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Want to get taken to cleaners? Then consider buying a used car from a dealer. Even certified dealers will swipe the last dime from your pocket book. I am not trying to be hateful here, but I have a friend that was a car salesman for a year or two, and he told that they go for every last dime they can. They try to sell you on “Intergalactic Personal Car Protection” and a whole mess of other baloney add-ons that just boost their profits, not adding any real value. They will also go for the highest interest rate possible when providing financing for you. I am going to give you a few tips when looking to buy a used car:

1. If at all possible, use cash.
   This is the most beneficial tip I can provide. If you use cash, you will be able to get the best bottom line price, and can more easily turn down all the baloney add-ons. Be sure to get the title in hand when paying cash.
2. If you are going to finance a car, don’t use the dealer’s financing options.
   Again, the dealer is not your friend, they are trying to milk you for the most money possible. Look at the rate and terms they provide, and compare them to quotations you have already obtained from your bank or other lender. Use the power of “NO” when dealing with a salesman. If they tell you they can’t give you the price you want on the car unless you finance with them, just say no. You will almost always be able to work a better financing deal if you go through your own channels outside of the dealer.
3. Get some kind of guarantee or warranty.
   Get the longest, highest grade warranty possible. Cars break down, especially used cars, and even more so used cars that are sold from a dealer or third party. Getting the longest warranty possible will guard you against major repairs that will eat your budget’s lunch.
4. Have a mechanic friend checkout the vehicle before purchase.
   This is immensely important when buying from an individual seller. This kind of person usually has a reason for selling the car, and that reason is almost always because it breaks down a lot, and they want to dump it, and get a better car that won’t have so many problems. This means many times you will be getting a lemon. Almost every time that I have bought a used car from an individual seller, I have been forced to make substantial repairs, almost immediately after buying. Get the advice from someone who knows about cars, I can’t stress that enough.

Bottom line, use common sense. Get estimates on interest rates, maturities and other terms from several different lenders before making your choice. Avoid dealer financing if possible. If it were me and I had to finance a car, I would not finance it for more than 5 years (60 months). The depreciation on the vehicle will outdo the loan before you are finished paying on maturities that are longer than 5 years. And if you ever needed to sell the car, you definitely don’t want to be in a negative equity position.

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