The National Institute for Consumer Education says that new cars cost $18,000 on average. While many can afford to pay this amount, there are cash-strapped people who prefer the cost-effective option: used cars.

There are several advantages to purchasing a used vehicle. If you take a good look at these advantages, you may even want to buy a used car instead of a new one.

Price

Money remains the main reason for purchasing a used car because brand new wheels are just plain expensive. The value of used cars is significantly lower than the new ones. Most cars lose about 30% of their value after three years.

Improved Flexibility

When you buy a used car, you avoid extra high financing expenses, such as insurance costs. Theft and comprehensive insurance for used vehicles are usually offered at a very budget friendly price.

Also, there are used car dealers who offer warranties, making the transaction all the more tempting. Sometimes, the original manufacturer warranty is even transferable to the used car without further charges.

If you want to buy a used car and are looking for a specific make or model, don’t fret because used car shops contain an extensive array of vehicles with varying brands. You will surely find the car that will best suit your needs and wants.

Certification Programs

Certified pre-owned programs are another trend in the used car industry that’s attracting more buyers. When you buy a used car, you can take advantage of this program implemented by car manufacturers. The program says that your car can come with a long term warranty provided that it meets a few requirements, including having low mileage and no history of huge damages. CPO cars undergo a thorough inspection process. Remember, though, that when you buy a used car, CPO vehicles may cost more.

Avoid Depreciation

Another good thing about used cars is that they have a lower rate of depreciation. New cars, on the other hand, drop in value the moment you buy them and take them out of the lot.

More Negotiating Power

Although this tactic doesn’t apply all the time when you buy a used car, you can always tell your dealer that it doesn’t make sense if you buy a used vehicle when you can spend just a little bit more for a spanking new car. If you’re not comfortable with this tactic, it’s good to know that you can always negotiate.

Get the Most Out of Every Dollar

If you prefer to buy a used car, but have your eyes on a vehicle with a sunroof or a navigation system, this won’t be a problem. You can get a set of wheels with all the latest features and gadgets from used car dealerships just as well. There are many used models that come with cool built-in features.

There are several other benefits when you buy a used car. Remember this guide to decide whether or not a used vehicle is the best choice for you.

Anyone would welcome the chance to get a brand new car, but when there are issues to consider (like budget); used cars become a more attractive option. The perks of buying used car more than makes up for not having a brand new one. This is why more people prefer to buy used cars.

With the convenience brought by the Internet to the business world, looking for used cars for sale has become a whole lot easier. FastLanes.net is a very informative website where you can get tips on the hows and wheres of buying used car. They also give advice on scenarios where buying used cars is a more practical choice.

The Money Argument

The practicality of buying used car is undeniable. It is the best option for people who need to have a car but are constrained by a tight budget.

If you think that people who can afford brand new cars are very lucky, think again. Brand new cars quickly depreciate because of the fast turnout of new models. There will always be a model that is faster, more attractive, and infinitely better. As a result of this, the value of brand new cars usually decreases by 20-30% in just a year. As opposed to buying used car, the depreciation stage is no longer a problem for the new owner. He will get exactly his money’s worth.

Buying used car also increases your chance of buying your dream car for a cheaper price. A year-old, second-hand convertible that’s still in excellent condition, for instance, is not a bad deal. If you buy it brand new, it is likely that you will continue paying on installment for more than a year – the same time frame when the vehicle starts losing a large percentage of its value. Ironic, isn’t it?

Advantage of Flexibility

People are more inclined to install new car features when they are buying used car. Although you can always have accessories installed when you purchase a new car, most people are hesitant to do so because of the fact that it is “brand new”. You don’t want the body to be scratched or mess up the engine while they’re still new and gleaming. In this respect, buying used car is a better choice if you’re uncomfortable with taking apart a new car.

Extended Benefits

If you are lucky, you could be buying used car that is still within its warranty period. This is an added advantage where, for the remaining warranty period and for certain conditions, you might be covered for car parts replacements and repairs. The insurance premium for a used car is also considerably lower. Lastly, there’s less hassle in buying used car especially when you are in direct contact with the original owner.

Most people do not enjoy buying a car. A survey conducted by CNN revealed that 75% of people would rather visit a dentist than face visiting a car dealership. It’s not that people don’t want a car – it’s just that there are so many pitfalls to negotiate and not everyone can be sure of the right steps to take. Here are a few points to keep in mind to make the process easier.

1. Ask questions, lots of questions. Try to ask sensible questions that will enable you to base your decisions on solid ground. But don’t be afraid to just ask and only stop when all your concerns have been properly addressed.

2. Do not let emotion drive you. Pretty cars with all the bells and whistles can blind you to the truth. More often than not you will end up paying more than you need to if you buy with emotion. Be impartial and see the car for what it is and not what you may have fallen in love with.

3. Know exactly what you want before you put a single foot inside the dealership door. An open mind can be easily manipulated, and usually not in your favor. Use brochures, etc, beforehand to determine exactly what you want within your budget, and don’t be swayed by smooth talk.

4. Talk to the dealer about the price and not the payments. Dealers who keep referring to the “easy” payments could be avoiding the issue of overall price, and you need to know why. Do your homework and you will know exactly what price fits into a payment plan to fit your budget. But if you focus on payment, you may end up paying more than you bargained for.

5. Know when the time has come to make a decision. That decision could be to walk away, or it could be to close the deal. You should constantly monitor how you feel about the offer being made to you. If it all feels right, then stay with it and see it through. But if you get even just a tiny twinge of something not quite right, be prepared to walk away.

Buying a car is not always easy. It’s not something most of us do very often and we all want to make the best use of our money. But with sensible and careful planning, and an awareness of the five points above, you can buy the exact right car for you at the exact right price for you. Happy motoring!

Many of us have been at the car dealership and have been drained by a salesperson during price negotiations for the purchase of a new car. Most people give in too easily or do not negotiate at all to avoid the dreadful act. This only means more money in the car dealers’ pocket, while you are out of several thousand dollars! Yes, they make that much in profit per car.

This article unveils the dealer’s selling tactics and how you can get around them. But before we dive into the new car buying tips, we need to understand what makes up the dealer’s profits.

In addition to the MSRP (manufacturer suggested retail price), which is the dealer’s cost for the car plus an additional 20-25% profit, a dealer also gets financial incentives from the manufacturer when a new car is sold. This is called Holdback.

Depending on the car, dealers can make hundreds on each car through holdbacks. Dealers also get additional incentives and bonuses on selling a car before the end of the month and/or quarter.

A shrewd dealer can make several thousand on a new car even by selling it at invoice price. This is how new car buying can become tricky for the consumer.

Ready to learn how not to put a dent in your wallet on your next car purchase? Here are four tips to get you started. Each one is a dealer tactic to watch out for.

1. The Guilt Trip

As you may have noticed, every desk in a dealership has photos of the salesperson’s family, instead of photos of cars. Midway in the negotiation, the sales person will bring them up and make it look like his little commission check can hardly pay for his daughters college and little Bradley’s braces.
A seasoned salesperson will soon have you feeling guilty for driving the price down and hurting his commission. Watch out not to fall for this tactic, since you already know about holdbacks and incentive programs from manufacturers.

2. Wearing You Down

Come prepared to spend half a day at the dealership or pay whatever the dealer asks for. Car Dealers are trained to delay and tire you out to the point where you give in and accept their price just to get out of there.
After you make your offer, sales people typically claim they would have to run it by their manager. You may then have to re-start negotiating with the manager, who is also a seasoned salesperson. This dance goes on for a while until you give in.
Remember, there are multiple dealerships in a city, so they need you more than you need them. Demand to speak to the manager after a certain time period or threaten to leave. Because you are devoting a lot of time to bargain with the dealer, they know you are a serious buyer, so they will not let you leave. The earlier you can speak with the manager, the faster you can leave.

3. The Test Drive

We all enjoy a good test drive and look forward to it. Although it is essential to test drive a car before you buy it, remember to not show your absolute love for the car to the salesperson. Their goal is to get you emotionally attached to the car, so it becomes a must have for you. I have learned it the hard way.
To hide your emotional tears from the salesperson, mention the features of a competing car in the same class, like the new shape, light, leg room, resale value etc. This will make the salesperson a little vulnerable.

4. Monthly Payments

This one is to confuse you. Dealers will start talking about monthly payments rather than the total price of the car. They will start by asking how much you are willing to pay per month and how much of a down payment you are willing to pay. Since people don’t want to look like they cannot afford a certain car, they will usually give a higher number. Big Mistake!
You have left little room for negotiation when this happens. Always steer the conversation to the total price of the car and do NOT mention any trade-ins at this point. Only after the total price of the vehicle is completely negotiated then talk about interest, monthly payment and trade-ins.

General Rule:

As a general rule, remember to only focus and negotiate on the Total Price of the vehicle. Everything else is pretty much the car dealer’s trough.

If the above new car buying tips seem like a lot of hassle, yet you still want to get the best price in town, there are some websites that do this for you. www.autoauctionbids.com for example is a great website for this because you can collect price quotes from multiple local dealers for a particular car as well as its competing car models (like Honda Accord, Toyota Camry and Ford Taurus) and compare them.

The website then allows you to send back the lowest quotes received for each car make to all participating dealers in your area through the website itself.

Dealers view this price and continue to submit new lower prices over a 3 day period. By putting local car dealers in such a price competition allows you to avoid the dreadful face to face negotiation and yet gets you the lowest price in town for up to 3 competing car makes.

The best part about AutoAuctionBids.com is that it is absolutely free for you and there is no obligation to buy after the new car auction is over.

Your car may be the second largest purchase you make in your lifetime. You must take your time and not let it become an impulse decision. Before you go out browsing dealer lots consider the following:

How will I use my new car, truck or sport utility vehicle? A mini-van will fit fine in a large family but might be out of place in a singles life. Do you go off-road a lot but still like to carry more than 2 passengers, go for the SUV.

Trucks have come along way with most comforts available in today’s truck rivaling luxury cars. But do you really need that to carry construction equipment to the job site? If you do not go off-road, do not buy a 4 wheel drive truck. The extra weight will only decrease gas mileage and increase maintenance costs. Afraid of the snow? Look to the variety of AWD vehicles on the market which provide excellent traction in the snow and also more economical operation. Take a serious look at your life and find the vehicle that most compliments your lifestyle.

Color choices. This is a personal preference but rational can come into play. In warmer climates, a lighter colored car will stay cooler. Certain cars are easier to keep clean. White and black are the worst while tan, silver, and brown hide dirt quite well.

Interior options. Do you need the heated seats? Well that depends on where you live and how much winter driving you do. Leather seats can be unbearable in the summer months and generally harder to maintain. Do you listen to music often? The premium sound system might be a great idea if you do, however if you only listen to talk radio then the standard system will be more than enough.

Insurance rates. Take into consideration the insurance rates before you start you car buying quest. A Honda may be significantly cheaper to insure than the Ferrari that caught your eye last week. Talk with your insurance agent to find out about how cars are classified. Sports cars generally raise premiums while family cars tend to lower them.

Who will service the vehicle? Having a dealership close by can be a blessing. If there are no dealerships nearby, buy a domestic car which most mechanics can work on. It is also important to examine the warranty offered before making a decision. I hope the few comments and suggestions above have given you some things to think about. Never rush into a new or used car purchase. Always take some time to think it over. If it helps, get out a piece of paper and write down the pros and cons of all the vehicle you are considering. Writing down this information is often all you need to get you thinking practically and on your way to making a good selection.

Old Car

New vs used. Which car is right for you? Consider the following.

Owning a brand new car is exciting. But financially speaking, it makes more sense to buy a used car. As soon as you drive a new car off the lot, it loses a great portion of its value. This is because your car is no longer “new”.

New cars lose about 40% of their value within 3 years, then depreciation starts to slow down. Why not buy a used car and allow someone else to take that depreciation hit?

The previous owner will have absorbed the steepest part of the depreciation cycle. At that point the costs of owning and operating the car will be reduced. The money you save on depreciation will surely go a long way.

Another benefit of buying used is lower cost. By buying used you pay less. You will also save on financing costs, insurance premiums, registration and licensing fees. You don’t have to worry about paying sales tax.

New Car

As with everything else there are a few downsides to buying a used car. There are greater chances for costly unwarranted repairs. You may very soon have to do major maintenance on your car, including replacing tires, battery, brakes, muffler, and perhaps even the transmission.

A used car is usually less reliable. You don’t know exactly what you’re getting into and how the previous owner treated the car. However, every situation is different and some used models may actually be far more reliable than some new ones.

If you can pay cash, go the new car way. Enjoy the feeling of knowing you’re the original owner of a new car in mint condition. Nothing can replace that feeling.

Otherwise do not hang your hat higher than you can reach. Practice financial prudence. Save your money and comfort yourself knowing that one day you will be able to afford that dream car. One day when money is no object.

Congratulations !!!! You got the deal you were looking for. Now is the perfect time to mention to the dealer that you are looking to trade in that car you are currently driving. This way they cannot jack up the new car costs and offer you more for your car to make it seem like a better deal. If your trade-in is in good shape you should be looking for a price somewhere between retail and wholesale.

If your car is spotless make sure the dealer knows he will not have to recondition it. Most research sites list trade-in value in the pricing reports, this is a good starting point. If your trade-in is less than perfect don’t expect more than wholesale price. The dealers will take clunkers but they end up on the auction block the next week.

Once all the numbers are crunched and the papers are filled out double check everything before you sign. Also look out for extras, which you do not need. Rust proofing is rarely needed as most manufacturers already offer a rust warranty. Also window etching, extended warranties and accent packages are highly overpriced and sometimes useless.

Now would also be a good time to inspect the vehicle one last time. Check for paint blemishes, how much gas is in the car (some dealers will actually empty the tank leaving you just enough gas to get to the closest station) and that it is the exact model you test drove.

Now sign the papers and drive home in your new car. Pat yourself on the back for a job well done.