Buying a used car can seem overwhelming and oftentimes, you feel like you are being taken for a ride. Time Financing Service ® is here to help you make sure you are not only getting the best deal but that you are getting a car that best suits both your budget and your needs. Below are some guidelines and a few tools to help make that possible for you.
Know Your Budget
You will need to determine how much you can afford based off of your monthly income and expenses. The general rule of thumb is that you should not spend more than 20% of your monthly income on your car loan payments. When looking at your budget, factor in the income that you actually take home (after taxes) and not your gross pay. Add up all of your regular monthly expenses and give yourself a little cushion for emergencies. This should give you an idea of what you can afford for monthly payments. You will also want to look at the gas consumption of the vehicle you choose since that will be an added monthly expense.
The Down Payment
Start saving in advance to make a down payment on your vehicle. To do this, set up a savings account and each month put your estimated payment into the account. This way you can get used to living without that extra money and grow your down payment all at once. The larger your down payment is, the less you have to finance. The less you have to finance, the lower your monthly cost will be.
Dealer vs. Private Sale
When deciding if you want to go through a dealer or a private seller, there are quite a few things to consider. You will need to decide what is best for you. Do your research ahead of time and know the actual value of the car you are looking at using Kelley Blue Book. If you are trading in or selling your car, you can find that value here as well.
Typically with a dealer, you will pay a higher sticker price, but the price generally includes a lot of extra legwork that is already done when you purchase the car. They handle tax, tag and title transfer for you, run the vehicle’s history reports, have the vehicle professionally detailed, will accept your trade-in as a down payment and often have methods of financing available in-store. Just know ahead of time that they need to mark up the vehicle to absorb these extra costs they are incurring so you will more than likely pay a higher price. There is ALWAYS room to negotiate so don’t seem too eager with the first price they throw out there for you.
When purchasing from a private seller you have a little more wiggle room with the price of the vehicle since they aren’t paying a salesman or administrator to handle the paperwork. There are a few things you need to do on your end, though, to make sure you are getting a good deal and a great car. It’s around $30-40 to run the vehicle history using Carfax.com and it’s super easy and fast. Just use the vehicles VIN # or license plate to run the report. This is a must when buying from a private seller! It’s also a good idea to take it to a mechanic you trust to look over the vehicle to make sure they don’t see anything wrong with it. Once you’ve checked the car out in detail, it’s safe to make an offer.
We compiled a list of questions to ask when buying a used car to help you evaluate which vehicle would be best for you and where you can get the most bang for your buck. Explore all of your options and make sure you shop around before making a big purchase like buying a car. Oftentimes if you widen your search area to nearby locations, you can find better deals.
One of our favorite apps to use when searching for the best deal is Car Gurus. It can be downloaded to any smartphone or you can look it up online at CarGurus.com. This will search a large radius of used cars for sale and let you know what kind of bargain you are getting!
Edmunds Car Reviews & Pricing
This app takes the work out of figuring out trade-in values, car values and can even show you inventory at a dealership of whatever make and model you are looking for.
This is a pretty cool app, too. You can even take a photo of any car you see and eBay will search it for you! This is the best tool if you are looking for private sellers and you will be sure to find a great deal.
Whatever you do, make sure you are honest with yourself about what you can afford. Keep your expectations real and within your budget. You can still find a great vehicle for less money, you just have to do your research and look around.
We provide our clients with three safe and secure application options. You can call one of our locations, fill out an online application, or stop by one of our offices and a knowledgeable associate will walk you through the process.
At Time Financing Service ®, we pride ourselves on being responsible lenders. Our interest rates and our lending practices are governed by the North Carolina General Statutes for Consumer Finance Companies. Be sure to take a look at these Resources for more information on personal loans and ways to protect you from lenders who do not have to follow current state laws.