Money Matters: Worst mistakes when buying a used car

July 21, 2017 01:30

Sponsored by NEFE

Buying a used car has advantages over buying new. While the "new car smell" may be gone, the new car price tag is gone as well. The price of most used cars is significantly lower than new models, even after just a couple of years. And once a new model has been on the market for a while, you'll find plenty of reviews about its reliability. But there are several pitfalls to buying a used car, and prospective buyers should do their homework before making such a significant purchase.

As explains, it's important to shop around not only for the price of the car, but for your car loan as well. Third-party lenders can often do better than the dealer when it comes to interest rates and fees. Don't buy without having an independent mechanic inspect the vehicle, to avoid any surprises. A test drive lasting only a few minutes may not be enough. A longer drive may unveil issues with the car's handling or engine performance. Be aware that a dealer may try to lowball you on your trade-in. Know the value of your vehicle before you walk in the door. And don't forget about insurance. A newer vehicle or a sportier model will probably mean an increase in rates.
To help your viewers/readers/listeners learn more about the advantages and disadvantages of buying used cars, talk with mechanics in your area. They can give your audience a checklist of things to consider. You can also interview different lenders to learn about how they determine rates and fees for auto loans, and insurance agents can talk about the factors that affect monthly premiums.

Sponsored by the National Endowment for Financial Education
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Courtney Collins of KERA-FM entered the 2016 NEFE/RTDNA awards contest with a month-long audio, video and interactive series about how people living on the financial edge rebuild after a tornado.