Between financial and practical considerations, buying a car is a process, and one that many people struggle with. There’s a right way and a wrong way to go about buying a used vehicle. Let’s consider Bill’s experience.
Bill had $8,000 to spend on a new vehicle. Looking for a family friendly minivan, he found a 2011 Chrysler Town and Country for $7,500. Done and done–Bill has a new vehicle!
About six months later, Bill is having trouble. There is a tapping noise coming from the engine that has gotten worse, and now the engine feels rough, and the check engine light flashes. Bill is getting nervous but remembers that his friend (who used to be a mechanic) went with him to check out the vehicle. Yes, there was a little bit of tap noise back then, but his friend said, “That’s probably just a lifter, Bill. I wouldn’t worry about it too much.” The seller overhears this and says, “Just in case you’ll have to get that fixed, let’s knock $700 off the price.” Thus an $8,200 Town and Country van becomes a $7,500 van.
Bill takes his van to a mechanic. It’s Bill’s first time at this particular shop and his first time having this “new to him” vehicle looked at. Bill learns that his engine needs much more than a lifter. In reality, he’s experiencing a failure with one of the cylinder heads on his Chrysler 3.6L engine. To have the problem addressed correctly, Bill is facing an engine repair and service bill of over $3,000.
But there’s more to the story. The mechanic tasked with evaluating the problem has noticed a few other things about the van. A couple tires are worn close to the wear bars. A front suspension strut is leaking. Not only that, one of those tires did not wear evenly which means there is an alignment problem. But is the vehicle ready for an alignment or will it need a faulty suspension or steering part replaced first?
In the course of six months, Bill has gone from buying a running, driving vehicle for $7,500 to facing over $5,000 in service costs: simply in pursuit of a safe, reliable vehicle. In Florida’s hot climate, if the a/c on this 12 year old vehicle goes out within the next year, Bill will face yet another bill to deal with that.
About six months later Bill is experiencing problems. The brakes have begun to grind, occasionally the vehicle “clicks” without starting, and the vehicle moans every time it is steered to the left. He brings his vehicle to the mechanic–it’s Bill’s first time at this particular shop and the first time he’s had this new-to-him vehicle looked at. He learns that he’s worn down a brake pad, which is grinding against the brake rotor; the engine starter is failing intermittently, and the right front wheel bearing is moaning. Bill gets an estimate for $1,800 in repairs. Not realizing that these are common repairs done at his vehicle’s mileage, he feels like he’s made a mistake buying this vehicle and is unsure if that much money really needs to be spent.
Let’s consider if Bill took a different course of action. Before even looking at vehicles, he talks with his mechanic with whom he has an established relationship. He tells him that his top budget is $10,000 and the mechanic tells him to look for a vehicle that is around $7,000-$8,000 and expects that the vehicle will need $2,000-$3,000 worth of work in the first year. Together they determine that he should be looking for a Toyota Sienna or a Honda Odyssey. When he finds a couple options, he sends the VIN over to his mechanic and gets a positive report about both. Based on price, he decides to have one of them inspected. The inspection brings up some concerns, so he decides to look at the other one instead. The second vehicle’s inspection comes back with a positive report. The vehicle’s selling price was $7,500 and the inspection indicates that he should plan on spending about $2,500 in the first year to catch up on some maintenance and do some repairs. Bill feels good about his purchase. However, the mechanic also advises Bill to save $200/month toward future repairs and maintenance: “It’s not a matter of if this van will need work; it’s a matter of when. Let’s keep you out of car payment territory.” Bill’s new to him but used van will need work in the future, but now he’s prepared.
Buying a car is one of the most expensive, necessary decisions we make. A vehicle is a purchase most people want to hold onto for many years, and for long term cost effectiveness, we encourage this viewpoint. What kind of vehicle should I look for? How do I know I’m getting a fair deal? How do I know the vehicle isn’t going to give me trouble? Do I purchase from a dealer or a private party? I’d like to help ease your mind a little when making such an important decision.
In this five part series, I will address the following questions:
Part 1: What should the overall process look like from start to finish?
Part 2: How much should I expect to spend?
Part 3: What makes and models should I be looking at?
Part 4: Where should I buy a used vehicle?
Part 5: Why should I get a pre-purchase inspection?
Most buyers want practical, economical, and reliable transportation. We realize that there are those whose idea of the perfect vehicle goes beyond that mindset, and there’s nothing wrong with that. I think you will still find helpful advice in these articles. However, the bulk of our clientele are looking for affordable, dependable transportation, so I am writing through that lens.
How do I navigate the process of buying a used vehicle?
To make the best decision in buying a vehicle, there is an effective process to follow. First you need a realistic budget. Second, decide what vehicle you want and where you will shop. Finally, and most importantly, you must have the vehicle inspected. Working alongside a trusted mechanic throughout the process will help you end up with a great vehicle.
1. Determine the vehicle’s overall cost
What year, make, model, and mileage you are looking for depends on your budget, but you need to look past the price tag of the vehicle.
It costs some money to maintain used vehicles. It’s not a matter of if those dollars will have to be spent; it’s a matter of when. A quality used vehicle should cost you an average of about $150 per month (this may vary depending on vehicle type and the part of the country where you live) in maintenance and repairs over the course of a year to maintain reliability, safety, and comfort. This cost is a lot less than a monthly car payment and will cover the majority of the vehicle’s needs.Yes, it starts and runs and drives, but is it safe? Is it comfortable? Is it reliable? Does it have a small problem that you have no problem fixing now that will grow into a big problem, if it’s not addressed, that will cause you to think about getting rid of the car?
Maintenance not only includes items listed on your manufacturer’s maintenance schedule, but also parts that break down due to age, such as the A/C system and the brakes. Accept the inevitability that, just as a human body suffers the effects of aging, sooner or later something on your vehicle will break.
If you finance a newer vehicle, you also have the monthly payment to consider. If you buy an older vehicle that wasn’t maintained well, you need to account for catching up on maintenance and repairs in your monthly average. (For more information on ownership costs, check out this blog post.) This is why it’s really important to have a pre-purchase inspection done prior to buying the vehicle. (I will discuss pre-purchase inspections in part five of this series.)
As we looked at with Bill’s example, your purchase price should not take up your whole budget. You can get a quality vehicle for $8,000-$12,000 purchase price (on the low end) and you may need to put $2,000-$3,000 for maintenance and repairs in the first year. That means a reasonable overall budget is $10,000-$15,000 minimum. Remember that maintaining the above standards can average around $150/month, so if the car you’re buying is behind on upkeep, a lower purchase price may mean more money in service work.
Generally, the less the purchase price, the more you need to plan to put into maintenance and repairs. This is why it’s important to have a good relationship with a mechanic you trust to help you make this decision.
For more information on setting the right budget for you, see part two of this series.
2. What kind of vehicle fits your lifestyle?
For first time car buyers, knowing what make and model to look for can be overwhelming. A great place to start deciding what make and model to look for is asking yourself what your main use of the vehicle will be.
- City driving?
- Country driving?
- Freeway driving?
- Mainly home to work?
- Driving kids around?
- Frequent long trips?
- Carrying a lot of cargo?
Sedans and Five Doors
If your main goal is to get from point A to point B with four or less passengers, this is all you need. If you will occasionally need to tote some extra cargo, you might be surprised by how much you can fit in a small but well-packaged 5-door vehicle (like a Honda Fit.).
SUVs
If you find you need a little more space, an SUV might be a good option for you. Maybe if you take frequent road trips with lots of luggage or you regularly carry lots of cargo for your job, you might find that the extra storage space in the rear will be an asset. If you are packing in the passengers and all of their stuff, you may want to look at a full sized SUV. Finally, if you live in a cold-weather area or do a lot of off-road driving, a four wheel drive SUV might be just what you need. Bear in mind that larger vehicles cost more to maintain. Depending on how much cargo you’re carrying, you might do just fine with a well-packaged small SUV.
Trucks
If you regularly find yourself hauling stuff more than people, a small truck might be the perfect vehicle for you. I’ve known people who own a truck because they like to help others. There is simply no substitute for the ease of use and utility of a truck bed. Medium to large size trucks are also available with extra cabin space for passengers as well as the utility of a truck bed.
Keep in mind that larger vehicles can cost a little more to maintain.
Minivan
Known by many as the “soccer mom” vehicle, these are really practical vehicles to own for driving around a larger number of passengers, and not just kids. Vans are also great for families that like to take trips as well as people who just really like going places with lots of friends. In many cases, this is a great alternative to a full-sized SUV. If you are a “soccer mom” you may love having one, and even if you’re not, you might find one in a body style that you like!
See part three of this series for specifics of what to look for and our top picks for each of these categories.
3. Searching for the right vehicle.
Once you know what vehicle you are looking for and what your budget is, it is time to begin your search. Will you purchase from a private party or a dealership? Shop online or in person? Do you want firm pricing or room to negotiate? Can you get the vehicle inspected first?
Sometimes, buying from a private party will save you money because there’s no overhead involved. However, dealerships commonly provide the convenience of assisting with titles and tags.
If you want the vehicle inspected before purchasing, you may have to buy from a private party, but the sale will likely be “as is.” While a dealer may not allow a pre-purchase inspection, you may have a return window available to have the car inspected, then return it if unsatisfactory.
For pros and cons of these options, see part four of this blog series.
4. The pre-purchase inspection.
As mentioned previously, this is the most important step of buying a used vehicle. If done by a skilled and trustworthy shop, a pre-purchase inspection can tell you how much work is needed to bring a vehicle up to par. This helps you know if that vehicle will fit your budget. As I said in part 2 of this series, what you don’t want to do is max your budget on buying the vehicle only to find out that it needs a lot of work.
The inspection also gives you a look at where the vehicle has been and where it’s headed. Two vehicles may look identical but vary by thousands of dollars in costs to purchase, fix-up, and maintain. Vehicle condition can vary greatly depending on usage, mileage, and service history.
Since inspections take time and cost money, it’s a good idea to start with a conversation with your mechanic. If you trust your mechanic, ask them for opinions. They may encourage you to follow up on a couple vehicles you’re interested in and lean away from a couple others.
Our pre-purchase inspections tell our clients how much work will have to be done to get the vehicle up to par. This also gives them an idea of how well the vehicle was maintained and how much work and money it will take to handle future maintenance and repairs.
If you are buying the vehicle from an independent party, there shouldn’t be a problem with getting the vehicle inspected. If they resist, you might want to reconsider or refuse the purchase.
If you are buying from a used car dealer, most often they will not let you bring the vehicle to your mechanic prior to purchase. While they might inspect all of their vehicles, we’re not convinced it’s always to a quality standard and the dealer won’t tell you what maintenance and repairs you should expect in the first year or so of your purchase. While not all dealers are going to cut corners, you need to keep in mind that their main focus is to sell vehicles. That said, ask the dealer about their return policy. If there is one, it’s usually three to seven days.
Once you’ve decided on a vehicle, schedule an inspection with your mechanic before buying the vehicle so that you can be confident you won’t miss the return window. Then, if the inspection turns up something undesirable, you still have time to change your mind.
For more information on pre-purchase inspections, see part five of this series.
Key take-aways:
- Leave room in your budget for maintenance and repairs
- Know what makes and models best suit your needs
- Get the vehicle inspected, ideally before buying
- If buying from a used car dealer, schedule an inspection before buying the car so you don’t miss the return window
Are you ready to start this process? Check out the rest of this blog series for more details:
Part 2: How much should I expect to spend?
Part 3: What makes and models should I be looking at?
Part 4: Where should I buy a used vehicle?
Part 5: Why should I get a pre-purchase inspection?
Marinelli Auto Service is an auto repair shop in Winter Park, Florida. We’ve been serving Central Florida since 2015. We provide maintenance and repairs for a variety of makes and models.