According to the National Automobile Dealers Association (NADA), in the year 2021, a used car’s average national price is recorded at $23,643. Whereas it was $21,020 in 2020, which means that 2021 saw an average price rise of around 12.5%.

As per, cars on the present market bring around 70-80% of their sticker price which used to be 65-70% in the year 2019. It is apparent that the depreciation has reduced and the present day’s used car market is becoming quite profitable for the sellers.

What Should Be Your Budget for a Used Car?

Buying a used car or taking a car loan has become quite easy today, unlike the previous times. All you have to do is install the app and do and follow the easy steps it asks you. Certain considerations you need to make while buying a used car include car insurance concerns, budget concerns, car costs, trade-in decisions, and so on. What a smart buyer needs to do is research and decide certain things prior to browsing for his next ride. It is always a good idea to not let factors such as make, model, add-ons, accessories, and color determine your decisions while purchasing a used car, as this could prove to be financially draining.

Deciding Your Budget based on the Car Type

The foremost decisions you need to make here are:

What should be the body style of the vehicle- A truck, car, or SUV?

…followed by, Who should be the manufacturer- Honda, Ford, Chevrolet, or BMW?

Once you decide this, go for other factors such as engine size, two or four-wheeler, four-door or two-door, interior, safety, and entertainment features, etc. Make a list of the most important features and the extra costs that you can avoid.

Figure out your budget now. 

If choosing cash payments, set your limits, a purchase price that you won’t be exceeding, and be patient even if it doesn’t work out. If going cashless, your budget will include a down payment amount and monthly payment range. If using financing, you must know your price limit and never let the car dealer negotiate the monthly payment to fit your budget. As a result, the price rises to negotiate a lower monthly payment and so does the financing term. So, try to get the maximum trade-in value for any trade-in for a more affordable payment.

You can obtain a Private Party Auto Loan from your lender, bank, or credit union if you choose to finance your purchase but buy the car from a private seller.

Spend some time over different websites, researching your chosen car, looking at its reviews and evaluations in the process of learning about its reliability, reputation, and user experience. You may also try to choose a vehicle based on the lists of recommended vehicles based on reliability, as it is always a better idea to get a car that is proven its dependability. Visit websites like Kelley Blue Boo. Edmunds, or NADA to get a used car value check. Find out more about the car such as model year, type, trim level, etc. by plugging its Vehicle Identification Number (VIN) into its decoder. Search for local car dealers with websites over the internet, list down your favorite cars, and record their information; contact them and take a ride if the price asked sounds good to you.

Time for a Test drive

If you obtain the VIN for the car, you may run a report on the car’s history at websites such as Carfax. But if not, then use the following list to ask questions from private sellers:  the reason to sell the car, period of ownership, previous owner information, accidents if any; check the engine and ask for any recent mechanical work history, oil change intervals, installation of any after-market extras; check the mileage, damages, lights, Radio and Media players, AC, miles driven, heater, wipers, horn, etc.

It is always a great way to do your homework and go prepared to buy a vehicle, as it makes the process lot easier and less stressful. Once you select the car that meets all your needs and is in your price range, close the deal and drive it home.