Category Archives: Buying a Used Car

used car keys in man's hand

Debunking Myths About Buying a Used Car

If you are thinking about buying a used car, there is a good chance you’ve heard that you are also buying the previous owner’s problems. People assume that purchasing a new vehicle is the best way to get a new set of wheels, but that just isn’t true. New cars come with a lot of financial baggage – frequently, they are marked up, come with expensive warranties that don’t cover much, and depreciate as soon as you drive off the lot. 

The truth is, a well kept and maintained Certified Pre-Owned vehicle can be just like a brand new car. Most of the time, you are unable to tell there was even a prior owner. 

Let’s “debunk” some of the most common myths and misconceptions about buying a used car.

5 Myths About Buying A Used Car

 1. Something is Wrong with the Car

Often, people believe that the vehicle must have something wrong with it because the previous owner didn’t want it. But that has nothing to do with the reliability of the car or its condition. 

People trade-in vehicles for a variety of reasons.

  • Upgrading to accommodate an expanding family
  • Downsizing to a small vehicle
  • Change the model to fit a lifestyle change
  • Lower costs

If you are concerned about the vehicle’s history, you can use the NCIB database to search the vehicle’s VIN and read about any damages or incidents to the car. 

2. Used Cars Don’t Have Important Safety Features

Unless you are purposefully buying an antique or historic car that is decades old, used cars for sale will typically have all the modern safety features like side airbags and anti-lock braking systems. 

Used car dealerships are mindful of this when deciding what cars to sell and know they won’t sell unsafe vehicles. To learn about the exact safety features of the vehicle you want to purchase, you can research the vehicle’s crash-worthiness, crash avoidance, and how it rates against other cars. The Insurance Institute for Highway Safety’s website lets you check ratings and vehicle safety by entering the make and model. 

3. A Used Car is Unreliable

The fact that a vehicle is pre-owned has very little to do with its reliability. People often trade-in vehicles because of a lifestyle change, not because the car had something wrong with it. Thanks to advancements in technologies and innovative designs, cars are built to last. Vehicles frequently surpass the 150,000-mile mark when well-maintained and serviced on schedule. If you are concerned about the vehicle’s overall reliability, have a trusted mechanic inspect it. Most dealerships have a licensed inspector on hand, but you may also bring your own. 

4. Used Car Sales Require Cash Offers

Purchasing any vehicle, new or used, in cash will certainly save you in interest payments, but it won’t get you a better deal. When it comes to financing a vehicle, buying a used car isn’t that different from a new car – your credit score and down payment will determine interest rates and monthly payments. 

Used dealerships don’t always demand cash upfront and are typically willing to help you get the vehicle you want. With new car buys, banks and finance companies need credit history and follow strict guidelines to determine if you are the right candidate for an auto loan. Used car dealerships provide their own finance options, and they are usually based on their own guidelines. Chances are, they will offer a more attractive alternative to help you get your dream car than a manufacturer or new car dealership. If you don’t have a great credit score, have bankruptcy filings, or foreclosures, pre-owned car dealerships are more equipped to help you navigate financing options and select a vehicle that best suits you. 

5. No Warranty Included

Again, this isn’t true. If you buy from an individual or private sale, you don’t get a warranty. However, most used dealerships provide a warranty of some kind. New vehicles usually come with a 3-year warranty, and if the owner decides to sell in that time, there is a leftover warranty on used vehicle inventory. On top of that, many dealerships provide a warranty of their own. Before purchasing a used vehicle, check with the dealership regarding any offers or warranty programs they offer. 

Once you realize that most beliefs about used cars are myths and misconceptions, you’ll see endless possibilities.

couple buying a used car at dealership

What Are Good Questions To Ask When Buying a Used Car From a Dealer?

When shopping for a good used car, one that looks good, and one that should serve my needs, there is a lot that I don’t know about it, but I would like to know. Learn more about some of the most frequently asked questions about buying a used car.

Questions to Ask When Buying a Used Car

  1. Is there a vehicle history report available like Carfax or Auto Check that will disclose any reported accidents or damage?
  2. Has the seller inspected the vehicle carefully? Is there any unreported damage?
  3. Does a vehicle history report show how much maintenance or normal repairs have been done?
  4. How many owners has this vehicle had?
  5. Has the required Maryland State Inspection been performed? 
  6. Did the State Inspection disclose any repair work that is needed but not done?
  7. How much life is left on the tires and brake linings?
  8. What kind of warranty comes with this vehicle?
  9. Can I purchase a vehicle service contract to protect me from any major breakdowns?
  10. If the vehicle is involved in a serious accident and is declared a total loss, will my insurance pay off my amount financed?
  11. Where did this vehicle come from?
  12. Is there any indication that a prior owner might have been a smoker?
  13. If this car is an auction purchase, was it sold with a green light or sold with any conditions?   

If you still have questions about buying a used car, contact our team at Trust Auto.

buy a used car

What is the Best Way to Buy a Used Car?

In truth, the best way to buy a used car is to purchase it from a friend, a relative, or a co-worker that you know well and trust. This way, you should have full access to the vehicle history. You can learn first hand about any accidents, breakdowns, major repairs, and how well was the vehicle maintained?

The great majority of buyers will research online for the year, make, and model to best suit their needs. Do not let price be the determining factor. The vehicle with the lowest price is probably low for a good reason. Price is important, but value and condition are much more important. 

Where is the vehicle (and the dealer) located? Is it 10 miles away or 100 miles? If you need to return the vehicle for a needed adjustment or repair, will it be convenient, or will it be a hassle?

The selection of the dealer is just as important as the car itself. Does the dealer have a good reputation? Does he have lots of positive reviews posted at third-party sites? Does he offer a large selection and convenient financing terms? Does the vehicle come with any warranty or extra benefits? How long has the dealer been in business?

All used cars and trucks are unique. There are no two that are exactly alike. One cannot assume anything about a used vehicle. You have to see it and drive it to make a good purchase decision. 

To learn more about buying a used car, contact the team at Trust Auto. Our professional sales team is here to help answer any questions you may have.

What Happens When You Trade in Your Car to a Dealer?

If a customer is in the market to purchase a new or used vehicle, he probably has a car or truck that he wants to trade in. While he may have surfed the net and completed his search about what vehicle to buy, what dealers to consider, prices and other concerns, there are several important steps that he should take to maximize the trade in allowance that his dealer will give him. 

Steps to Trade In Your Car

While the customer may not need to purchase a Carfax report on his own vehicle, the dealer most probably will. The customer must be aware of any reported accidents or damage, as the dealer will want to use that data to justify a low appraisal value. In this regard, the customer must be realistic in his expectations. 

There are several things that the customer can and should do to maximize the appraisal price. He should google his own vehicle to see what dealers are asking for comparable vehicles. The appraisal value quoted will not be the retail asking prices he sees online; rather he will receive a wholesale price- one much closer to the auction prices that the dealer might pay at a used car auction. And, that number will be further reduced by any mechanical, body, or appearance work the vehicle needs. In this regard, the customer should have the vehicle as clean and shiny as possible. Make it easy for the appraiser to like the car or truck. Don’t give him any reason to knock the trade in value. 

The appraiser will also be looking at prices online, both retail prices asked by other dealers, and wholesale activity for similar models. Again, his final appraisal price will be reduced by any reconditioning that is needed. If the customer has repair orders proving that the vehicle has been well maintained, and that all needed repairs were done, this should support a more favorable valuation.

Fixing a value on the trade in is just as important as fixing the value on the vehicle to be purchased. Most customers spend too much time worrying about the price to be paid for the new vehicle, and not enough time justifying the highest possible trade appraisal. 

The dealer will want to know if the customer has the title to his vehicle. If not, the dealer will call the bank or finance company to ascertain the unpaid balance on the auto loan. Any amount still owing will be subtracted from the appraisal. If the lien payoff is greater than the appraisal value, the customer will need to pay the overage.

If the customer has a vehicle service contract or extended warrantyon his vehicle that has not expired, he can request a cancellation of the contract and obtain a pro rata refund. If 80% of the time or mileage has expired, he should receive a 20% refund of the price he paid years ago. This would help meet his required down payment. The fact that he had a service contract or extended warranty will give the appraiser some confidence that the vehicle should be free of any major problems. 

Is It Hard To Sell A Car Privately?

If the purchaser of a new or used vehicle has a trade-in, he must decide whether to sell it privately or trade it in to the new or used car dealer. While the majority of customers will decide, for several good reasons, to trade their vehicle in, there are a number of people who will opt to sell privately. The subject of trade-ins is a large and complicated one. This blog will address some of the difficulties to be expected in a private sale. The benefits of trading in the old vehicle are detailed in a blog entitled “Advantages of Trading In Your Car” at Trust Auto in Sykesville, MD.

In order to conduct a successful sale of his old vehicle, there are several things that should be handled. The first challenge to the private seller is to try to determine the market value of his current vehicle – what is a reasonable asking price? For this he must perform some diligent research, looking at similar vehicles listed at dealer websites and third-party searchers like Google or CarGurus.  From the average asking prices he must subtract what it will cost to fully recondition the vehicle, both mechanically and cosmetically. A professional detailing job will take about four hours and cost $150 or more. 

Next he will need to prepare a VDP, or vehicle detail page, a full description of every aspect of his vehicle. The more information that is provided the better. Help the prospective buyer to better visualize the car or truck. Several good photos of the inside and the outside will be needed. If the seller is going to find a buyer, he will need to place a classified ad with one or more of the classified automotive listing services such as Kelley Blue Book, Edmunds, TrueCar and many others. These services cost money, and a prime location that offers better visibility can be expensive. The objective is to help a buyer looking for a particular vehicle be able to find the sellers car or truck, click on that vehicle, read about it, see the photos, and be interested enough to call or email the seller for more information. If and when they do communicate, the buyer will ask all the usual questions that he would ask a dealer. And, he will need to be satisfied with the answers, to the point that he is willing to visit, inspect and drive the vehicle. 

If the vehicle passes the buyers inspection and he wants to buy it, the parties must agree on the price and how it will be paid. In almost all cases, the seller should require payment in cash or certified check. The seller should limit his future liability by selling the vehicle “As Is”, with no written representation about the condition of the vehicle. Private buyers are notorious for failing to show up for an appointment. If they want to buy it, their first offer will usually be much lower than the asking price, so the seller must be prepared to negotiate. 

If and when agreement is reached, the seller will need to produce the ownership title. If there is a bank lien on the title, he must call the bank, request a payoff amount and instructions for processing the payoff and getting the title. This will take several days, and maybe longer. When the seller receives the title from the bank, he should complete the assignment, including the buyer’s information, and take the title to the DMV to complete the transfer. Until the DMV processes the name change, the seller remains liable for any loss caused by the vehicle. Therefore, all insurance coverage must be kept until the transfer is complete. Any delays will extend the sellers legal liability. 

If the seller has an extended warranty or vehicle service contract on his car or truck, this could greatly facilitate the sale. Most warranties and service contracts are transferable for a small fee, and this will give the buyer much more confidence in completing the purchase. This is one of the many benefits of buying a service contract from a dealer when the seller makes his new purchase. There are many reputable service contract providers today, and Trust Auto in Sykesville, MD, works with several of the leading companies.

Advantages of Trading in Your Car

Should I be Trading in My Car?

The majority of drivers who purchase a car or truck usually own another vehicle that they would like to dispose of. They’re faced with an important decision: should I trade in my current vehicle to a dealership or should I try to sell it myself? Despite the attractive benefits of private selling, in most cases the obvious and most convenient decision is to simply trade your vehicle in and accept the dealers’ trade in allowance.

We’ll be discussing, the pros & cons of selling your car privately in our next article Is It Hard To Sell A Car Privately?

Sales Tax Savings with Trade-ins

One of the greatest benefits of the trade in format, comes with how sales tax on your new purchase is calculated. Across most of the country, when you trade in a car to purchase a new one, you will get some sort of sales tax credit based on the value of your trade. What exactly does this mean? States which allow a sales tax credit for a trade-in, calculate the tax you will have to pay on the final purchase based on the cost after the value of the trade is subtracted from the cost of the new vehicle. For example, if you are buying a new car for $20,000 and the dealership offers you $8,000 for your trade-in, you will pay sales tax only on the $12,000 difference! The existence of a bank lien payoff has no effect on the sales tax calculation. Whether the trade-in is owned free and clear with no bank lien, or the lien payoff is thousands more than the actual value of the vehicle, the sales tax savings will be the same. Any lien, or no lien, has no effect on the sales tax savings.

If you owe more on your old bank loan than the vehicle is worth, this is considered to be “upside down” or have negative equity in your old car. If your credit status is strong enough, the lender who is financing the second purchase might agree to refinance the negative equity, in addition to the new car loan. This refinancing arrangement is only available if you trade in your old vehicle.

Less Hassle Trading in Your Car

When the customer trades his old vehicle, all of the DMV tasks are handled by the dealer. The transfer of ownership, the assignment of title, the lien payoff, obtaining new plates and surrendering the old plates, are all handled by the dealer. If the trade in is sold privately, most of the DMV tasks must be handled by the customer.

Bottom Line

Trading in the old vehicle gives the owner the convenience, the sales tax savings and the freedom from any hassles after the sale. The only real issue remaining is whether the trade in allowance is fair. If the dealer really wants the trade, then the customer might ask for a larger trade allowance. As the trade in allowance goes up, the sales tax savings also goes up, and the amount financed on the new vehicle goes down.

The bottom line really depends on the reasonableness and fairness of the trade in allowance. If the trade allowance is way below the lien payoff to the bank, or simply far below the advertised prices, the customer must make a tough decision.

Whether you’re trading in your car to buy a new on or just looking to get rid of your current vehicle, Trust Auto makes it quick and easy. We utilize a multitude of reputable third-party data to establish the true market value of your car and get you a fast, free appraisal. Afterwards, we review your vehicle on-site and give you an offer through our transparent assessment process. When drivers trade in their old vehicle for a new one at Trust Auto, you can do so with the confidence of knowing that you will always get the fairest offer for your trade.

What’s a “GOOD DEAL” for buying a car?

Elements of a Good Car Deal

Everyone wants a good deal on their next car. But what is a good deal when buying a car? Beauty is in the eye of the beholder, and a good deal depends on what you are looking for. Could the lowest price be a good deal? Maybe not. Could the highest price be a good deal? Maybe yes. It is not a simple answer. There are many variables; many moving parts.

If the price is the same, does that mean the cars are the same? Of course not. Every used car and truck is unique. There are no two that are exactly alike. The mileage, the optional equipment, the wear, and tear history (Who drove it?), and most important- the overall condition of the vehicle all have something to say about what really makes a “good deal”.

CarGurus Deal Rating

CarGurus defines a good deal as a price that is a little below the National Auto Dealers Association (NADA) average retail price for a vehicle. This is great to consider as a starting point when searching for a car, but you’ll also want to consider the overall condition, or how the vehicle was driven. Is the vehicle on its’ third set of tires and fourth set of brake linings? Was it driven by a sweet old lady or a frustrated 20-year old bruiser?

The more you know about your next vehicle, the more confidence you can have about a buying decision. That is why Trust Auto gives you a 360-degree overview of each vehicle. You will see the Maryland State Inspection Report, one of the most comprehensive in the US, and far better than Virginia or Pennsylvania. You will see the Carfax report of any accidents, damage, and all reported repair orders. You will see the pricing of comparable vehicles from the most respected sources in the US – Kelley Blue Book, NADA, Edmunds, and others.

At Trust Auto, we want to make buying a car painless, with no regrets and no second-guessing. You can purchase with the confidence of knowing that you did everything necessary to make a good buying decision.

New Year, Used Car: The Best Time to Buy a Pre-Owned Vehicle

It’s no secret that the best time to shop for a new car is between Black Friday and New Year’s Day. But what about a used car? A brand new car may not be what you are looking for – whether you need a second car for your family, a car for a new driver, a work truck, or something that you can use as a commuter vehicle – sometimes pre-owned cars are the way to go.

It may seem like a stretch to spend a large amount of money right after the holidays, but January is the best month to buy used vehicles. And here’s why:

Strong December Sales

Many new car dealerships run great specials on vehicles in December to make room for new-year inventory. This means they have a lot of used vehicles on their lot that they want to sell.  In order to make room for new cars, these dealerships will likely have the used cars on excellent sales and provide low prices with attractive financing.

Given that over 1/2 of new car sales involve a trade-in and resale takes an average of 45 days, dealerships will be eager to get used vehicles off their lot, meaning the buyer has the upper hand in negotiating deals and better prices.

Slow Retail Month

After the holidays and going on spending sprees, many people tighten their wallets in the new year. People use what extra money they do have (after paying off credit card bills and debts) towards less frivolous things.

However, car dealerships still have to make money and meet sales quotas. This means one things: A buyer’s market. Dealerships and salespeople are eager to close deals and make sales, making January a great time to negotiate a better deal. This will even extend into February and even March, until people have paid off their debts and reenter the retail world.

Leased Vehicles Ready for Resale

Many people lease cars at the end & beginning of the year, which means many 3-year-old vehicles are available for resale in January. These vehicles are generally in great condition and will be “restored” to like-new condition. Since the mileage is lower than many used cars, you can find a steal – a newer model with low mileage for an exceptional price.

Luxury Deals

If you are shopping for a sports car or luxury model, chances are, you’ll land the best deal during the winter months. There is little supply-and-demand for sporty little cars with convertible tops or flashy little cars no suitable for harsh winter roads, which means you will likely get your pick of the best luxury vehicles for a much lower price than if you wait for the weather to get warmer.

Typically the more expensive cars on the lot, come January, these sporty little models suddenly drop in price and become more reasonably priced and the best deals out there.

Another Year Older

When the clock strikes midnight on New Year’s Eve, used vehicles suddenly become one year older meaning their value drops, and sometimes that drop is significant. For instance, Edmunds says the typical 2009 model sold for $19,392 in December 2012, but $18,738 in January 2013 – a 3.4% price drop in just one month.

This is true for models that are only 1 or 2 years old as well – you can find an “old” model that is just 2 years old, and in most cases, it will be in mint condition with just some miles put on.  For this upcoming January, look into 2017 models instead of a 2018 model and you’ll be shocked at how low the price is compared to it’s 2019 counterpart.

Shop Around for Financing Deals

Oftentimes, the finance deal the dealership will offer you isn’t the best you can find – especially in the new year.  A lot of banks, credit unions, and regional banks will offer financing incentives in the new year for existing customers. Contact your bank to see what deals they are offering and if you qualify for low interest rates. There may be discounts available if you enroll in auto-pay or use an existing bank account for the monthly payments.

Before settling on a pre-owned vehicle, be sure to look up what the MSRP was for the vehicle originally, and if there is any resale information. This can help you negotiate prices and deals in the long run. The most important thing to keep in mind is to have a set price that you cannot go over. No matter how great a deal, if the deal is more than you are able to spend, it’s not worth it.  Never overspend just because a dealership is pressuring you to sign a deal to help them meet their quota.  Keep shopping around – you will find the best deal for you!

 

Why December is the Best Time to Buy A Car

There are arguably a few different times throughout the year that are ideal for buying a car. But December is the best time to buy a car.

It’s enough that dealerships are generally emptier during the holidays due to people traveling, but sales teams have looming quotas to meet before the year’s end. To put it simply, they want cars out the door. And the best way to do this is to run unbeatable deals.

In fact, consumers can expect to get almost 8% off MSRP values when buying a car in December as opposed to waiting until January.

Like any big purchase, it’s important to do your research before you buy a car, so do your research (and maybe even test drive a few) during the fall. This will give you plenty of time to decide what make, model, and trim options you want in your dream vehicle. But when it comes to making a purchase? Pull the trigger between Black Friday and New Year’s Eve.

Here are just a few reasons why December is the best time to purchase a car:

Better Leverage (& Negotiating)

Dealerships tend to be slower during the winter months, so in order for the sales team to meet their quotas, they will be desperate to get cars out the door and on the road. This means you, the buyer, will have better leverage to get a great deal on the vehicle you desire. Take advantage of an empty dealership to ask lots of questions and get in-depth about the car’s features, amenities, safety ratings, and when it comes down to price, don’t be afraid to haggle.

Making Space for Newer Models

October, November, and December see a lot of new makes and models come onto the scene in preparation for the new year. But this means the old inventory has to find a new home so there’s room on the lot. Meaning… prices will drop. If you are shopping for a car, instead of buying a 2019 model, look at 2018 models instead. The prices will be significantly lower because they aren’t the newest model on the market anymore. But December is when the prices hit the lowest – the longer a car sits on the lot unsold, the lower the price drops.

Peace of Mind

You may not think about this when you are purchasing a vehicle right away, but have a safe and reliable vehicle can bring you a lot of comfort during the winter months when road conditions are treacherous. Having a vehicle with new tires, top-notch breaking capabilities, and updated technology can give you more confidence when you are driving on slick and snowy roads.

Holiday Bonuses

Everyone loves a little extra cash for a holiday bonus. Why not out it to use and put it towards a down payment on a vehicle.  If you can put down a higher percentage, you will be able to get a better interest rate, or better yet, if you can pay with cash, there’s a huge chance you can talk down the price even further!

If you’ve been dreaming of a new car, now is the time.  This is the best time to buy a car, so put your haggling skills to use and be prepared to get the best prices on the market!

Why August is the Best Time for Car Buying

Traditionally, when you ask someone when they the best time to buy a car is, they’ll tell you December. It’s common that automakers will offer end-of-year deals and incentives to boost sales for the final quarter.  But what is less known is that there are also incentives to purchasing a vehicle in August.

Historically, August has shown to have the lowest transaction price of the year (a 2.4% decrease versus the average).  The end of summer is when dealers are trying to clear out their aging inventory to make room for new inventory. With such a large volume of vehicles passing through car lots and showrooms, dealers can offer a great flexibility in price in August.  

Back-to-School Car Buying

For growing families, back-to-school time means carpool, soccer practice, and hauling kids around to after-school activities.  As kids get older and bigger, it only makes sense to invest into a larger vehicle that will fit a growing family.

Other families may decide that back-to-school time is a good time of year to buy a safe, reliable car for the new driver in their family or to a child who just got their learner’s permit.  Families may also decide that their new graduate needs a vehicle before heading off to college, so cars with good fuel efficiency, bluetooth capabilities, and navigation are in high demand.  

Image result for buying a car

Regardless of the situation, August is a peak time for families who are looking to buy cars. Automakers and dealerships can be motivated by the year end change to move their existing inventory.  

Model Year End Car Buying

With the new year inventory starting in October, many dealerships clear out their older models to make room for their new year models.  So in order to make room, they want to offer great deals to customers. Buying a car in August will allow you to take advantage of the specials that dealerships are running while there is still a good amount of current-year models available.  

SUV Deals

Families and buyers interested in SUVs are in luck if they purchase in August. On average, SUV prices are lower than any other month of the year.  Customers who have been holding out for better pricing will see the best options and availability for savings during this time.

Related image

August offers historically high buyer incentives, great discounts, and larger prices drops than other months. Also keep in mind that purchasing a vehicle in the beginning of the month can result in a 1.3% decrease in price or an average of $390 in savings, compared to the rest of the month.  If you find a dealership that is open on Sundays – go then! The largest decrease in average transaction price occurs on Sundays – averaging 4.6% or $1,402 in savings.

Happy Car Buying!