This page contains Hamilton Horizons' advice about buying a used car.

How to Buy a Used Car

Buying a car can be a frustrating and sometimes intimidating transaction. From choosing the right car to finding affordable financing –you are never sure if you’ve made the right decision. Plus, dealing with automobile dealers, experts in the field who are not typically looking out for anyone but themselves, can be frightening.

The first thing you need to do is figure out what kind of car to buy. Do you want a new or a used car? New cars can offer the advantage of factory warranties, new car smell and hopefully dependability. The problem is, most new cars lose $3,000 to $4,000 in value as soon as you drive them off the dealer’s lot.

Used cars purchased from dealers may carry a warranty as well, so that may be an option. Used cars from private sellers will likely be the cheapest option but you need to be cautious. It becomes a “buyer beware” situation. Cars which have been in hurricanes show up thousands of miles away sometimes. It would be wise to pull a vehicle history report like CarFax and to have a trusted mechanic who can inspect the vehicle before you take ownership. I have a mechanic who will check a used car for just $50. Find an independent, trustworthy mechanic in your area and stick with them.

You can find used vehicles online in your area using or so you don’t have to travel far to find the car you want. If you are going to purchase a vehicle through Craigslist, consider using a Police Safe Transaction Zone. You may also want to look into using an Independent Certified Auto Appraiser/Broker. Find one who charges a flat fee for their services and they may be able to find you the exact car you want while saving you thousands of dollars.

When you are trying to choose a car, you need to look at your budget. It’s not just the cost of the car itself you need to consider. You also need to consider the cost of insurance, maintenance and repairs. It is likely that these will cost more relative to the car’s cost. Making a sensible decision now about buying an affordable car for your budget that is also reliable, may save you aggravation later.

When shopping for car insurance, it is a good idea to talk to an honest broker with a reputable company or an honest broker who represents several companies and can find the best match for your needs. If you have assets such as a home, you may want to increase some coverages to protect them.

From a budgeting standpoint, even a brand new car requires maintenance and your budget should include funds set aside specifically for car maintenance and repair. Maintenance includes new battery, brakes, tires, oil changes and other normal wear and tear. Repairs, which will become more frequent as the car ages and miles build up, can become expensive so setting aside funds to cover potential repairs will provide peace-of-mind. If your car has 25k miles or less, you should set aside $25 a month; 50k miles or less, $50 a month, 75k or less, $75 a month, 100k or less, $100 a month and so on.

Do you currently own a car that you need to sell or trade in? If so, check the value. It’s more convenient to trade it in at a dealer but you could be walking away from thousands of dollars depending on the car. One member was going to trade her Honda Odyssey; the dealer was going to give her $3,300. Instead, she had the car detailed and placed an ad on She sold the car for $6,600. It took more effort but it was worth it for the additional money.

Car values are readily available online through, or You will need to know the make, model, year, mileage and any extras on the vehicle to get a true value. Don’t pay more for the car than the retail value unless it’s a collectible.

If you don’t have cash, you are able to finance a used vehicle whether for a private sale or buying from a dealer. Try to find financing before going to a used car dealer. Get pre-approved at a credit union if you can.

Used auto dealers are notorious for “spray & pray”. They give you to their Finance and Insurance Guy (F&I Guy). If your credit is not exemplary, they do what we call “spray & pray” sending your information to numerous financial institutions to see what comes back. Whichever FI will give the best rate, will likely get the loan but not before the “F&I Guy” adds one or two points to the rate for the dealer and himself to split. In the case of customers who don’t have good credit, they send the information out and each FI pulls a credit report which in turn decreases the borrower’s credit score even more.

Credit unions have great used auto rates. Many credit unions encourage pre-approvals before you start shopping. This way you will know how much you can borrow, your rate and payment before you shop. When you go to the dealer, you can tell them that it’s a cash deal. Credit unions are a great option and an alternative to using a bank. They are more accessible than ever. It used to be that you had to work for a specific company or union to open an account at a credit union but credit union membership is much more open now. You can find a credit union for you right here:

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Hamilton Horizons Federal Credit Union offers access to TruStage Insurance Services.  For more information, please call 609-631-4300 or toll-free 800-449-3221.

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