You’ve been through good times and bad times together. You’ve bonded over road trips and fought over flat tires. But there comes a time in every car’s life when it can no longer satisfy the needs of its owner. But for many college students, buying a new car is not an option, but you can trade in for a used one. Scared you’re gonna get jipped? Here’s some things you need to know.
Selling your old vehicle
You will probably get more money by selling yourself. However, when selling your own car (if it’s not completely paid for), make sure you know how much you still owe. Call the lien holder and ask what the 10 and 30-day payoff amounts are. You need to figure out if you can feasibly sell the car for more than you still owe on it. If you can’t make enough after the balance of what you owe, then you may want to look at trading it in to the professionals.
After the old car is out of the way, you’ll shop around and want to negotiate the price. Most dealers put a $3,500 – 5,000 mark-up of what they pay on the vehicle, giving them more negotiating room. So they could have a used car that’s worth $6,500 marked for $10,000. Do some research on the car you want.
A good place to go is MSN’s Carpoint. Carpoint describes the car’s safety and reliability and lists other people’s comments. Nada.com is a Web site that Alaska banks and dealers use to find the value of the car – they don’t use the Kelley Blue Book. You can also ask a dealer for a copy of the NADA print out and a copy of the carfax. The carfax will tell you if the vehicle has had any problems, such as flood damage, odometer fraud or any major accidents. This helps insure you aren’t buying a lemon.
The next thing is to get your own financing. This prevents the dealer from making even more money, that you won’t even know about. The way this works is you go to a dealership to buy a car, you decide to finance through the dealer, they send the contracts to the bank, if the banks approve the contract they’ll tell the dealership they will buy the contract at, say, 9 percent interest, the dealership then will tell you that you got an interest rate of 11 percent this is called a two point spread, the money in that 2 percent interest goes to the dealership, this usually can be between $500 to $2,500. So although it may seem like a hassle to go to the bank and get the financing yourself, it is worth your while.
Before you can drive your new used car off the lot you must have full coverage insurance. If you buy it from the dealer, it will be more expensive. Shop around. Having insurance if your car is totaled in an accident will make up the difference from your regular insurance. Regular insurance only pays what the car is worth – a value that goes down faster than you can pay for the car.
If you’re not sure ask questions. If it doesn’t feel right, it’s probably not. Good luck on purchasing your new used car.