How To Really Save Big Money On Buying A Used Car
Keywords: used car, save money on a used car, finance, interest, car, buy used car, used car dealer, how to
Yes, it is better to buy a used car than a new car. You save on depreciation, taxes and insurance. Most people do not realize that, although a vehicle is necessary, it is also the worst investment possible as it depreciates 20 to 30 percent in value the moment a new car is driven off the dealers lot. Take advantage of someone else by buying a slightly used car (1-3 years old with 10,000 to 30,000 miles). Let someone else pay that ridiculous depreciation. Besides with all the recent improvements in cars of all makes and models it is not uncommon for a car to run to 200,000 miles.
It used to be that back in the 80s a import would run 100,000 to 150,000 miles and a domestic like Ford or GM was good until 80,000 to 100,000 miles and then it was time to junk it. With recent improvements it is not uncommon for a car to reach 150,000 miles plus of any make. When you equip this with the fact that most states have a rather high sales tax, property tax or combination thereof that is directly related to the value of the car, a used car with a lower value becomes a more attractive option. Even insurance is lower on used cars. So with all the savings in buying used versus new, should you pay the asking price at your local used car dealer?
Absolutely not. Having experience as one of the top car salesman in the entire country, I can definitely explain how a used car dealership makes money and exactly how much they will profit off of a sale. The basic rule of thumb is that for every $10,000 in price there is at least $2,000 in markup or profit. So, in a $20,000 car the asking price includes around $4,000 in dealer markup (profit). On top of that there is a dealer processing fee that almost every dealer charges (average of $300 to $600 per car). The so called dealer processing fee is just pure gravy or profit to the dealer. The processing fee came about as a way to generate non commissionable profit (profit that the dealer did not pay a percentage of to the salesman). Basically, the dealer processing fee has nothing to do with any processing and is a scam (do not pay it and if they refuse to remove it go elsewhere. If enough people do this they will remove the bogus fee).
Now, there can be costs that the dealer has in detailing, servicing, etc to the car. These are usually minimal and always ask for documentation for anything they say. For instance, if the dealer says we had a whole new brake system put into that car and it cost over $2,000. That may be true, but it probably is not. The actual service records will probably show $300 or so. If they will not show you the actual service records leave and look for another dealer. This means they are hiding something.
So, now you know how they markup their cars, but first you must understand that there are some very honest and reputable dealers, but there are 10 times that many that are extremely dishonest. Here are some definite rules that you must follow.
1) Drive the vehicle. Do not take their word for anything. Drive it. Take it for the day and drive it on the highway, curvy roads and in stop and go traffic. Use it like you normally would. This will reveal problems or items that need to be looked into or fixed.
2) Always, after you have settled on a car that meets your needs, take it to an independent mechanic. This is not as important on low mileage 1-3 year old cars, but vitally important on older cars with higher mileage. The independent mechanic or shop will give you a complete run down for about $60 that will reveal everything about the car and whether or not it is a good deal or a nightmare waiting to happen.
3) Run a Carfax report. This can reveal previous accident and or flood damage, but it does not over rule the independent mechanic. Sometimes a mechanic will find things a Carfax did not report like a flood or car accident. Not all accidents and flood damage are correctly reported.
4) Always negotiate the purchase price. Never let them switch you to payments until you have agreed to a price. It amazes me how many people are easily switched to payments where they have no idea what the purchase price and profit or markup are. Most do not even know the term or rate before they commit. They just want you to commit and then the finance manager befriends you and takes even more money out of your pocket. At most dealerships the front end profit averages around $1500 on a used car and the back end or finance office profit averages around $1700. This money comes from one source the consumer.
5) Negotiate. Do your homework. Be ready to walk and look elsewhere if the dealer will not be reasonable. Look into separate financing. What most people do not realize is that a home equity loan could save you huge on rate and interest. A car dealer as a rule adds 2 to 3% to the actual rate for profit and they call it their convenience for providing a service (as I saw on a CarMax sign and do not think Carmax will save you money with their no haggle price. A simple comparison will prove this). In California they have created laws and legislation to curb this practice or limit it. Always ask the finance manager for the approval rate and proof. The banks will each fax over an approval. If the rate is too high then walk.
6) An even better alternative is to buy your car online. I recently bought a GMC envoy through Ebay and got a better price than I could have at a dealer only auction. I paid about $3500 less than what the dealers actual cost would be on this vehicle. I also did not pay any bogus processing fee. When I drove by some local dealers and showed them the car and told them what I paid they said it was impossible until I showed them the bill of sale, title and paperwork. Now several of these dealers are buying their own cars online and through Ebay. It is important to note that you must do your research online and delve deeply into the car, the sellers feedback and transaction history, email questions that you have, and look into price and listing histories for the make, year and model of car or truck you are interested in. Watch out for processing fees and such (they are all listed clearly). The best thing about buying online is you control the price, no back end profit for
the dealer, and you save big!
How big can you save online? I saved over $9,000 off of what local dealers were asking for the same envoy and mine had even more options. The best deal on a used car is to avoid the dealer completely and buy it online. You can find your own financing regardless if you have good or bad credit and save a ton. If you must go to a dealer, never fall in love with any car. The dealer will use this to their advantage. Use the steps above and give them a fair offer. You want to end up at $500 over their cost and that is reasonable. I have seen profits of upwards of $13,500 or more on one vehicle worth $30,000. That is sickening. The average dealer profit is $2,500 to 3,000 per used car. Do not get taken by a used car dealer. Do your homework and compare. Not only will you save just from buying a used car, but you will save for years on things like term, rate, interest, taxes, etc. The average American works too hard to fork over one or two months earning to the dealer f
or profit.
For more great information, tips, safety and money saving products for your car or truck please visit: www.mdwholesale.com
Previous Articles Highlighter:
Comprehensive Guide On Buying The Car (1)
Of course, everyone knows that there is an art to buying a new car that everyone must know sooner or later. Every car buyer knows that there are tricks to getting a car at a reasonable price.
Multi-Purchases While Buying Gas (2)
So, don't forget to follow the guidelines for fuel efficiency and save your precious money for other things. The more you take care of your car the less you spend money on your fuel.
Proper Car Care Includes Rust Protection And Treatment (3)
If you notice a scratch or chip, nick that goes through the paint make sure you treat it properly. Get matching touchup paint by using the paint code inside your door jamb (most auto parts stores and dealers will have this matching paint or can get it for you).
The Latest In Headlight Cleaning And Restoration (4)
These headlight cleaning kits can be used by the average consumer. This patented headlight cleaning and restoration kit is available for under $20 and is therefore much more cost effective than replacement and aftermarket lenses.
Car Fraud A Growing Concern On Auction Sites Like Ebay (5)
Dont rely on a sellers word.- get it in writing! 6) Undisclosed flood and frame damage. This is a big one. Unscrupulous car dealers and body shops are selling crashed cars and flood cars, doctoring titles, not properly listing damages and repairs done to make a quick dollar.
Online Auctions, Used Car Fraud And What You Need To Know (6)
A carfax and a good inspection by a qualified technician will reveal the true mileage. Unbelievable, I wonder how many times this really occurs. Always get a Carfax.
Electric Cars, What Are They Up To? (7)
They also point out that while the Toyota Prius can take off from a stop using only an electric motor, the Civic Hybrid can't. It is a bit odd, considering that the car is going for the ultimate gas mileage.
Preventative Car Maintenance In Summer Helps To Avoid Breakdowns (8)
If you need your car's tires to last long and perform efficiently, you will need to inflate them properly. Properly pumped up tires help maintain the best possible contact with the road giving the vehicle steadiness and speed.
Ways To Make You A Good Negotiator (9)
Look at how many cars I've sold this weekend (This is where he will show you his list of sold cars. If he does this, then tell him that he doesn't need your money).
Proper Car Washing, Polishing And Waxing From The Experts (10)
Follow the directions on the bottle. Then wash the car. You will find it easier if you use a long handled wash brush (most auto parts stores have these).
Taking Care Of Your BMW In Orlando, Florida (11)
Consult with your BMW Orlando dealer as to when you need to change your oil. Your dealer will be knowledgeable enough to know at what intervals you need to change or oil as well as what is the best kind of oil you should add to your engine to keep it lubricated.
Replace The Air Filter In Your Car (12)
This can be caused by the blockage in the car fuel filter. Some time the car gas comes with dusts which are filtered by the fuel filter. But you need to take good care of your fuel filter as well.
Caring For A Convertible Top (13)
When this treatment is applied to the windows, it removes the oxidation and film and restores optical clarity just like it does with headlight lenses. The results on plastic windows are amazing.
Choosing The Right Mechanic For Your Sports Car (14)
Follow up with the names the mechanic gives you. Find out what others have to say about his work, ability to meet estimates and deadlines, and customer service. Good mechanics develop good relationships with customers, and references should offer glowing reports.
How To Save Big Money On Repairs And Auto Parts (15)
If it is the bulb, the cheapest replacements can be found at Walmart or on Ebay. It is recommended you go with brighter Xeon bulb s as they are only a few dollars more and increase brightness and night visibility by over 20 percent.
Got Bad Credit And Need A Car Loan? (16)
Maybe there were a few late payments that were unavoidable due to an unplanned medical emergency. Or maybe house repairs, tuition hikes, etc whatever the reason you have some negatives on your credit score and these can seriously affect your ability to obtain credit and a car loan.
Chemically Improving Your Gas Mileage In Your Car (17)
For years Big Oil has offered three or so different grades of gas octane 87 regular, 89-90 premium and 91-94 super.These grades are actually based upon a 100 octane scale where the cleanest burning, most ideal fuel was propane (clean burn fuel).
How To Protect Your Car And Treat It For Rust (18)
One area of grave importance is rust protection and treatment. Rust is like cancer for a car. Once it starts it will only get worse and grow. Being that every car manufacturer except Saturn uses sheet metal and all use metal frames and undersides, rust is a major problem.
Some Scams Which Usually Offered When You Go To Buy A Car (19)
2. The Bounced Check Scam This is when you walk into a dealership with a bank draft and the dealership charges that they can't accept your draft because your bank bounces checks often so they now refuse checks from that bank.
Dealership Scams While Buying A Car (20)
It is a common sales strategy. When the average buyer hears it, they think that by purchasing a new car with a new dealership, they will automatically owe no more money on their current car.
Newer Articles Highlighter:
Buy Gas From A Busy Station (1)
Another small but useful tips to fill your car tank and saving some more from it, the more care you take of filling your car gas the more you save yourself of other hazards that could have arise otherwise.
How To Find And Install Auto Parts On Your Own Vehicle (2)
When you first thing of recyclers you may think that they are probably rare but the truth is there are a lot of companies that offer this service. The parts they have are in most cases just as good as new and you will pay a fraction of the price.
Tips For Safer Driving At Night (3)
Working for an emergency squad, you see the grimm results of victims not wearing their seat belts - being thrown from the car - this resulted in many deaths, paralization, severe burns and disfigurment, etc...
Routine Car Polishing Gives Your Car A Spruced-up, Fresh Look (4)
Clean the windows using some window cleaner. Water and a soft towel should do for the wheels; you can use some spray on tire shine on the tires to retain the new look and give them a protective covering.
Buy A Smarter Vehicle And Travel Tips (5)
The concept behind overdrive gears is that they decrease your engine speed, saving you on engine wear and gas consumption. If you are uncertain about how to use your overdrive gears, ask a friend or put in a call to your mechanic for some advice.
Hyundai Closing In On Honda As Their Brand Value Rises (6)
Hyundai has out priced their competition and now sits poised to become, perhaps, the major automotive player similar to what Walmart did with its retail stores. According to the Harvard Business Review, Hyundai has the perfect business model and will be the automotive manufacturer to beat in the coming years.
How To Avoid Dealership Scams (7)
When you see an extra dealer mark up fee, ask the dealer to get rid of it. If they refuse, it is pretty much up to you, but remember that if you do pay the extra dealer markup, you are overpaying for no real reason.
Best Summer Maintenance Tips For Your Car (8)
The added heat and strain of the air conditioning system can result in breakdowns and being stranded. Here are some tips for your car this summer that will keep you going, keep you cool and minimize repairs.
Choosing Tires For Winter Driving (9)
Another key to remember is to make sure that all of the snow tires you equip your vehicle with are of the same size, type and tread. This is particularly important if your vehicle is front wheel drive where using mismatched rear wheels may result in a loss of traction when braking on the icy roads of winter.
Should I Use Wax On My Car? (10)
Work on a small area at a time, we recommend an area of around 2 to 4 foot square at a time, this will allow you to concentrate on small area and will give you better results.
How To Properly Fix A Flat Tire (11)
do not have all the tools necessary for a proper tire change. Also make sure you have a lug wrench that fits your car. This may sound stupid, but when I worked at a car dealership if the car didn't have a lug wrench and the customer wanted one, they just took one out of any car and put it in (never looking to see if it would fit the lugs on the car in question).
Can You Get A Good Deal At A Government Seized Car Auction? (12)
Each state has their own separate rules governing wholesale auto auctions, but they all generally run the same. The car has a set minimum or reserve and will only sell above this minimum.
How To Properly Check Tire Pressure And Condition For Safety (13)
If you have too much pressure then let some out by pressing a key or screwdriver into the release valve and then check it again. If your tires have too much pressure it can cause them to prematurely wear in the middle and reduce the actual area of the tire that meets the road and can reduce your safety.
If You Love Drifting Or Formula D Racing The G4 Channel Is A Must (14)
If this is the case then you need to get a cable provider that can give you the channel G4TV that you want. G4 allied with itunes to make pod casts available through ipod users.
The Benefits Of Driving A Plug In Hybrid Car (15)
This vehicle gives off no bad emissions at all when it is running on electricity only. MSRP for plug-in hybrids are as much as twenty percent more than regular hybrid cars and the reason for this is primarily due to the requirement of a larger battery size.
How To Drive Safely At Night And During The Fall (16)
Streaks make glare worse. Check the washing fluid often. To avoid skids in rainy weather, slow down. If you do skid, steer in the direction you want the front of the car to go.
Various Factors To Take Into Consideration If You Are Searching For A BMW Cincinnati Dealership (17)
Keywords: bmw dealership, bmw cincinnati dealership If you are searching for a BMW Cincinnati dealership, the first thing your going to have to realize is that there are quite a few different Cincinnati dealerships to pick from, so this could end up making it somewhat frustrating and confusing as to what is the best way to make a decision on which particular dealership you should go to.
Buying A Car? Do These Things First (18)
These dealers might be interested in making you stretch out the term of the loan to make the loan sound more affordable. However, by extending the length of the loan, your total cost will increase.
How To Get The Best Rates When Insuring Your Sports Car (19)
But there is no harm trying. So, work out on these details, because the fact that you own and ride a sports beauty need not give you headaches! Gregg Hall is an author living in Navarre Beach Florida.
Preferred Tools Of The Car Detailing Trade (20)
The orbital polisher is very effective. It creates an oscillating effect; produces zero rpms and recreates the motion of hand waxing at 1700 oscillations per minute. The Orbital Polisher: Leaves no swirl marks Does not require the use of glazes Provides consistent results.
Permalink to How To Really Save Big Money On Buying A Used Car