A Comprehensive Used Car Buying Guide for First-Time Buyers

Are you looking to buy your first car? Are you confused about what to buy, where to buy it from, whether you need a warranty, and how to get financing for your car? There are so many questions that come to mind when you’re buying a used car, and in this guide, we’ll give you all the tips and tricks to help you research your car so you feel confident about your purchase. 

How Much Can I Afford to Spend on a Car?

The first thing you’ll need to consider is how much you want to spend on your car. By assessing how much you can spend upfront, you’re less likely to go over budget as you’ll only look at cars you can afford. 

Draw Up a Budget

A good starting point is to assess all of your monthly expenses to see how much you can realistically afford. Remember that you will also have other associated costs, including car insurance, gas, routine maintenance, and car repairs, so include this in your budget as well. 

Once you’ve figured out your monthly contribution for your car, use our loan calculator to find out the vehicle that fits your budget. 

Where Should I Buy My Car?

There are many places to buy used vehicles. You can buy them online (private seller/online dealership), visit a dealership, or purchase them through a private sale. No matter where you buy your vehicle, there are ways to ensure you’re getting a good deal.

Buying From a Used Car Dealership in Edmonton

One of the advantages of buying from a dealership is that there are several ways to verify their reputation. Many dealerships also conduct a thorough inspection on vehicles that they purchase for their lot. 

Key factors to consider when choosing a dealership include:

• How long they’ve been in business

• The overall content of their Google reviews

• The quality of the salespeople—are they friendly and helpful or evasive and pushy? 

• Are you able to get all of the information you need?

• What happens if the car has problems after purchasing? 

While car dealerships traditionally have a bad reputation, there are plenty that prioritize your satisfaction and sell quality used cars. Choose a dealership that values transparency and is willing to give you all the information you need without pushing you to make the sale.

Buying from a Private Seller

There are many social platforms with ads from private sellers, and it’s important to be aware of scams. When buying from a private seller, check the service records to assess how well they’ve taken care of their vehicle. It’s also important to consider scheduling a private inspection before buying to verify the vehicle matches what is advertised. 

How Do I Inspect a Used Car?

Carefully examine the interior and exterior of the car to assess for any damage. It’s common to find scratches and dents on used cars but be wary of signs of rust. 

Most reputable dealerships will perform an inspection on the car and provide detailed information about the results. You can also access information about the car through a CARFAX report by entering the vehicle identification number (VIN) of the car. The CARFAX report offers details such as:

• Accident history

• Service records

• Manufacturer recalls

• Liens

• Odometer readings

Many used car dealerships that list their cars online provide automatic access to this report.

Choose a Car with Detailed Service Records

A well-maintained car is more likely to run well compared to a car that has barely been serviced. Wherever possible, choose a car that has been well taken care of and check the service records so you know what kind of work has been done. 

Do Used Cars Come with a Warranty?

Brand-new cars automatically come with a manufacturer's warranty. This warranty covers the larger, more expensive components, such as the engine, electronics, air conditioning systems, and transmission. When you purchase a newer used vehicle, the warranty may still be in place. The good news is that warranties are transferable to a new owner, so ask the dealer about the amount of coverage that’s left.  

Should I Buy an Extended Warranty for a Car? 

When buying a used car, you may want to consider buying an extended warranty to cover repairs after the manufacturer's warranty expires. Extended warranties don’t cover all the possible problems, but they usually cover catastrophic issues such as engine and transmission failure. Another option to help avoid such failures is to choose a car that you know has been properly maintained. 

What Is a Good Price for a Used Car? 

The price of a used vehicle will depend on several factors, including the make, model, year, mileage, and condition of the vehicle. If you’re not sure whether you are getting a good deal on the car you want to buy, it’s helpful to research similar makes and models online. 

How Can I Get Financing for My Car? 

Many used car dealerships offer financing services, making it easy to purchase your car. However, there are certain things to be aware of before starting the loan approval process. Look for a dealership that:

• Works with multiple lenders so you can negotiate the best loan terms

• Has extensive experience in financing and are expert in negotiating loans

• Won’t damage your credit score 

Will I Qualify for a Loan? 

If you are new to auto financing and have little experience with credit, you may be concerned about your prospects for taking out a loan. The good news is that whether you’re armed with credit or this is your first loan, there are many loan products designed for your needs. 

Do I Need a Good Credit Score to Get a Loan?

So one of the big things when you’re applying for a car financing loan is something called a credit score. You build your credit score by accessing various sources of credit and then paying back your loans. Examples of credit sources that affect your credit score include:

• Mortgages

• Payday loans

• Bank loans

• Credit cards

• Utility bills

Your credit score is determined by the following factors which help the lender to decide whether to approve your loan or not.

• How long you’ve been using credit—the longer, the better, as this reflects that you have experience using credit.

• Your sources of credit—varied sources of credit are ideal.

• Your payment record—lenders want to know that you are responsible for paying back your loan.

Many people have low credit or no credit. This includes students and newcomers to Canada. If you have missed payments or declared bankruptcy, you may also have a low credit score. In both of these cases, it’s still possible to qualify for an auto loan in Edmonton with an application for a bad credit car loan. 

What Is a Bad Credit Car Loan?

Bad credit car loans are designed for individuals who don’t qualify for regular bank loans. The main difference between regular loans and bad credit car loans is that the rate of interest for a bad credit car loan is much higher, which means your cost of borrowing increases. Your interest rate will depend on your credit rating as well as your income, with interest rates reaching as much as nearly 50%. 

How Can I Lower My Car Loan Interest Rate? 

If you are planning to buy a car and want to be proactive in securing a lower interest rate, there are several steps you can take.

Build up Your Credit

Start applying for credit early by getting a credit card and placing cellphone bills in your name. The important thing about working with credit is ensuring you pay all your bills on time. A perfect payment record will reflect well on your credit rating, pushing it up for a better score. Good credit scores portray you as a responsible borrower which will help to secure a better loan rate. 

Finance a Used Car with a Bad Credit Car Loan in Edmonton