Car buying and selling is one of the more popular posts on our site because smart car buying and reselling can really help your budget or break your budget. It can affect your finances in the hundreds, even thousands, positively or negatively.
That’s why each year, we share articles on car buying and selling.
A few days ago, we shared some hot tips for reselling. Now it’s time to share some additional tips on car buying that help provide more ideas on past car buying articles we have shared, this one specifically dealing with car insurance and car buying. Your car insurance is a key part of your purchase price and needs to be considered.
Buy Previously-Owned to Save Money on Your Auto Insurance
One of the most important things to take into consideration when looking for a new car is how much money it will tack on to your auto insurance costs. This is something most people forget once they walk into the showroom and catch the glisten of that shiny, new sports car in their eyes. If you are working on a budget, however, consider previously owned. It might not carry as much bragging rights when you show off your new wheels to your neighbor, but the cost savings are worth it.
Previously-Owned Isn’t as Bad as it Sounds
A mistaken assumption is that a used car will be a clunker, no matter what. This isn’t true. Yes, there was a time when used cars were unreliable, and you could purchase a lemon with no way of knowing until it was too late, but those days are past. Today, auto dealers understand that they can make as much money from their used-car sales lot as they can their new-car sales lot, so they make certain to boost this portion of their business.
One way they do it is by certifying their used vehicles. Once the owner turns the old car in to purchase a new one, the dealer inspects it to ensure that everything is in order. If the owner kept the maintenance up at the same dealer through its service department, the dealer can verify the vehicle was serviced properly and certify its reliability. So, when you’re looking for a new car, ask the dealer about certified used vehicles as well, because you may find one that’s old but looks and runs like new.
If you are shopping privately or at a dealer that does not certify the vehicles, do the certification yourself. Meaning, take the potential car into a local shop that will give you a “pre-purchase” inspection. We paid $19 the last time we bought a vehicle and it was $19 well spent! They will tell you about any potential issues or problems and what you might expect as far as upcoming (or current) repairs and costs. All of that can be considered in the purchase, as well as in negotiating power.
Used Doesn’t Necessarily Mean Used
Another thing to look for to save money on your auto insurance is demonstration models. Many dealers sell demos off the lots that are brand new but have barely been driven, and because they have a few miles on them, they have to sell them as used. If the car is listed as used on the sales contract, you might save some money on your auto insurance once you notify the company that you’ve replaced your older vehicle. Depending on your carrier, this may also hold true for “last year’s models.”
Enlist the Help of an Expert
Before you hit the lots, enlist the help of a local insurance agency if you don’t already have an agent. Talk to him or her about your current auto coverage and how buying a previously owned vehicle rather than a new one can save you money. He or she will review your current policy and look for ways to keep you on the road within your budget. In fact, he or she may be able to combine all of your insurance, e.g. auto, home, life, etc., into one policy for even greater cost savings.
Take into Consideration Industry History
What we mean is if you are buying used, especially consider a reliable and long-lasting car based on history and industry standards. Not only take into consideration is historical reliability, but also the cost of repairs for the particular makes and models (this is a good question to ask your mechanic at a pre-purchase inspection). By taking into consideration the longevity and cost of repairs, this give you an idea of how much money this vehicle may cost you in the future – will it likely nickel and dime you? Or will it likely be a long-lasting car with less expensive repairs if you take care of it well?
If it is time for a new vehicle, consider used. If you visit several dealers and look at their certified used selection, you will likely find a beautiful new (to you anyway) car that will save you money on its purchase price and on your auto insurance coverage. Who knows? Maybe you’ll be able to afford that sports car after all; it’ll just be an older model.
What tips do you have when it comes to buying a used car?
Here are some additional articles you can check out on car buying and selling: (just click on the picture to be taken to the article)