To find your dream car, you have to know where to look for it.
And the best place to look for it is online. When it comes to finding a quality used car that suits your needs and your budgets, going through a traditional dealer is rarely the best option. Shopping for a big purchase, like used cars, online makes sense — so long as you do your research carefully. Let’s explore the benefits of finding your next used car online, and also certain guidelines to making the best choice.
1. Use online listings to your advantage. Here’s how they can help.
Online listings are a quick and easy way to explore the offers, features and conditions of the same used car model being sold by different dealers.
You’ll find that online prices are cheaper.
There are two main reasons why: 1) Online used car sellers don’t need to pay for a physical space, so they don’t have as many overheads as brick-and-mortar dealerships. This allows them to adjust their prices accordingly. 2) They get their profit from the number of cars they sell, and offer lower prices because their focus is on volume. Brick-and-mortar dealerships can only hold limited cars, so they need to squeeze out as much money as they can from each car.
You don’t have to deal with sales pressure.
Salesmen are professionally trained in the art of persuasion. This is a problem if: 1) You're not 100% sure about what to buy, 2) Finding the best deal matters a lot to you. Online car sales let you take the time to make your choice with zero external pressure.
Shop at your own pace.
Imagine you're visiting your fifth car dealership in two weeks. You've found an offer that's "reasonable" and "close enough." You're tired and fed up. You might just end up taking it and missing out on a better offer. Online listings help you look at more cars in less time.
Search independent reviews. Used car dealers will always have the best reviews on their website. But you want to take a look at not-so-good reviews as well. Basic online search tools can help you with this.
2. Try before you buy
It is essential to test-drive a used car before buying it. Your drive should be no shorter than 30 to 40 minutes. Have a check-list ready to remember to test everything. Here are a few items to add to the list:
- Open and shut all car doors to make sure they don’t get stuck.
- Check the radio, but keep it off during the drive so you don’t miss any sounds (e.g. engine knocks or screechy brakes).
- Test the car’s engine power on the highway
- Take it through twists and turns to test its suspension, brakes, and transmission.
- Check that all the smart features (Bluetooth connectivity, parking sensors, navigation system, etc.) are working.
- Find a parking space that’s the same size as your spot at home to make sure the car will fit properly.
Keep in mind that most online car dealers will bring the car to your home for a test-drive free of cost. Always insist that they do so. You must also get documentation of the car’s history — inspection records, registration history, emissions records, etc.
3. Be on top of your finances
Start by exploring different options. Are you taking out a loan from the bank? Are you buying direct from the seller with a down payment and EMI? The single most important thing to keep in mind is that offers that seem too good to be true, usually are.
Fix your budget in advance.
This will help you avoid hidden costs. A low-interest loan or EMI will almost certainly have a longer life. This means you might be paying more money in the long run. The longer the term of the loan/EMI, the more you are going to pay. It’s always a good idea to keep your loan term as short as possible, even if the interest is slightly higher.
Don’t ignore early payoff penalties.
There are two scenarios you need to watch out for. Let’s say you have enough money saved up to buy your car in cash but you apply for a loan in order to get a promotional rebate. Your plan is presumably to pay off the loan immediately but what might end up happening is your rebate will be offset by the early payoff penalty. And if the penalty is more than the rebate, you’ll end up losing money. The second scenario to watch out for is one where you find yourself deciding to sell your car before the loan term ends. You might have to pay a penalty for this. Unfortunately, people usually don’t realize these disadvantages when making their decision or financial plan. Research, research, research.
So, in a nutshell, to find the best used car option you should:
Do your research
Take that test drive.