A Car Salesman's Secrets to Buying a Used Car

Buying a used car is a big decision, full of pitfalls that will cost you time and money. From a former car salesman, here are the biggest mistakes car buyers make, along with what you need to know and do to avoid the mistakes when buying your next used car.

1. Buyers shop for a car not knowing what they really want. Many times I tried to help people that came in looking for an SUV, who ended up buying a totally different type of vehicle, basically on a whim. Car dealers love these kinds of people, because they are impulse shoppers that give car dealers the maximum opportunity to profit from the transaction. When car dealers profit, it costs unknowing buyers money. Know exactly what kind of car you want before you go shopping for it.

2. Buyers shop for a car without doing any homework. With the resources available online, just about anything a buyer needs to know about their potential purchase is available with a few mouse clicks. Buyers can research features, reliability, and what their used car should cost. They can also do online research to search vehicle availability in their local market, saving time and fuel that is wasted driving from car lot to car lot looking for something not even in stock.

3. Buyers shop without knowing what they can really afford. Simple math rules in automobile financing. Find out ahead of time what money over time works out to be. Online auto loan calculators can help with this. Don't forget to factor in local and state taxes, transfer fees, and license and tag fees. That can add seven to twelve percent or more to a used car's cost, depending on your local laws and regulations.

4. Buyers shop for a car without an up to date grasp of their credit situation and how that affects what they can afford and what their monthly payments will be. Credit standards are up to each individual lender, but there's really not much variance in their processes, as they mostly use automated scoring systems overseen by people in their loan departments. Used car buyers can shop for money ahead of time to know what they are able to comfortably borrow and avoid the headache of waiting for hours for a decision during the car buying process, and then paying too much for their loan.

5. Buyers are unaware of what their trade is really worth. Yes, online research helps here but there is one problem. The car pricing services online provide data. They get this data from wholesalers. The results from different pricing services can vary dramatically for the same exact car. Things may be different in your local market than the nationwide results from the pricing services. Recently fuel price increases have drastically reduced the value of trucks and SUVs as they flood the used car market. So take online value figures with a grain of salt and remember these numbers are old news.

6. Buyers owe more on their trade in than it is worth. Sadly this is the most common mistake people make, and it is the hardest one to fix. Dealers call this being "upside down." The best ways to fix this are cash to make up the difference or just waiting until the loan principal finally goes below the trade in value of the car. Here are some rules of thumb to avoid this on your next purchase. The length of the financing you commit to, minus twelve months, is when you will most likely have some equity in your trade. If you want to trade in 4 years, a five year loan is fine. But if you want to trade in 3 years, with a five year loan you'll take a bath.

7. Buyers shop without being ready to make a decision. There is no used car factory. Once the used car dealer sells the one he's got, odds are that he'll not get another just like it. If you've done your homework on price, know what you should pay and what your payments should be, and have found exactly the used car that meets your needs, then be prepared to take action to seal your used car buying deal. If it is clean, in demand, and you've made a great deal be happy with your purchase and move on with your life.

Buying a used car doesn't have to be a painful and agonizing process. Learn from these seven common used car buying mistakes and make your next used car purchase a stress free event.