Used car buying tips: How much should I pay for a used car?

Buying a car can put a dent on your budget. Regardless if it is brand new or a used car, it is still a significant amount that typical households don’t splurge on a regular basis. Purchasing a car requires a lot of thought and bigger savings on the side, so the usual expenditures and responsibilities won’t be sacrificed.

Buying a used car is smart because it entails saving some cash

Being practical and cost-efficient is the smart way to go nowadays. Sure, there are benefits of purchasing a brand new car but buying a used car is the route that most real-world folks go to. There is nothing wrong with buying and driving a used car in the first place.

So as a smart and practical prospective used-car buyer, how much should you be preparing and allotting for your future car?

Unfortunately, there is no magic number to provide you with a specific amount but how to make sure that you are getting a fair and smart deal is something better for you to dwell on and Philkotse.com will help you with that.

1. Used cars - Why not?

Buying a used car is smart because it entails saving some cash, evading skyrocket depreciation and finding a diamond in the sea of used and second-hand cars. The challenge though in purchasing a used car is that there is more uncertainty when it comes to the prices and negotiations.

Comparing it to buying a brand new vehicle, there is very little wiggle room when it comes to price negotiations, and the prices are minimal and close to each other depending on the make, trim, and model of the car. Getting a fair and real deal is somewhat tricky when it comes to new cars.

Buying a used car is smart because it entails saving some cash

>>> Read more: How to do a used car check like a real dealer.

2. What to do when buying used cars?

When purchasing a used car, you need to exercise a little prudence and do a little math. According to one reliable internet resource, the run-of-the-mill prices of new and used cars have progressively been going uphill for the last five years.

Make a calculation

The average cost for a new car in the year 2017 went up to $36, 113 and up again from $33,525 about five years ago. Meanwhile, the average price of a used car increased from $16,900 to $19,400 during the same time frames.

Due to the market prices of brand new cars, more and more are opting to buy used cars instead. Every year, almost 40 million used-car units are sold. This number is double the statistics when it comes to the number of brand new car units that are being purchased.

Due to the market prices of brand new cars, more and more are opting to buy used cars instead

Now here comes a little math, an average midsize sedan out in the market with a selling price of $27,660 drops $7,419 in value during its first year. During its second year, it loses another $1,114 is worth.

When purchasing a used car, you need to exercise a little prudence and do a little math

Between its second and fourth years, it depreciates almost by $5,976 which is less than the total sum of depreciation sustained during its first year.

Bottom line, when you purchase a car that is about a year or two years old, it has already gone through its most significant value drop. The maximum depreciation that it can sustain is done and over with. As a buyer, this becomes leverage to ensure that you get a better and fairer deal on the selling price.

>>> Also check: Which used cars are best for first-time Filipino buyers?

Check the car condition

Aside from the drop on the value which dictates the price, as a potential buyer, you should also consider not just the age of the car but its overall condition. It is best to opt and make deals from a used car lot or even a private seller which will get you a lower price tag compared to dealerships.

Typically, the dealership would outright provide you with a more expensive option that would require a lot of negotiation and frustration.

As a potential buyer, you should also consider not just the age of the car but its overall condition

Similar to purchasing a new car, a second-hand car would still make you consider among many things your budget. How much can you honestly afford and willing to spend?

Although there is no hard-set rule for this, unless personally stated, smart and rational choices are best when finances are involved.

Take a second look at the price

It is best to take a second look of how much your net pay is and if the car will be paid in cash or out from a loan, including down payments and other related expenditures.

With a budget set, set the car of your choice, which is possibly the trickiest and hardest decision of all. This requires another consideration based on your needs and wants.

A further thought is needed again upon choosing the vehicle of your choice because you next have to evaluate the condition of the car.

The price should be commensurate to the condition of the car that you’re considering to buy: the car should justify the price tag.

With a budget set, set the car of your choice, which is possibly the trickiest and hardest decision of all

This is where careful evaluation on rust, dents and bends, chips and cracks, damage on whatever part needs to be added in before making a decision. Will the maintenance and repair costs double the expenses?

Take note that even if the car is already a year or two years old, you should still be able to use it for years to come. It should be an economical choice.

>>> Worth reading: Car buying tips: 5 simple steps to check the engine of a used car.

Take note that even if the car is already a year or two years old, you should still be able to use it for years to come

The last thing you want is suffering from a buyer’s remorse, knowing that you could have saved more in the long run by spending more on your used car.

3. Buying used cars - Yay or Nay?

Buying a used car is undoubtedly an accepted norm nowadays. It is a practical, reasonable and economical choice for a lot of people. Just bear in mind that even if you are not buying a new car does not mean that you have to be lax about the whole process.

Hard-earned money is still involved, and effort from you is always required. Going through initial bumps and disappointments is quite expected, whether buying a new or a used car.  

Buying a used car is undoubtedly an accepted norm nowadays

Don’t settle for anything that’s just being offered to you. Settle for what you want and bargain if the car justifies the price. Consider a long term commitment and not just a spur of the moment of wanting a car. Even if it just a used car, your choice should be one that fits your needs and suits your budget.