyota Camry pay back price premium after one
year

YONKERS, N.Y., Sept. 2 /PRNewswire-USNewswire/ — With gas prices
soaring, Consumer Reports’ latest analysis of owner costs shows that
drivers can save anywhere from $500 to $4,250 over a five year ownership
period by choosing selected hybrids rather than similar conventional
gasoline-powered vehicles.

Six of the 12 hybrids CR experts looked at — Toyota Prius and hybrid
versions of the Chevrolet Malibu, Chevrolet Tahoe, Ford Escape, Saturn Vue,
and Toyota Camry — can save consumers about $500 to $4,250 even without
tax credits, and pay back their price premium after only one year. For
several of these hybrids, owners can save even more by taking advantage of
federal tax credits.

CR experts compared the five-year owner costs of 12 hybrids with those
of similar conventional vehicles using Consumer Reports’ new-car owner-cost
estimates, introduced in the April 2008 issue.

The Toyota Camry hybrid, which gets 34 mpg overall in CR’s tests, saves
the most money, about $4,250 over five years compared with a similarly
equipped four-cylinder Toyota Camry XLE, which gets 24 mpg.

The Saturn Vue Greenline Hybrid can save about $3,000, while the Toyota
Prius and Chevrolet Tahoe save $2,000 and $1,500 respectively, when
compared to their non-hybrid counterparts. With tax credits, the Vue and
Tahoe come out ahead by about $4,500 and $3,700. Federal tax incentives are
no longer available for Toyota and Lexus hybrids.

The report, “Which Hybrids save you money” is available in the
redesigned October issue of Consumer Reports, on sale September 2 on
newsstands and online at http://www.ConsumerReports.org.

The October issue of CR also features an analysis of how drivers can
save gas and money by opting for a car with a stick shift. In recent tests,
Consumer Reports found that cars with a manual transmission can improve gas
mileage by a notable 2 to 5 mpg, compared with an automatic transmission,
and can cut a car’s price by $800 to $1,200.

It would take many years for most hybrids to pay back their premium
price just on fuel savings alone. But fuel costs are a relatively small
part — 25 percent — of the overall owner costs in the first five years.
Other factors include depreciation, insurance, interest on financing,
maintenance and repairs, and sales tax.

Cost estimates were based on driving 12,000 miles per year and paying
$4 per gallon for regular gasoline and $4.20 for premium.

“Most of the hybrids tested by CR have done really well, but hybrids
have higher initial upfront costs,” said Rik Paul, automotive editor,
Consumer Reports. “If you can afford that initial cost, you can be better
off buying one, and driving one might make you feel greener.”

The Honda Civic, Nissan Altima, and Saturn Aura hybrids will cost
drivers a little more than their conventional counterparts — from $250 to
$750 over five years — but some consumers might find it worthwhile to
drive a more environmentally friendly car. With federal tax incentives, all
three come out ahead after just one year.

Three hybrids — the Lexus GS 450h and RX 400h and the Toyota
Highlander Hybrid — cost more than their counterparts in the first five
years. They show five year losses ranging from about $1,250 for the
Highlander to $5,500 for the GS.

Hybrids vs. Conventional Cars

Interest in hybrids has been on a parallel trajectory with gas prices.
Hybrid sales jumped almost 40 percent last year. According to a recent
Consumer Reports survey, 32 percent of active car shoppers are considering
a hybrid for their next vehicle. And this past summer, automakers had a
difficult time keeping up with demand for the most popular models.

In addition to being thrifty with fuel, hybrids emit less pollution,
with some models classified as Partial Zero Emission Vehicles by the
California Air Resources Board. They also release fewer greenhouse gases
because each gallon of gasoline not burned prevents the emission of 19
pounds of carbon dioxide.

The Bottom Line

With higher gas prices, many hybrids now provide a definite benefit in
overall owner cost, despite an initial price premium. Still, if saving
money right out of the gate is important, some conventional cars provide
good fuel economy and cost less than hybrids. Consumer Reports advises
people to decide what type of vehicle is right for them and then to choose
one that gets good gas mileage for its class and rates highly in CR’s road
tests and reliability, safety and ownership-cost ratings.

OCTOBER 2008

(C) Consumers Union 2008. The material above is intended for legitimate
news entities only; it may not be used for commercial or promotional
purposes. Consumer Reports(R) is published by Consumers Union, an expert,
independent nonprofit organization whose mission is to work for a fair,
just, and safe marketplace for all consumers and to empower consumers to
protect themselves. To achieve this mission, we test, inform, and protect.
To maintain our independence and impartiality, CU accepts no outside
advertising, no free test samples, and has no agenda other than the
interests of consumers. CU supports itself through the sale of our
information products and services, individual contributions, and a few
noncommercial grants.

SOURCE Consumer Reports

This is common question amongst used car buyers.  That was certainly one of my main questions when I first started looking for a used car.  In my experience, I tend to look for cars that are 3-4 years old and less than 30-35K miles and that has worked well for me but that of course depends on your needs.  If you’re like my friend who is remodeling his home and is looking for a used car that can just help him haul materials, price is his main concern and not necessarily the mileage as long as the car can serve a temporary purpose of getting him from point A to B.

For people with normal driving needs, according to Tom and Ray Magliozzi (hosts of NPR’s CarTalk) in their book on “How to Buy a Great Used Car,” they advise buying a 2-3 year old car with 20-40K miles.  They think that would be the best bet for “people who want to drive a car that looks good, runs well, has up-to-date safety equipment and is very reliable.”

Of course, a lot of the reliability of the car also depends on the manufacturer.  We would suggest also consulting Consumer Reports list of Best and Worst used cars  – .

Buying a three-year-old Toyota Camry can save $13,000 over a five year
period

YONKERS, N.Y., Sept. 2 /PRNewswire-USNewswire/ — A new Consumer
Reports study of owner costs shows that choosing a reliable three-year-old
car instead of a new one can save drivers thousands of dollars over the
first five years. In many cases, that’s enough to pay for all the gas used
during that time.

With relatively low mileage, modern safety and convenience features,
and usually a much lower price than similar new vehicles, late-model used
cars are in the sweet spot of auto deals.

On average, CR’s findings show that consumers can save 32 percent in
the first five years by buying a three-year-old car. Similarly, with a one
or two-year-old car, they can save 19 and 27 percent, respectively.

According to the analysis, buying a 2005 Toyota Camry with a V6 engine,
for example could save consumers about $13,000 over five years compared
with buying a new 2008 version. At $4 per gallon, the driver could pay for
all of his or her gas during that period (based on driving 12,000 miles per
year) and still be almost $2,500 ahead.

Similarly, driving a 2005 Ford Focus can save more than $8,000 over the
first five years, compared with buying the new Focus. And with demand for
big SUVs plummeting and their used-car values dropping, drivers could save
$25,500 over five years by buying a three-year-old Chevrolet Tahoe instead
of a new one.

CR’s five year owner costs are based on: Depreciation — Calculated by
using CR’s Auto Price Service. Fuel costs — $4 a gallon for regular gas
and $4.20 for premium, based on driving 12,000 miles annually and CR’s
overall fuel economy for the vehicle. Insurance — The cost of insuring an
average driver based on data from the Insurance Institute for Highway
Safety. Interest — CR assumed buyers purchased cars with a 15 percent
down on a five-year loan; http://www.Bankrate.com was the source for the
average interest rate. Maintenance and repairs — Data was taken from CR’s
2007 Annual Auto Reliability Survey. Sales tax — Calculated using the
national average at the time of purchase.

“A reliable late-model used car can be one of the best values out there
when buying a car,” said Rik Paul, automotive editor, Consumer Reports.
“Savvy shoppers can also get a more upscale model with more features for
the same owner cost as a less expensive new car.”

The full report is available in the redesigned October issue of
Consumer Reports, on sale September 2 on newsstands and online at
http://www.ConsumerReports.org.

Why used cars are good values

The real key to used-car savings is depreciation, or how much value a
car loses over time. On average, depreciation accounts for a whopping 45
percent of a new vehicle’s owner costs over the first five years, with the
steepest drop in value coming in the first year.

By contrast, a three-year-old vehicle has already taken its biggest hit
in resale value. Its depreciation accounts for only about 25 percent of its
five-year owner costs. Big depreciation for new cars means lower prices for
used cars, which in turn mean lower finance charges and sales tax. When
combined, that can cut owner cost dramatically.

However, CR found that some popular models such as the Mini Cooper and
Toyota Prius don’t depreciate much. So buying a used version of those
models results in modest savings.

Many people shy away from buying a used car because they’re afraid of
buying someone else’s problems. Yet CR’s reliability data show that cars,
overall, are much more reliable than they used to be. Rust and
exhaust-system problems, once common in older cars, are no longer of major
concern. And reliable late-model vehicles usually have few problems
overall. That said, if a car hasn’t been well-maintained, reliability and
value are wild cards.

To check reliability predictions, visit http://www.ConsumerReports.org/cars.

Bottom Line

While most used cars on the market are five years or older, it’s worth
looking for late-model used vehicles that are three years old or less.
Drivers can often find a late-model used car with many of the latest safety
features, such as electronic stability control and side and curtain air
bags. It’s even possible to find one with a transferable factory warranty.

OCTOBER 2008

(C) Consumers Union 2008. The material above is intended for legitimate
news entities only; it may not be used for commercial or promotional
purposes. Consumer Reports(R) is published by Consumers Union, an expert,
independent nonprofit organization whose mission is to work for a fair,
just, and safe marketplace for all consumers and to empower consumers to
protect themselves. To achieve this mission, we test, inform, and protect.
To maintain our independence and impartiality, CU accepts no outside
advertising, no free test samples, and has no agenda other than the
interests of consumers. CU supports itself through the sale of our
information products and services, individual contributions, and a few
noncommercial grants.

SOURCE Consumer Reports

In the aftermath of a series of hurricanes, the Better Business Bureau in Texas (in their Press Release yesterday) provides the following tips to avoid buying a flood-damaged car.

In the wake of a major disaster in your area, the Better Business Bureau urges new and used car buyers to be cautious of unscrupulous businesses and individuals who may try to sell flood-damaged cars without revealing the vehicles’ history.

The BBB recommends the following tips to help consumers determine if a car is flood-damaged:

Ask to see the title of a used car. Check the date and place of transfer to see if the car came from a flood-damaged state and if the title is stamped “salvage.”

Check all gauges on the dashboard to make sure they are accurate, and to look for signs of water.

Test the lights, windshield wipers, turn signals, cigarette lighter, radio, heater and air conditioner several times to make sure they work. Also, flex some wires under the dash to see if they bend or crack, since wet wires become brittle upon drying and can crack or fail at any time.

Check the trunk, glove compartment, and beneath the seats and dash for signs of mud, rust or water damage.

Look for discolored, faded or stained upholstery and carpeting. Carpeting that has been replaced may fit too loosely or may not match the interior color.

Check for a well-defined line, or watermark, and for musty odors resulting from mildew.

Check out the reliability of the dealer by contacting the Better Business Bureau where the company is located.

If the car’s history seems suspicious, ask the dealer or individual directly if the car has been damaged by flood water.

Before buying any used car, always get a pre-purchase inspection by a trusted mechanic. The extra cost may save you money in the long run.

When you are in the market for a used car purchase, there are a number of factors to consider. Your finances, your personal taste, and your experience with vehicles all play a role in determining where you should turn. This is especially true if one of these categories presents a challenge (such as having a limited amount of funds or knowing virtually nothing about used cars). While there is no single, ideal way to buy a used car, there are pros and cons to help you weigh in on where to purchase your next used car — buying from a New Car Dealership, Used Car Dealership or from a private party or private sellers.

Pros and Cons of Buying from a Dealership

Buying a used car from a dealership is one of the most popular choices for consumers today.  Some people consider it a “safe” alternative to buying from a stranger. However, as with most sales venues, there are two sides to this option.

There are 2 types of dealerships.  One type is New Car Dealerships (also known as Franchise Dealerships that work with a specific auto manufacturer) which sell new cars but also carry used cars from trade-ins.  The other type is Used Car Dealerships which only sell used cars; they procure used cars primarily from car auctions.

Pros and Cons of Buying from a New Car Dealership

Pros:

• New car dealers typically offer Certified Used Cars which specifies that their used cars have been looked over by a qualified mechanic and have not been in any undisclosed accident.   Oftentimes, the sale of a Certified Used Car comes with some sort of mileage or length of time warranty.  Many dealers will also throw in a free year’s worth (or even life-of-the-car’s worth) of car washes or oil changes.
• New car dealerships generally have a large selection of vehicles to choose from providing a better chance to find the specific make, model, color and options you want.
• Additionally, the cars at a new car dealership are probably of better quality that are newer, later model cars with low mileage.  Most of the time, these cars are the trade-ins and previously leased vehicles that are in better condition than those sold off at auctions.  They are also more likely to carry the manufacturer’s original warranty.
• The service may be better at new car dealers since there are certain customer satisfaction standards they need to meet from auto manufacturers.

Cons

• Cost is also a pretty big factor in buying used cars from a dealership. Although not every vehicle will be grossly overpriced, you will almost always pay more for a vehicle from a dealer than you would with a private seller. After all, you’re paying for business overhead, salaries, and the owner’s profits.
• Car dealerships don’t necessarily have a great reputation for treating customers fairly.  It is probably also a case of a few rotten apples spoiling the good ones.  Part of the problem is that because most car salesmen work on commission, it is in their best interest to get you to drive home with any car – no matter what while pocketing as big a profit as they can.  (CarMax, one of the largest car dealers, is one example of a dealership offering no haggle pricing where the sales people are compensated based on volume rather than profit).  Car dealerships can also be intimidating, especially if you don’t know too much about cars.
• This is not to say there aren’t reputable dealers out there.  Just make sure to get suggestions from your friends and colleagues.  Check with the Better Business Bureau (BBB.org) to see if a certain car dealership has had prior complaints and how those complaints were handled.

Pros and Cons of Buying from a Used Car Dealership

Used car dealerships are often times small businesses and mom and pop operations.  They are also called independent dealerships (presumably independent from an auto manufacturer unlike a Franchise dealers) and there are many more of these dealerships than there are new car dealerships.   Used car dealerships typically get their cars from auctions and less so from trade-ins.

Pros:

• The prices at used car dealerships are generally lower than a new car dealership partly because they have less overhead.
• There’s also a good number of cars on the lot for you to choose from (CarMax.com is one of the largest used car dealers selling many makes and models)

Cons

• Cars at a used car lot are typically sold with no warranty
• The cars at a used car dealership are also of lower quality and older than those at a new car dealership.
• Used car dealers are not known for their stellar reputation.  There’s tendency to do whatever it takes to sell a car even if some of those sales tactics are questionable.  As with a new car dealer, make sure to check resources like the Better Business Bureau and do searches on Google to see if there are user reviews of the dealer (dealerrater.com which allows users to comment on their experience shopping at particular dealerships, is also a good source to consult).

Pros and Cons of Buying from a Private Party

Pros:

• One of the biggest upsides to buying a used car from a private seller is the price.  Private party sellers typically don’t have any overhead in running a business, they don’t work on commission, and they are often motivated to sell at any price. If you know what you’re looking for as well as the value of the used car you’re considering, you can drive away with a really great deal.
• One way to get a good deal on a car is to buy cars from private sellers who must sell either because they need to move out of town or country or they need the money.
• Buying from a private seller can also get you access to all of the car’s history. This is especially true if the private seller has been the sole owner of the car. He or she will know every accident, every mechanical problem, and even the slight eccentricities of the radio.  Assuming you are negotiating with someone who is trustworthy, this can provide you with an invaluable look at the car’s details.

Cons:

• When private parties sell a used car, truck, or SUV, they often have some level of emotional attachment to the vehicle. They also typically have a frame of reference for the cost they originally paid, and they may feel that they deserve a close (if not equal) payout from you. Both of these can lead to the occasional overpricing of the used vehicle.
• There is also no guarantee that the car you’re getting is in good shape. Unless you have your own mechanic check out the car and give it a thumbs up (or you know enough about cars yourself), you may end up driving home with a lemon – and have no legal recourse to rely on to get your money back.
• Probably takes a bit more time and effort than going to a dealership since one private party or individual may only have one car to sell.

The Bottom Line

Buying a used car can be a time-intensive and complicated process, but it doesn’t have to be overwhelming. As long as you know what to expect from used car dealerships as well as private party sellers, you can make an educated decision that will save you time, money, and future mechanical breakdowns.

For more information on used cars, visit blog.iseecars.com which provides tips, advice, and commentary on searching and buying used cars.  The blog is written by the team at iSeeCars.com, a search engine for used cars for sale, created by people who think buying used cars are better than buying new and who are passionate about building better tools and providing helpful insights and information for users to more easily and smartly search for and buy used cars.