It’s an interesting time to be in the market for a new vehicle. The world is still recovering from international supply chain issues—specifically, the current global shortage of microchips needed to produce all new cars. As a result of the shortage, manufacturers produced 1.7 million fewer vehicles in 2021 than in 2019.
This vehicle shortage has resulted in a top-to-bottom shift in the auto industry, and some used cars are worth more now than when they were brand new. As a consumer, you are now faced with a mountain of questions to ask before buying a car. Knowing where to begin might be difficult, but we’re here to point you in the right direction.
Questions to Ask Before Buying a Used Car
What Matters to You?
With high demand and low supply, formulating the right questions to ask before buying a car is critical. Knowing what matters most to you in your vehicle of choice will save time and money as a consumer.
One benefit to seeking a used car today is the modern safety features. Things like automatic emergency braking (AEB) with pedestrian detection, Blind-spot Warning (BSW), Lane-departure warning (LDW), and Heads-Up Display (HUD) for speed and remaining gas are now standard. The newer the vehicle, the more advanced the bells and whistles. With a limited selection, you might not be able to find a car with everything in your wish list, so you’ll need to decide which features are essential to you.
With the auto industry being a seller’s market now, another factor to consider is reliability. Buying a car will always be a serious investment that you shouldn’t take lightly. You don’t want to purchase a used car only for it to break down in less than a year. Narrowing the focus to specific models with proven reliability will benefit you more in the long run.
After two years of this chip shortage, the depreciation value of cars has significantly slowed. At the height of the pandemic, the average depreciation rate was 49.1%. In 2022, the rate has dropped to a shocking 40.1%, with no sign of reversing anytime soon. This is your opportunity to find great value in cars between three and five years old because they’ll still be worth close to what they were out of the factory. You don’t want to get caught in a negative equity net when choosing an older model.
What is Your Budget Like?
The average cost of a used car in 2022 can reach as high as $27,000. If you don’t have a budget in mind already, you’ll need to build one. Examine your finances and compare loan offers with different banks and dealerships.
Once you’ve determined your budget, you must stand firm on that amount. Your best bet is to consider cost-saving decisions. Try buying out the car you’re currently leasing—you’ll save time on a vehicle you know is in good condition, the cost will be below market price, and you won’t have to sacrifice creature comforts you’ve grown accustomed to.
Do You know What You’re Buying?
You can never be “too” careful when taking on the financial burden of a car payment. Remember, anything wrong with the vehicle will be your problem after driving it off the lot. Here are a few ways to avoid this:
The buyer’s guide is one of the essential tools at your disposal when purchasing a used car. It’s a written document detailing all information about the vehicle. A seller must legally provide you with a buyer’s guide, which will help inform you.
We recommend that you consider a mechanical inspection of any car before you buy it. You can pay an average cost of around $159.99 to have a third-party mechanic inspect the vehicle.
Since it will be your finances on the line with this used car, knowing the vehicle history should be non-negotiable. You want to know when and where the vehicle was inspected, repaired, restored, or damaged. The best way you can do that is through service documents. Always ask to see papers before committing.
Are There Any Red Flags?
When buying a used car, beware of red flags. For example, if your seller won’t allow you to perform a test drive on the freeway or prevents you from driving at a certain speed, odds are the car has damage they’re trying to hide. This will be confirmed if they won’t show you service records.
Ask About CarRx
Before buying a used car, one of the most valuable questions to ask the seller is whether or not the vehicle is equipped with Elo GPS with CarRx.
CarRx is an integrated vehicle maintenance software solution designed to help you stay on top of your vehicle’s health. With critical maintenance alerts, full diagnostic scans, and simplified information, CarRx provides drivers a window into the inner workings of their vehicles. To find out more about purchasing a vehicle with Elo GPS and CarRx, contact our team of experts.