5 things buying a used car taught me

The search for a vehicle leads to CarFax, Craigslist and Twitter, conversing with dealers in 140 characters.

By MSN Money Partner May 8, 2012 10:40AM

This guest post comes from Lindy at Minting Nickels.

 

Image: Couple shopping for car (© Image100/Jupiterimages)Before now, I never felt the need to buy a used car.

 

New cars are just so effortless. They bring the benefits of long warranties and blemish-free histories. They have relatively few surprises and relatively few questionable smells. You're guaranteed to get the maximum amount of years out of them, and they are easy to find.

 

But during my most recent car quest I was determined to find a car within my ideal budget. So for the first time in my life, I considered buying used.

 

Here's what I learned in the process.

 

1. The best time to search for used cars on Craigslist: Friday afternoon.

The most difficult thing about buying used cars is tracking them down. With so many dealers out there, it can be tricky to find that one used gem if you don't have a lot of time to scour online listings.

 

But in the same way I learned that Friday afternoon is the best time to post something for sale on Craigslist, it's also the best time to shop. Cars are no exception to this rule. The few times I'd searched Craigslist for used cars during the week, not many came up. But the one time I searched on a Friday afternoon, I found a whole gaggle of them. And I ultimately ended up buying one of those cars.

 

A salesman I worked with confirmed this advice. He said whenever his dealership has a car that's been in the inventory for too long, the company lowers the price, posts it to Craigslist on Friday and attempts to fire sale it over the weekend. (Post continues below video.)

2. The weirdest place to find a used car: Twitter.

One day I tweeted about a bad car salesman experience, and the next day I had three local car dealers conversing with me in 140 characters.

 

I felt so . . . modern.

 

Via Twitter, I told the dealers exactly what I was looking for, and one of them actually came back with a used car that fit my description. Although I ultimately didn't buy from them, I thought it was a really cool way to work the system.

 

I'm counting on one of you to strike a car deal through Twitter and come back and report it to me, OK?

 

3. The biggest blessing and curse all in one: CarFax.

In the process of buying a used car, CarFax made me feel warm and fuzzy. It told me that the 11-month-old car I wanted to purchase had new tires and no record of ever being in an accident.

 

But when it came to trading in my old car, CarFax was no friend.

 

Last summer, a 20-year-old hoodlum brushed my bumper while fleeing the scene of an accident he had caused. Of course, I stayed around and reported it to the police because justice needed to be served. Ultimately the guy was caught (yay!), and I was too lazy to make a claim for the 1-inch dent he'd left in my bumper.

 

But it came back to haunt me when CarFax reported the incident as an accident on my car's record, giving the dealer justification to knock $500 off my trade-in value. Had I been prepared for this, I might have been able to counter it. But instead, I just took the hit.

 

4. The best advice that actually worked: Get preapproved for financing.

This is great advice whether you're buying used or new. The Friday afternoon when I found the used car of my dreams on Craigslist, the first phone call I made was to the dealer to confirm it was no mirage. The second phone call I made was to my bank.

 

I told them the year of the car and the amount I wanted to finance, and my bank preapproved me for an interest rate of 3.09%.

 

I told the salesman the financing offer as we were negotiating the purchase of the car. His finance department countered with an offer of 2.9%. Before this, the best offer I'd been given by a car dealer for a used car was 4%.

 

I loved how easy this part of the negotiating process was.

 

5. The second best advice that actually worked: Walk away.

As you may have learned from my previous post about shopping for a new car, we test-drove a 2012 Honda CR-V. We looked at a few used models on their lot that day, too.

 

The salesman was pushing us to buy the new one. He also said that the prices of the used cars we looked at were pretty competitive, and that he couldn't go any lower.

 

We walked out that day without making any commitments. And what do you know: The next day, the sales manager called us up and said he could get us into one of the used models for the price we wanted.

 

I didn't take his offer because I had my heart set on a black interior -- I have kids with sticky fingers -- but I loved seeing how this negotiating tactic really worked in real life.

 

I'll admit, I got lucky in buying my used car. I found a 2011 Honda CR-V with a black interior, 22,000 miles and still within the factory warranty -- and it was listed in my price range. So I didn't really have much negotiating to do after all, which made the transaction quite easy.

 

We have a hunch about why it was priced so low. It had some ugly graphics on either side, which we had removed by a body shop the day after we bought it. It has a front tow hitch, so we're 99% sure the previous owners towed it behind their RV, and added the graphics so it would match their rig. There's also a small crack on the underside of the front bumper, but you can't see it unless you climb underneath the car.

 

No car buying experience is the same, and the process is generally a pain, especially if you're trying to find a deal. But if you take  away anything from this post, let it be this: Go with your gut.

My gut told me to hold out for a car payment of $180 per month. And though there were many people along the way (including myself) telling me it couldn't be done, it all worked out in the end. I'm so glad I listened, for once. (Calculator: How much vehicle can you afford?)

 

If I missed any key tips, I'd love to hear your input in the comments.

 

P.S.: Savvy readers will notice that I bought the same exact car as my husband. They are also the same color. Yes, you can mock us.

 

More from Minting Nickels and MSN Money:

VIDEO ON MSN MONEY

4Comments
May 9, 2012 5:01PM
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Here's the best advice on buying a new or used car - don't.  Unless you absolutely have to.  I love my 13 year old, paid off, Toyota Corolla. It has never needed to be repaired at 150,000 miles, and I hope to drive it another 150,000.  To me, a car should get you from A to B.  It's not an investment.  It loses value every day until eventually it's worthless, so why waste money on something like that.  Sorry auto industry, don't count on me to be buying a new car every five years.  I'm driving mine into the ground.
May 8, 2012 3:39PM
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Recently bought a new car, a 2012 Chevy Cruze.  We were looking to buy used before that to save money.....then we saw the price of used cars.  Used car prices are ridiculous now.  They're wanting 18K for 3 year old cars that sold new for not much more than that with 70K or even 90K or more miles on them.  Back in 2004 I was able to buy a one year old used car for almost half the price of the same model new the year before.  Not anymore.  The best deal on a GOOD used car we could find was on one that was 3 years old and didn't get anything near the gas mileage of my new one and my new one was only a couple thousand more.  Let's see...buy a new car with full warranty, no questions about where it's been, how it's been driven, whether it was maintained, that gets 38 mpg and pay only around 2K more than the used car that's 3 years old and only gets around 24 mpg when gas is almost $4 a gallon.   I also had an easier time getting financing at a good rate on the new car than I would have been able to get on a used car.   I said I would not pay more than $300 a month for a car payment used or new.  If he couldn't get me that, I would walk.  He hee-hawed around at first acting like he didn't think that could be done but when I showed I was serious about walking, I got it.   I also looked around on the internet and found incentives from GM that he was not going to bother to mention and asked for them.  It's not a "bad" thing to buy from a dealer, new or used, you just have to be firm about what you're willing to spend and do your homework.  Once I brought the incentives to his attention he was fine with applying them, he just wasn't going to volunteer them himself.  
May 9, 2012 11:15AM
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Consumer Reports advises not to focus so much on the monthly payment amount.  Looking at just that number allows dealerships to play games with finance charges, your trade-in value, and other fees, and may result in you not getting the best overall deal.  Rather, focus on the total price of the car, getting the absolute lowest interest rate, negotiating a fair deal for your trade, and not being hit with hidden fees or charges.  If you've done your homework beforehand, the monthly payment that results will be manageable.

Most financial experts, though, advise consumers to make a "payment" to savings each month for years, then pay cash for a car, if you can manage it.  Earn some interest on your money, and save a bundle on loan interest.
May 8, 2012 2:38PM
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Number one thing to know about buying a car: don't buy it from a dealer.

Number two thing to know about buying a car: if you don't know enough about cars to not buy one at a dealer, become friends with a car guy.

 

If you bought your car from a dealer then you got ripped off and you're not spending smart.

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