Buying a used car? Dave Ramsey Says You Should Ask These 6 Questions

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It is important to get the right information before buying a car.

Key points

  • Buying a used car can save you money compared to buying a new one.
  • It is important to have confidence in buying a used car and to understand the costs involved.

If you need a car, whether it’s because you’re moving from a city to the suburbs or because your last car just dropped, you might be considering buying a used model rather than a new. It could mean spending a lot less.

But buying a used car can also mean ending up with a vehicle that isn’t in great shape or doesn’t serve you well. And the costs of ownership could end up being higher than expected. So before buying a used car, financial guru Dave Ramsey strongly recommends asking these important questions.

1. Why is this car being sold?

If you are buying a car directly from its owner, as opposed to a dealership, you shouldn’t hesitate to ask why the car is dumped. The owner may no longer be able to pay his auto loan repayments. Or, they may have twins and need to convert a smaller car into a minivan. Answers like these shouldn’t really raise a red flag. But if the seller hesitates, there may be something wrong with the car that he doesn’t want you to know about.

2. How old is the car?

Ramsey says most new cars lose 60% of their value after five years. This is an important number to keep in mind when considering buying a used car. If a vehicle’s price seems high for its age, feel free to negotiate that figure down or just walk away.

3. What is the mileage of the vehicle?

Some cars can go 200,000 miles before they start having problems. Others may not work the same way. Either way, it’s important to consider a vehicle’s mileage before buying it. A car with 90,000 miles will likely last longer than a car that has 190,000 miles.

4. Is there a warranty?

If you buy a used car from a dealership, it may come with a limited warranty. And that’s something you probably want to have. Even if you buy a used car directly from the owner, if it’s new enough it may still be under warranty, so it’s worth asking.

5. Has the car had any accidents?

A car that has had a few minor accidents (think a poorly timed exit from the parking spot) can be perfectly functional and safe to drive. But be careful when buying a car that has been in a major accident. You never know what lasting damage might result. If the car you’re looking at has been in a major accident, have a trusted mechanic inspect it before you make your purchase.

6. What will my insurance costs look like?

You might assume that your car insurance will be very cheap if you buy a used car. But that may not end up being the case. It’s a good idea to contact auto insurance companies and get quotes so you know what you’re dealing with. The last thing you want is to misjudge your insurance costs and end up with an expense you can’t afford.

Buying a used car can be a great way to get your hands on a vehicle. Just be sure to ask the right questions before making a purchase.

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