How to Become an Educated Car Shopper

August 31st, 2019 by

educated car shopper

Auto City launched The Used Car Blog in July 2016 in order to start a revolution in the used car industry. The goal of our effort is simple: To help anyone become an educated car shopper. Why is this part of our mission? We know many used car dealerships and used car salespeople have created bad reputations by engaging in all kinds of bad practices. Meanwhile, people buying cars privately from their owners have also had all manner of nightmarish experiences.

Our aim is to show people not only that there are good, helpful used car sellers, but to teach them how to go about the used car shopping process knowing what they need to know to avoid mistakes and unethical sellers. This will naturally lead them to the places and people who do it right. Together we’ll put the bad ones out of business and grow support for the good ones. This article will present all the key things you should know if you want to be an educated car shopper.

Become an Educated Car Shopper Before You Begin

educated used car shopping 101

Before you start car shopping, you have to make the most basic decision of all – whether to buy a brand-new car or a used car, and then make sure you know how to be smart when you go shopping.

Buying Used is Smart: New car prices are higher than ever, now averaging a whopping $37,000. That’s enough to scare quite a few people outright into buying a used car. The vast majority of new car purchases are financed, which is another reason why people who understand the effects of depreciation or more likely to opt for buying a used car. Because a new car immediately drops at least 10% of its value when you drive it off the lot, most people are immediate “upside down” or “underwater” on their car loan, meaning they owe more on the loan than the car is worth. And this doesn’t change for a number of years. Total depreciation during the first year of ownership is often at least 20%, and the car continues to lose that much value every year for several more years. When you buy a great used car, you get more bang for your buck because it was the previous owner who took the big hit on depreciation.

Work with a Reputable Dealership: Some people shy away from buying a used car because they fear being taken advantage of on the price of the car, its condition, or both. But that’s the point of becoming an educated car shopper – learning what you need to know about finding great used cars. One of the smartest decisions you can make is finding a used car dealership who takes the right approach – one that focuses on newer used cars with lower mileage and in great condition, that offers a warranty on every car, that has a money-back guarantee, and that has firm up-front competitive prices so you don’t have to worry about haggling. In San Diego Country the dealership that checks off all those boxes is Auto City! We’re out to fix the used car shopping experience for consumers, and we’re crushing it, as you can read in our customer reviews.

Create a Budget: One of the most important things you can do before beginning to shop for your next is to really take a good look at your financial situation and decide what you can realistically afford. Few things are worse than buying a fantastic car and soon afterwards realizing you can’t afford it. To get this right, you need to account not only for the monthly car payment if you finance your purchase, but also insurance, service/repairs, and fuel. Learn the details in Creating Your Used Car Shopping Budget.

Avoid Common Mistakes. Whether it’s you first time or your fifth time buying a used car, a lot of people make one or more common mistakes that could easily be avoided. One of the biggest mistakes already mentioned is not knowing what you can really afford. Another is not having any idea what kind of car you want and/or need. Other people haven’t done any homework ahead of time to know if the price on any given car they’re looking at is a good one – you have to spend some time looking at your local market to see what similar cars are actually selling for in order to know this (and this would be in addition to checking out price guides like Kelley Blue Book and Edmunds TMV). Other common mistakes are not test-driving a car to see if it’s really the right choice, failing to check a vehicle history report (a reputable dealership will provide a copy for free), and not having a trusted mechanic do a thorough inspection of a car before buying it. Finally, a surprising number of people know very little about the financing process to know whether or not the financing contract they sign off on is a good one or not. A car purchase is a big deal, and is often second only to buying a house for many people, so you want to get it right.

For Sale by Owner? You can try to find the used car of your dreams for sale by its owner, but there are some drawbacks to going that route. First, you’re dealing with a complete stranger and you have no idea if they’re being honest with you, whereas a good used car dealership has a reputation with the customers it has served, and you can easily check into that reputation online. And if you do purchase a car from a private seller and decide you’re not happy with it, you have very few ways to do anything about it beyond suing the seller in small claims court, which is huge headache.

Buying Used Cars Online? These days you can, of course, buy your car online. But that also comes with its own set of issues and challenges. It’s almost always better when you can look the seller in the eye and see what kind of person they are. And you should always test-drive a car you’re thinking of buying. Shopping for a brand-new car online is fine because they’re all the same coming out of the factory except for color and trim level. Every single used car, however, is different depending on how its previous owner drove it and cared for it (or not). Feel free to do your “window shopping” for your next car online to get an idea of prices and what’s available, but when it comes down to making an actual purchase, you definitely want to see the car in person and test-drive it before signing on the proverbial dotted line.

Watch Out for Scams: There are also all kinds of ways scammer take advantage of unsuspecting car shoppers, and we’ve written about each of them, including title-washing, VIN cloning, Curbstoning, odometer fraud, and the latest scam around getting people to pay for a car with prepaid gift cards. The easiest thing to do is keep this rule of thumb in mind: If a deal on a used car seems too good to be true, then it is probably exactly that – too good to be true becase it’s a scam. It’s a sad state of affairs when you have to worry about all these different scams, but you can avoid all of them by working with the right used car dealership that has a great reputation for always doing things right.

How an Educated Car Shopper Buys a Great Used Car

used cars

When you’re an educated car shopper, you’ll be able to shop for a used car with confidence anywhere, anytime. After setting yourself up beforehand with all the information and knowledge presented above, now you can get into the details of finding your next ride.

Negotiating Price: If the thought of haggling over the price of a used car makes you nervous, limit your search to reputable dealerships in your area that take the firm up-front price approach. And if you do shop at a place where haggling happens, just remember that you always have the power of walking away if at any time you feel pressured or if it’s not going your way.

Avoiding Branded Titles: A branded title is one where there are known problems with a vehicle, such as a salvage title because of an accident, flood damage, and so on. These cars may seem fine when you’re looking at them, but will inevitably start having serious problems that will cost you more in the long run. There are lots of different kinds of salvage titles, and each state has its own wording for them, so read the title carefully to see what it mentions, such as salvage, junk, rebuilt, reconstructed, non-repairable, lemon, theft recovery, or any specific kinds of damage (flood, hail, fire, etc.).

Checking a Car In-Person: We always recommend not just looking at a car in-person, but also test-driving it, which is the only way to know whether or not it feels right. If you’re checking out a car for sale privately by its owner, find out why they’re selling the car and pay attention to what kind of person they seem like – can you trust them? And if you are able to get a history report on a car, make sure you know How to Read a Used Car History Report. Your initial exterior inspection is when you look carefully for anything that seems off, such as mismatched panels or windows with different labels (both of which could indicate an accident), and any obvious defects in the body or paint. Also pay special attention to the tires to see if the treadwear is even as well as how old they are. When you test-drive the car, you want to make sure everything inside works the way it’s supposed to, and pay attention to how the car runs and what the handling feels like (such as if it pulls to one side, smooth braking, etc.). Finally, we always recommend you have a trusted mechanic give it a thorough inspection to see if they find anything wrong that you might have missed.

Financing for the Educated Car Shopper

auto financing

One final area that deserves a major chunk of your time when shopping for a used car is how to go about financing your purchase, which is something most people will need to do. It’s also a part of the process many people don’t understand very well.

Many people want to know if it’s better to finance their purchase at the dealership where they’re buying the car or through their particular favorite bank or credit union. It really depends on where you’re going to get the best rates and terms. Everyone just assumes a credit union will be better, but it’s not always true. At the right dealership, they will send your application out to a whole network of potential lenders. When multiple lenders are competing for your business, you end up the winner with the best possible rate and terms. Shopping around for the best car loan isn’t something most people have the time or desire to do, which is why a dealership with a strong network of lenders is a good way to go. And the best used car dealerships will have lenders in their network who can work with all kinds of credit, from fantastic to seriously challenged to open bankruptcies. This also happens to be a place where Auto City excels. Put simply, we rock at car loans!

Download and Read the Ultimate Used Car Buying Guide

ultimate used car buying guide

When we realized how much knowledge we’ve accumulated from more than 10 years of helping people find and buy the right used car, we knew we had to share it with the world. Why? Because part of our mission is reclaim the used car shopping process, one great sale at a time. Our Ultimate Used Car Buying Guide will help anyone buy a used car with confidence because they know everything they need to know. And if you’re in the greater San Diego area we invite you to discover all the benefits of the Auto City Advantage for yourself!