What to Ask when Buying a Used Car from a Buy Here Pay Here
(This is the beginning of a free, 3 Part Series on Buying a Car with Bad Credit.)
If you are like most others, you may find yourself drawing a blank while you are sitting across from your salesperson. You know there are questions you want to ask and definitely ones that you should ask, but what are they? Some people simply feel intimated by the entire process. Don’t be scared to ask questions. In fact, use this list or write down your own questions, and take them with you so even with all the excitement, you will get your answers!
If your salesperson avoids any of your questions or is rushing you, find another salesperson or buy here pay here car lot that has time for you. There are millions of them out there who will be happy to make sure that you are comfortable with your purchase. This is your sale, you are in control, and it doesn’t happen until you say so!
Where did the car come from?
Salespeople love to say the car had one elderly owner who only drove the vehicle on Sundays but that is rarely the case. While they can’t necessarily show you the person’s name or address on the title, they can provide proof if the vehicle had one owner or if it was one of the several dozen they picked up last week at the auction, which they know nothing about.
If the car was a trade-in from a responsible owner, there is a good chance that they have a copy of maintenance receipts on file. The individual may have even had their maintenance and repairs done right there at the dealership, in which case they will be in the computer.
Can I have an extended test drive?
You will find that many buy here pay here car dealerships will allow you to take a car overnight as long as you don’t put over a certain number of miles on it. This gives you time to take it on the highway, in the city, have your mechanic look at it, see if your child’s car seat goes in easily and if your dog is happy getting in and out of it.
Will you provide a CarFax?
Although you can order a CarFax yourself on any vehicle you want, most reputable dealerships that have nothing to hide will generally be happy to handle it for you. Always double check that the vehicle identification number on the CarFax report actually matches the vehicle you are looking at.
What is the cash price?
Although dealerships love the money they make off financing people with bad credit, there is nothing sweeter than an easy cash deal. If you have cash, you almost always get the best price possible.
What does certified mean?
Interesting how almost all cars wear a certified label yet few dealerships can actually back this up. Quite honestly, few consumers ask for proof so they get away with it. If the car has gone through an inspection to be certified, there will be paperwork on it; ask to see it. You should also ask who did the certification. Are they a random mechanic in the service department or are they recognized as someone who can offer this label?
Is there a warranty?
Most used cars will at least have a 3-month, 3,000-mile warranty, find out what it covers. Do repairs have to be done there? If there is an extended warranty on it, find out as much information as you can about it. You need to know if it is a major company that all repair shops will accept or if you are limited to only a handful of facilities. Most buy here pay here car lots don’t offer warranties unless you pay extra.
You will want to be informed of everything covered under the warranty, if there is a deductible and if it includes any extras like 24/7 roadside service or towing reimbursement.
Important Questions for the Finance Manager
You will likely find that the finance manager at any buy here pay here dealership (yes, buy here pay here car lots, too) is quite a busy person. They may come off grouchy at the end of the day, but if you spent your day convincing banks to buy deals while being stalked by a team of salespeople nonstop, you may find yourself on edge too. Don’t pity them too much, they are well compensated.
You will also find that they talk quickly and go over paperwork fast. Sometimes, this is because they are so busy, but other times, it is because they are trying to hide something. Have your questions ready to ask! Make sure you get answers. Don’t be afraid to ask them to slow down or explain something over again. If you are not getting the answers you want, go to another dealership. You have already secured financing; a different manager can call the lender and request the approval to be switched to one of their vehicles if necessary.
Are there prepayment penalties?
If you have bad credit, you already know you are getting a high interest rate, so the best thing you can do is make extra payments toward the principle. This applies to cars financed at buy here pay here car dealerships, as well. Ask the finance manager if there are any penalties involved with the particular lender you are entering into an agreement with.
How long is the term?
Fantastic! The salesperson got you the car you wanted in your ideal payment range. Will your toddler be entering junior high before it’s paid off? Long-term means more interest and an increased risk of dealing with negative equity, if you want to trade the vehicle in after a couple years.
What is the interest rate?
You might feel a hard blow to the gut if you ask what the interest rate is; ask anyway! Also, make sure that the rate is not going to change at any time during the length of the loan as well.
I didn’t ask for an extended warranty; why is there one added?
You will find that many bad credit lenders require an extended warranty on the vehicle to ensure that it is properly taken care of. Although finance managers will try to sell you a lot of things, this really is something you want. Is it easier to pay a couple extra dollars a month in your payment or come up with several hundred for a repair?
Do I have to have life and disability insurance?
No! The finance manager will likely imply that you do and tell you what a good idea it is but you aren’t required to have it. That being said, sometimes it is a good idea to add to your loan. Disability is actually pretty smart to have, because if you can’t make the payments due to a disability, your payments will be made for you. Just because you can’t work, doesn’t meant that your family won’t still rely on that vehicle. As far as insurance goes, it depends on your situation. Again, if you have a family, do you want them to be responsible for paying for the car if something happens to you? If you don’t have a family, are you really concerned with the car being paid off if you’re gone?
You want me to pay how much for window etching?
No, you didn’t read that wrong, some dealerships charge as much as $500 for window etching. Well, at least that is what the finance department charges anyway. Does it really deter thieves? Sometimes it does. Can you buy an alarm and have the glass etched somewhere else and save a couple hundred dollars? Absolutely! So keep that extra cash in your pocket.