The cost of buying a secondhand car has increased dramatically over the past several years.
But as to the car website Edmunds, these costs are finally beginning to decline.
On the website, consumers might find six suggestions for getting the most out of their next used automobile purchase.
Due to increased pricing, a decrease in inventory, and an increase in loan rates, purchasing a used car has been difficult in recent years. It’s reasonable to argue that the market has been depressing in comparison to what consumers typically anticipate to pay when purchasing used. But based on the most recent Used Vehicle Report from Edmunds, there appears to be at least a glimmer of hope.
According to Edmunds, the third-quarter average transaction price for a used car was $28,935 on average. That has decreased from the record high of previous year, but it is still far above the average of $20,085 from roughly five years ago.
Furthermore, the cost of new cars is also rising, which makes used cars more alluring to consumers on a tighter budget. In general, the average price differential between new and used is back to its levels in 2019.
Nevertheless, potential buyers of used cars should still make sure they’re receiving the greatest deal possible. Edmunds specialists have put together six crucial pointers to assist you in making your next purchase.
1. Evaluate costs to prevent overspending
It’s not as difficult as you would think to determine whether you’re getting a decent deal on a used car. Numerous websites, such as Edmunds, allow you to compare the price of the car you’re interested in with those of other vehicles that are up for sale nearby. You may find out if you are paying more, less, or the vehicle’s market value by just searching for the make and model you want.
2. Extend your lookup
If you look beyond your neighborhood dealerships, you might be able to discover a better offer. Check out internet websites to see what inventory local dealerships offer before making the drive there. You can change the search parameters to look for better bargains in the adjacent counties and cities.
3. Take into account other car models
You may wish to reevaluate your regular strategy if you have a specific brand, age, and mileage in mind when purchasing a used car. Choosing an older or higher mileage vehicle will help you reach your desired monthly payment even in the face of rising prices and interest rates.
If you do choose to do so, though, be sure to obtain a vehicle history report to make sure the car has a clear title and has had routine maintenance performed. A mechanic’s prepurchase examination might also be helpful in identifying possible problems.
To save money, think about getting a different kind of car or brand if you want a nearly-new one. Due to their popularity, trucks and SUVs are frequently more expensive than sedans or small SUVs. Purchasing something smaller can save you a significant amount of money if you don’t require a truck or large SUV.
4. Obtain a loan preapproval.
Securing the most affordable interest rate will result in reduced monthly installments. Prior to visiting the dealership, be preapproved by a nearby bank, credit union, or online lender rather than relying solely on the dealership’s assurance that it is providing the best rate. Next, evaluate each rate to make sure you’re receiving the best deal. Should rates go down in the future and you’re not satisfied with the rate you were offered, you may be able to refinance the loan.
5. Get the most out of your trade-in
If you own an equity-financed car, wonderful news awaits you. Even while the cost of used cars is still high, you should still be able to get a better deal, which will help you offset the increased cost of buying your next automobile. Before accepting a trade-in offer from your dealership, acquire a free car evaluation from websites like Edmunds to make sure you’re getting a fair price. To obtain the desired monthly payment, think about making a larger down payment if there is no equity or trade-in.
6. Examine approved pre-owned
In today’s market, finding certified pre-owned cars may be more difficult, but if you discover one that fits within your budget, we strongly advise taking it. Pre-owned cars not only come with longer warranties, extensive inspections, and extra reconditioning, but they may also be eligible for finance rates that are comparable to those on new cars.
Despite the higher initial cost, these cars may end up costing less in the long run because of the extended warranty and cheaper loan rate. Says Edmunds
In 2023 and 2024, most used-car buyers will find it more challenging to get the deal they want. You can feel much better about your purchase, though, if you are willing to make a few concessions regarding the kind of car you desire, find out how much your trade-in is worth, and compare local and interest rates.
The car website Edmunds supplied information for this story to The Associated Press.