Used Car Buying

Used cars are less expensive to own because the previous owner(s) absorbed much of the depreciation. However, they usually need more repairs because of their age and condition.  Experts recommend that monthly consumer debt, including loan payments on a car, should not exceed 15 percent to 20 percent of net income. You’ll also need money for maintenance, insurance, and operating expenses.

Buy ‘New Used’

• Consider buying a “new used” two- to three-year-old car instead of a brand-new one. Many late model used cars cost 30 percent to 40 percent less than new models because cars depreciate the most during the first three years.
• Some newer cars may even have the remainder of the original manufacturer’s warranty or a new extended warranty provided by the dealer.
• Inquire about the history of “factory certified” or “dealer certified” cars, which are supposed to be inspected for defects and restored to a “like new” condition. The quality of this service varies from car to car.
repurchasing costs.

Beware Private Owners

• Beware of used cars sold by private owners. Consumer Reports magazine recommends only buying used cars with a good history of reliability from private sellers. This information can be found in its annual April car-buying issue.
• Private sellers often charge less than dealerships but car dealers may offer warranties and repair plans.
• Generally, private sales between individuals are on an “as is” basis. Ask the owner for available maintenance records and take any car being considered for a test drive.
• It also may be worth it to pay a mechanic $50 to $100 to do a professional inspection for possible defects.