Know Before You Buy (Your Next Car)
Things to know before buying a car
In the US, roughly 93% of households have access to a car. With factors like inflation, increased labor costs, and higher insurance rates, it is important to explore all avenues when considering a car purchase. The good news is that according to J.P Morgan, “researchers opined that new car prices were likely to fall no more than 5% in 2023 while used vehicle prices could contract by 10% to 20%.” Since buying a car may be moving up your priority list, consider these 3 common purchase options and some tips to ensure a smooth transaction.
The most common and safest form of purchasing a car is through a licensed car dealership. Usually with a large number of cars on the lot, you work hand-in-hand with a salesperson to ensure that the sale goes smoothly and easily for all parties. When acquiring a car through a dealer that requires a loan, it is common in Ohio that you will not receive the title to the car right away. The standard procedure is that the dealership sends the title to your lender, and you will be sent the title once the loan is paid off. This process can vary depending on what state you live in.
Some people prefer not to work with a dealership and the paperwork that accompanies it. As a result, an option is to use private sellers to handle the transaction and transfer of ownership themselves. Buyers should do their homework with a private seller, as the seller may not have the extensive list of information that the licensed dealers do. Minimally, make sure you test drive the car, check the condition of the car, and obtain a notarized title of the car before any transaction of funds takes place.
A common way to find private sellers is by using Facebook Marketplace or another social media platform. While this is a relatively new way of buying a car, many of the same best practices should be followed.
Here are 5 tips when potentially purchasing from a private seller via social media:
- Reputation. Look to see if the seller has any reviews or recommendations.
- Legitimacy. How long has the seller been on the platform? A newly created account created for the sole purpose of selling things carries an additional scam risk.
- Safety. The sale of the automobile should take place at a predetermined location that both you and the seller agree upon. The most common place to do this is at a public parking lot to ensure the safety of both parties.
- Background Checks. When purchasing a car via social media, the seller may not provide the same documentation or vehicle history as the dealerships do. Do not be afraid to ask the seller for this information, as you are looking to confirm that nothing goes uncovered.
- You. If you feel like something about the deal is fishy or too good to be true and you have not exchanged payment or paperwork, do not be afraid to back out of a deal! The most important thing in life is you, and you should proceed with a deal if the indicators tell you to stop.
Essentially renting a car, leasing is a great option for people that like to stay up to date with the latest technological advancements and give them something fresh and new to drive. Also done primarily through a dealership, the car is rented out to the consumer with a predetermined term date that would require the turn-in of the car at the conclusion. Another benefit of leasing a car is that, in many cases, the dealership provides routine maintenance to ensure that the car is maintained properly. At the end of the lease, the person also has the option of purchasing the car outright. If you plan to lease a car, be aware that leases limit the number of miles you can drive within your lease term, with penalties in the event you go over.
Once you’ve made your purchase, then it’s time to protect it.
We partner with NMD Insurance to provide risk management services that will protect both you and your assets. With things such as home, auto, business, and life insurance, we have you covered. Contact us today or go to our website for more information.