If you are wondering how to buy a used car and what age and mileage are best, the short answer is in finding the sweet spot where age and mileage come together to give you the best return on the dollar. This means, with regular maintenance and years of reliable transportation. The longer answer is in overcoming some of the challenges you may encounter when buying a used car. Your best bet is being prepared, knowing what to look for and expect from used car dealers, obtaining a loan, and knowing when you have found the most car for your money.
Shopping for a Used Car
Buying a used car over a new one will, hands down, give you the most value for your money. When shopping for a used car, it’s natural to think that you will easily find the make and model with your desired preferences, such as the right colored car with a sunroof. Unfortunately, it’s not that easy. The more unique your preferences are the more difficult it may be to find that car.
The fact is, car lots, used or new, have limited inventories. The range of colors, options, and configurations for cars is so broad, there are thousands of combinations, it would be impossible to stock one of each combination on any lot. On a much more practical level, most car lots are stocked with inventory that is likely to move quickly. When you begin shopping, depending on how unique your preferences are, you may find that car right away or it could take a while. If it becomes too much of a challenge, it may be time to compromise.
Challenges in Finding Reputable Dealers
It’s difficult to shake the stereotypical shady image of a used car dealer. It’s an especially well-earned reputation if you have ever experienced high-pressured sales tactics to the point of harassment combined with glaring insincerity when all you wanted to do was walk around the lot for a look-see.
To be clear, if a salesperson latches onto you and begins an interrogation beyond a few general questions or wants to run a credit check “just to be sure,” it’s best to walk away. However, the truth is that the shady stereotype is not a fair assessment and should not be applied to all used car dealers. There are reputable ones. A used car dealer’s business depends on its reputation. It’s their business to ensure they provide a quality used car, one that’s dependable and has had any problems fixed before it is sold.
To help decide if you are dealing with a reputable dealership, before shopping, read the online customer reviews shared on Yelp, Angie’s List, and Google. The more reviews the better. Also, look for a service center. Used car dealers that have their own garage and certified mechanics is a good sign that the cars on the lot have been thoroughly inspected and have had any mechanical issues resolved. Finally, look for dealer warranties. Not a 30 day or 60 day one mandated by state law, but a dealer warranty that backs the car’s performance. The longer the warranty the better, but 12 months should be your benchmark.
Securing a Reasonable Loan
Before applying for that car loan and securing a reasonable interest rate, know where you stand with your credit. There is no reason to be blindsided. Check your credit score. It’s free and can be easily obtained online from any of the three credit rating bureaus. Securing a reasonable loan will be tied to your credit history and rating. To improve your rating, first, check your credit report for errors and have any errors corrected. Next, bring any past due balances on credit cards and the like up to date. The more you improve your credit score first, the better chances you have of securing a reasonable loan.
In general, you will usually get better interest rates through dealer arranged financing than a bank. They will submit your application to multiple lenders to get the best rates and terms. If the dealer is a ‘buy here, pay here,’ it means that they offer in-house financing. They specialize in working with customers that have limited credit or bad credit. The terms will likely be stringent and the interest rates higher.
Finding the Sweet Spot in a Used Vehicle
The sweet spot in a used vehicle is the intersection of where mileage, age, and price come together to get you the most reliable car for your money. In short, it relates to a car’s depreciation. Finding it is more than just about value, but saving money.
When you drive a new car off the lot it depreciates by approximately 22% that first year. During the next two or three years it will continue to depreciate until it begins to level off at year 4. To put it in numbers, a new car selling for $24,000 will depreciate by over $5,000 the first year, and by year 4 it’s lost approximately half its value.
The sweet spot for used cars is that intersection where the vehicle has depreciated to the point where depreciation will occur only gradually over time but will continue to offer reliable transportation for years.
In that regard, keep in mind that the “best” age and mileage of a car can vary greatly. The average mileage for a car is 12,000-15,000 per year. A four-year-old car with 60,000 miles or more is not that unusual. These days it is not uncommon for a car to last a decade or more and to easily exceed 150,000 miles or even more. If the car is in good-to-excellent condition, inside and out, it’s a good indication it has been well-maintained and that you have found your sweet spot in a used vehicle.
Now that you’re armed with the knowledge on how to buy a used car, check out our extensive inventory of quality used cars in Arizona.