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Gem or Jalopy? 3 Ways To Make The Most of Your Loan and Avoid Getting Ripped-Off

Have you ever bought a used car only to wonder if you’re getting a good deal? And if your credit is less than perfect, you know you are already paying more in interest – so you want a good deal. You are not alone! Millions of people buy used cars every year. The average U.S. consumer spends about 12 percent or so on transportation per year – meaning the purchase of a car is a big commitment. However, buyers are often anxious about making such a large purchase without the knowledge of a car's history. Many wonder who really owned that car, how they drove and what’s really wrong with the car. Despite these concerns, used cars continue to sell, and with some effort, you too can find a good value.

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Take Advantage of the Thriving Used Car Market

The market for used cars is hotter than ever. As reported in Time, 2012 saw used car sales rise 5 percent to more than 40.5 million units sold. That’s compared to only 14.5 million new cars sold in the same year. The reason? It’s simple economics. With the economy growing at a snail’s pace, more and more people are watching every dollar they spend.

Where Are The Deals?

best cities for used carsSome people have it easier than others. Forbes list of the top 10 cities for used car prices shows places where the average price is below the national average. This report is based on data from the National Automobile Dealers Association (NADA) and CarGurus.com. People looking for the best deals can find them in Miami Florida, where the average price of a used car is 6.6 percent below the national average. This is followed by Cleveland OH and Rochester NY, both with average prices 5 percent or more below the national average. Whether or not you live in or near one of the cities doesn’t matter as much as following these tips and paying attention to the details.

#1: Know Where The Car Came From

where-cars-come-fromOne big concern for car buyers is knowing where the cars come from. The reality is most used cars come from people trading them in to buy a new car. In fact, 39 percent of all inventory comes from people trading in their cars to buy new ones. 24 percent comes from car auctions and 22 percent comes from trade-ins to buy other used cars. The rest? 9 percent is “other” and includes everything from repossessions to impounded cars. And finally the car from the little old lady? Individual sellers account of only 6 percent of the market. In other words, if you buy a can from a reputable dealer, your chances of getting a good car are better. However, the best deal might still be the neighbor who can’t drive anymore or the person down the street that just has too many cars and wants to get rid of one!

#2: Check The VIN Number

When looking for the best deal, always look at the Vehicle Identification Number (VIN Number) and make sure the car you are buying is what you think it is. know-your-vinThe VIN number will tell you where the car was made, who made it, what the engine type, model and body style are. The VIN number is the way a vehicle's history is recorded – even if you have to pay a few dollars, always review the car’s history before buying it. If the VIN number doesn’t match, look for another car. The car could have been totaled, flooded or damaged enough for someone to try and put a fake number on it.

#3: Find Cars With Only One Driver

get-a-great-dealLook for cars that only had one driver, like the one from the neighbor who can no longer drive. A car with only one previous driver is often a better value because there is a smaller chance that the car was driven aggressively. Low annual mileage per year should be considered, with less than 12,000 per year since the car was build being the ideal. An employee who turned in a company-maintained car or a seller moving overseas may be hard to find, but they are worth it.

More Tips: What Else To Look For

cars-to-avoidThe best way to get a good value is to pay attention and do your homework. Here are a few more things to look for:

1: Flood Cars

Check for flood-damaged cars. This guide from Pennsylvania’s Attorney General provides valuable information on what to look for.

2: Smoke

This one is simple. If you smell tobacco smoke or see signs that the lighter was used, then a smoker probably drove the car. If you don’t smoke or are allergic, avoid the car.

3: Leaks

Always look under the car for leaking fluid. This could be the result of many things, none of them which are free to fix.

4: Under The Oil Cap

Take a flashlight and look into the engine compartment under the oil cap. If you see clumps of oil, avoid the car.

5: Bodywork

If the doors or other body panels don’t seem to fit correctly, the car was damaged.

Take a look at the infographic and see all the things to look out for. Remember, a used car can be a great value and save you thousands of dollars. Good values are everywhere, as long as you do your homework first.

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