Buying a used car from a dealer can be stress-free with proper research, a thorough car inspection, and understanding your financing options, especially with the help of credit brokers if you have bad credit.
Dealerships can be anxiety-inducing spaces, with over half of car shoppers expressing feelings of anxiety or discomfort during their visits.
However, allowing fears of dealership experiences to stop you from considering used cars can be a costly decision. Reputable dealerships provide access to a diverse selection of vehicles, along with valuable protections such as vehicle history reports and warranties. This peace of mind is especially crucial for buyers seeking a cost-effective solution.
For those with bad credit, knowing what to look for in a used vehicle is even more important to ensure it fits your budget! Read on to discover our top five tips for smashing the buying process and driving away confident in your motor.
Understand Your Budget
Look beyond the price tag! While the cost of purchase is an important factor when looking at used cars, it is equally important to consider additional costs. Insurance premiums, maintenance fees, and taxes can all add up faster than you might expect.
For instance, let’s imagine you are drawn to a used 2018 Ford Focus listed at £12,000.
- On top of this, you have to consider the average insurance cost for a Ford Focus which can range from £800 to £1,200 annually.
- While Ford vehicles are generally reliable, expect to budget around £300 to £500 each year for regular upkeep.
- Add in taxes, which can vary but let’s call it £200 annually.
- And let’s not overlook fuel costs – if you drive about 12,000 miles a year, you could be looking at roughly £1,200 for fuel annually.
Suddenly that £12,000 car could cost you up to an extra £3,000 each year just to keep on the road!
Do Your Research
In our modern technological age, doing a few minutes of due diligence has never been easier. Online car valuation sites help you understand the current market value of various vehicles by comparing costs of models.
For the savvier buyers, it is also crucial to check the depreciation rates of the cars you’re considering. Some vehicles lose value more quickly than others – particularly luxury cars like Maserati – which could lower what you recoup in the future.
And as we discussed before, don’t forget to consider running costs like fuel, maintenance, and insurance expenses. Only through thorough research of the total costs can you be confident of making an informed decision at a dealership.
Check the Dealer’s Reputation
Online reviews are your key to understanding how a dealership treats their customers. Reading about their specific experiences often reveals recurring themes – good and bad. It is best to keep an eye out for information related to customer service, transparency in pricing, and the quality of the vehicles sold.
For instance, if you see multiple customers praising a dealership for its helpful staff and no-pressure sales approach, that’s a good sign! On the flip side, if many reviews complain about hidden fees or long response times, it might be best to steer clear.
Inspect the Car Thoroughly
When it comes to buying a used car, a thorough inspection is key to ensuring you’re making a smart investment. Here’s the key things to look out for:
Body Condition:
- Exterior: Check for any signs of previous accidents, such as mismatched paint or uneven gaps between body panels.
- Windows: Inspect all windows for cracks or chips.
Interior Quality:
- Seats: Examine the seats for any wear and tear, stains, or tears in the upholstery.
- Dashboard: Look for any warning lights on the dashboard when the car is started. Ensure that all controls, such as air conditioning, heating, and infotainment systems, function correctly.
- Odour: Pay attention to any unusual odours, which could indicate water damage.
Test Drive:
- Acceleration and Braking: Ensure the car accelerates smoothly and that the brakes respond well without any grinding noises or vibrations.
- Steering: Check if the steering is responsive and does not pull to one side.
- Suspension: Drive over bumps to assess the suspension’s ability to absorb shocks. Listen for any unusual noises that may indicate problems.
- Comfort: Evaluate the overall comfort of the ride, including seat comfort and cabin noise levels.
If you’re feeling uncertain about any aspect of the inspection, don’t be afraid to raise it with the dealer – they can knock the price down to account for any damages.
Consider Financing Options Carefully
There is no one-size-fits-all financing option. Take the time to weigh up the primary financing options available, including the advantages and disadvantages of each, before you pull the trigger.
Personal Contract Purchase (PCP)
With Personal Contract Purchase, you pay a deposit (usually around 10% of the car’s value) and then make monthly payments over an agreed term (typically 2-4 years). At the end of the term, you have the option to pay a final ‘balloon’ payment to own the car, return it, or trade it in for another vehicle.
Pros:
- Lower monthly payments compared to traditional loans, making it easier to fit within your budget.
- Flexibility at the end of the term; you can choose to keep the car, trade it in, or return it.
Cons:
- Mileage restrictions may apply, and exceeding them can result in extra charges.
- You won’t own the car until you make the final balloon payment.
Hire Purchase (HP)
Like PCP, Hire Purchase also involves paying a deposit followed by fixed monthly payments over an agreed term. However, at the end of a HP term, you automatically own the vehicle.
Pros:
- You own the car outright at the end of the term without any additional payments.
- Fixed monthly payments provide clarity and help with budgeting.
Cons:
- Monthly payments tend to be higher than with PCP, which may strain your budget.
- If you miss payments, the dealer can repossess the car.
Representative Example
To better understand the differences between Hire Purchase and Personal Contract Purchase, consider the example below for a used Ford Puma:
| Aspect | Hire Purchase | Personal Contract Purchase |
| Car Price | £16,000 | £16,000 |
| Deposit | £3,200 | £3,200 |
| Loan Amount (Car Price – Deposit) | £12,800 | £12,800 |
| Loan Term (typically 1-4 years) | 4 years | 4 years |
| Illustrative APR | 5.9% per annum | 7.9% per annum |
| Monthly Payments | £299 | £212 |
| Final Payment (for ownership) | £0-200 (nominal fee) | £5,723 (optional Balloon Payment) |
| Total Amount Paid | £14,352 | £15,687 |
| Ownership | You own the car after the final payment | Option to buy, return, or refinance the car |
*This car finance example is for illustration purposes only. Please contact our finance team for a tailored quotation.
How Credit Brokers Can Help You Finance A Used Car
If you’re struggling with bad credit, credit brokers like Bad Credit Motor Finance can be a game changer when it comes to financing a used car. Here’s how:
- Personalised Solutions: Brokers take the time to understand your unique financial situation and tailor financing options that really fit your needs.
- Access to Specialised Lenders: They have connections with lenders who are open to working with individuals who have poor credit histories. This means your chances of getting approved are much higher than going through traditional lenders.
- Expert Guidance: Credit brokers provide support every step of the way, helping you understand the terms and making sure you’re always in the loop.
Conclusion
Buying a used car from a dealership doesn’t have to be a nerve-wracking experience. By considering all costs beyond the sticker price, researching both the vehicle and the dealership, and inspecting the car thoroughly – you can bag a bargain without any headaches!
Plus, when it comes to financing, exploring your options and working with credit brokers can open doors to better deals, even if your credit isn’t perfect. So take a deep breath and prepare to drive away in a car that’s perfect for your needs.
If you are ready to explore competitive car finance options that suit your personal needs, apply for a free, no-obligation quote with Bad Credit Motor Finance.
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