If you were considering buying a car before lockdown and you still have the ability to do so, now would be a good time to do so. The used car market has experienced large price declines as a result of the lower demand caused by the lockdown. Vehicle financing is also looking cheaper with our repo rate* having been cut numerous times this year to a 47-year low. For consumers, this means lower repayments on vehicle loans.

Hertz, the oldest car rental company in the world, has recently filed for bankruptcy protection*. Many of Hertz’s rental cars could end up in the used car market, causing a spike in supply which will reduce prices in the short-term. 

Our domestic rental car market is heavily dependent on the tourism industry. If the tourism industry doesn’t pick up, rental cars will be forced onto the used car market as these companies need cash flow rather than used cars right now. 

There’s nothing worse than finding out you purchased a faulty car. So, to make sure you aren’t left broken down on the side of the highway on a rainy day, here are five pointers for buying a used car.  

Set your spending plan 
Calculate the amount you can spend, or the financing you can afford for the car, upfront. Going to the dealership with a pre-approved loan also can help because it sends out the signal that you’re a serious buyer.

Choose the “right” car 
The car you choose should be based on your needs. We know how easy it is to get carried away with gimmicky add-ons which add little value. Make sure you have a few must-have features in mind – maybe extra space and a large boot. A unique paint colour does look nice but is expensive to maintain should you have to repaint or touch-up areas.

Vehicle safety is also of paramount importance, which is why Euro NCAP has created an easy to understand car safety rating system which will help you to choose the right car. 

Locating a good used car 
Online classifieds have made browsing for used cars much easier. They have also put the power back in the buyer’s hands. Without a salesperson working their magic on you, you can comfortably compare and locate your dream car in your own environment. 

Assess the vehicle history 
A car that has been in an accident is a major red flag.  Although an accident isn’t always one’s fault, it may give an indication of the previous driver’s behaviours. The previous driver’s behaviour is an important aspect which is often overlooked as the way they drive directly affects the car’s reliability going forwards. 

Minor cosmetic defects could be the tip of the iceberg in terms of care taken by the previous owners so don’t view them lightly. 

Go on a test drive 
Visually examine the car and don’t be afraid to ask questions. Inspect the car’s bodywork in full sunlight as it is easier to see touch-ups, re-paints and dents.    

Take it on a road that has it all – hills, turns and highways – and not a predetermined course. Feel and hear for vibrations, test the responsiveness of the brakes and steering and assess the car’s power.

With the used car market offering bargains now, finding your dream car could be a whole lot easier. Following these pointers will help you to make a better-informed decision. 

Ross Reid

Written by .

Ross has joined the 22seven team as a Slice and Blog writer. He's a keen financial writer who enjoys demystifying the world of finance. Ross is currently pursuing the CFA designation and has a background in Real Estate finance and investment. In his spare time, he can usually be found reading, running or on the football field.
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