Denver Auto Company - Colorado Dealership

Steps to Buying a Used Car

Buying a Used Car

If you've decided to buy a used car, you've already made a smart decision. You can get a car that's almost as good as a brand-new one without paying for the depreciation that wallops new car buyers as soon as they drive the car off the lot. Even cars that are only a year old are 20-30 percent cheaper than brand-new cars.
But there are other good reasons to buy a used car:

• You'll save money on insurance.
• Bigger bargains are possible for the smart used car shopper.
• Used cars are more reliable today than ever before.
• Some used cars are still under the factory warranty.
• Most new carmakers now sell certified used cars, which include warranties.
• The history of a used car can easily be traced using the vehicle identification number (VIN).

New vs. Used

While the great feel and overall pleasure of driving a brand new car is undeniable, it almost always makes more financial sense to buy a used car.

New cars lose about 40% of their value within 3 years, at which point the depreciation starts to slow down.
With used cars, the previous owner has absorbed the biggest or steepest portion of the depreciation cycle. You buy at the beginning of the low-cost part of the car ownership cycle, and almost all of the costs of owning and operating a car will be reduced. Some of the benefits of buying a used car include:

• Lower purchase price
• Lower depreciation
• Lower financing costs (in the form of fees and interest paid)
• Lower registration and license fees (which are usually tied to the value of the car)
• Lower insurance premiums

Pre-Purchase Independent Inspection

It's best to have any used car inspected by an independent mechanic before you buy it. For about $100 or less, you'll get a general indication of the mechanical condition of the vehicle. An inspection is a good idea even if the car has been "certified" and inspected by the dealer and is being sold with a warranty or service contract. A mechanical inspection is different from a safety inspection. Safety inspections usually focus on conditions that make a car unsafe to drive. They are not designed to determine the overall reliability or mechanical condition of a vehicle.

To find a pre-purchase inspection facility, check your Yellow Pages under "Automotive Diagnostic Service" or ask friends, relatives, and co-workers for referrals. Look for facilities that display certifications like an Automotive Service Excellence (ASE) seal. Certification indicates that some or all of the technicians meet basic standards of knowledge and competence in specific technical areas. Make sure the certifications are current, but remember that certification alone is no guarantee of good or honest work. Also ask to see current licenses if state or local law requires such facilities to be licensed or registered. Check with your state Attorney General's office or local consumer protection agency to find out whether there's a record of complaints about particular facilities.

There are no standard operating procedures for pre-purchase inspections. Ask what the inspection includes, how long it takes, and how much it costs. Get this information in writing.

If the dealer won't let you take the car off the lot, perhaps because of insurance restrictions, you may be able to find a mobile inspection service that will go to the dealer. If that's not an option, ask the dealer to have the car inspected at a facility you designate. You will have to pay the inspection fee.

Once the vehicle has been inspected, ask the mechanic for a written report with a cost estimate for all necessary repairs. Be sure the report includes the vehicle's make, model, and VIN. Make sure you understand every item. If you decide to make a purchase offer to the dealer after considering the inspection's results, you can use the estimated repair costs to negotiate the price of the vehicle.

Auto Financing

Used car financing is the method by which buyers purchase vehicle that they cannot afford to pay for outright. Used car financing is provided by banks, credit unions, auto dealers and other third-party lenders. However, unlike financing a new car, used car financing usually comes with more criteria that must be met before approval is given. In the case of a used car, the vehicle must be determined to be worth the amount that the buyer is asking for. Credit history plays a very large role in the approval process as well, as providing financing for a used vehicle is more risky for the lender due to the lower value of used vehicles. By reading the expert articles provided here, you can educate yourself about the many details to consider when searching for used car financing.

Local Credit Unions like Bellco and Public Service have the best terms and rates in metro Denver area.