For over 13 years, our 1998 Dodge Dakota was the company’s workhorse. It allowed us to run deliveries, provided ample space for all of our tools and ran great for many years. However, a few weeks ago, I took the Dakota to our trusted mechanic because it was not running well. The mechanic stated that there were various parts that needed repair, and he estimated that it will cost over $1,000 to correctly fix them all.
For the business, I needed transportation that is dependable, affordable and we needed it quick. I decided it was time to cut the cord on the Dakota and look for another vehicle. I sold the Dakota for $1,500 to a private buyer and we had around $500 extra in cash saved up. I now had a budget of $2,000 which will go towards the purchase of another vehicle.
Our mechanic suggested looking at a used cargo van because of its reliability and has more interior space. To start, I began to look for used vehicles on Craigslist, Edmunds, Kelly Blue Book and Autotrader. When I found one listed that was within a 20 minute drive, I contacted the seller to arrange a time to go look at it.
To assist with my decision on the vehicle, I brought my mechanic along with me for the test drive. Prior to our visit I had prepared questions to ask to obtain an overall general feel of the vehicle. For example, I asked the seller:
Why are you selling? Are there any defects that I should be aware of? How does the engine run?
Upon receiving the answers, I took the cargo van for a test drive. When test driving a used vehicle, I keep the following in mind:
Look the entire car over – from tread on tires, underneath chassis for rust to minor blemishes on body. Take note of anything that may need work. Test brakes, engine, all lighting, windows, etc.
Upon our return, it was then time to negotiate. Because I needed a vehicle that day, I pointed out the faults of the vehicle: the tires were almost bald, the brakes needed work and there were some minor blemishes on the body. After pointing out the faults the purchasing price was lowered and we agreed upon a purchase price of $2,000 cash. Another point of advice is to always bring cash. Many times the seller is looking to unload the vehicle within a short time frame and by having cash on hand will help expedite the process. Once I received the title, I knew I had made a good purchase.
Here are my tips that I use to save money when purchasing a used vehicle:
Always bring another person with you during test drives. Bring cash. Do not be afraid to walk away if seller is unwilling to negotiate. Do your homework. Evaluate the entire vehicle.
According to FinancialSamuri.com, a general rule of thumb when considering whether to purchase another vehicle or fix the one you have, is if a fix costs more than 30% of the value of your car then consider buying a new one.
By following the advice above, I saved over $800 from the dealer’s asking price and ended up with a reliable vehicle that my company can depend on.
Sources:
Financial Samuri. (2011) Fix the Car or Buy a New One.