Buying a Used Car – Setting your budget

Buying a Used Car - Golf GTI

When looking at cars for sale there are a number of steps to follow. The first is deciding how much you want to pay for it along with your overall budget. If you have a car to trade in or sell, you need to find out how much it is worth. If you can sell it privately then you are likely to get more for it than trading it in at a dealer, though the former takes considerably more effort. You can get an idea of its value by looking online at the prices of cars in similar condition to yours.

Are you going to pay for your next used car with cash, a loan from your bank, or a car loan? If you are seeking to finance your purchase through either of the second two options then it pays to shop around as the interest rates vary considerably. If you have a good credit rating, you might be able to take out a loan from your bank at an interest rate of under 8%, but if not then expect to have to pay considerably more; car loan providers can charge 16% or even more.

There is far more to the cost of a used car than its purchase price. With the current cost of fuel the relative costs of driving an economic car and a gas guzzler are quite considerable. You need to work these out for the mileage that you will cover in say the next year. Also there is a difference in road tax charged for cars with different emission levels so you need to check those out too.

Insurance costs are continually increasing and if you are a young driver you will find that the cost of insuring a higher performance car such as a Golf GTi will be much more than insuring a basic Ford Fiesta.
Going through all these stages might seem somewhat of a chore, but it is worth it in the long run.

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3 Responses to “Buying a Used Car – Setting your budget”

  1. yuwin says:

    Another thing that can come in consideration would be the depreciation value of the vehicle, you should always check the vehicles depreciation value either by referring to the banks or insurance agent to ensure, that you buy the vehicle at the right price during that time. Avoid buying cars during the last two months of the year, as the value will further depreciate on the following year to come which is a very short time period thus making you overpaying and making losses.

  2. Natali says:

    Nice info. I am the one looking for a second hand car now a days. I lost my job last year and to meet certain expenses I had to sell my brand new two month old Volkswagen. Now when I have recovered from debts I want to start by looking up for a used car. Was looking for cars when landed to this page and it really helped me. I am sure suggested points are gonna help me in some or the other way.

  3. Mike Fischer says:

    Thanks for sharing. Its is necessary to set you budget and also locate the right dealer. Do some research work on the car you are interested in as far as its history is concerned. Trust me used cars can be a real good deal if you do all the necessary inspections.
    Twitter: @unocardealers

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