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Imagine buying a vehicle at a used car lot that’s fine for about a week — then all of its doors fall off.
According to mobile car repair company YourMechanic , this has happened to customers before. And that’s not all you need to watch out for when it comes to buying used cars.
They do come with benefits that make your wallet happy — you’ll pay about $525 per month to finance a new car, while a used car will cost about $378 per month, according to credit bureau Experian . That’s 28 percent less than new cars. But used vehicles have more risk attached to them, whether it be how well their steering wheel moves or how frequently they’re stolen.
You can avoid getting duped by knowing how to get the most bang for your buck, looking out for malfunctioning models, and protecting your vehicle from theft.
Financing a new car can add up quickly — total auto loans in the U.S. equaled $1.1 trillion in 2017, according to business news publication Quartz , and the average new car loan hit a record high of $31,455 in 2018, according to Experian .
But buying a used car can give your savings account a break.
“For most Americans, price and monthly payment are still significant deciding factors, as they are often searching for a vehicle to fit within a certain budget,” says Mike Ouyang of LendingTree’s auto division. “Used cars offer a huge price advantage and are great for those who are less picky about having the most current features. But used cars often have fewer dealer incentives, such as low financing, to capture buyers.”
When you’re financing used cars, there are a few things you need to note…
If you don’t have a set budget for your monthly payments, you risk paying more than you can afford — auto loans make up about 9 percent of all U.S. debt, according to Forbes .
Consumer finance company Bankrate says that a good rule of thumb is to spend no more than 15 percent of your monthly household income on a monthly car payment .
But there are other auto costs to take into account, including gas, insurance, repairs, and maintenance. The monthly payment plus these expenses should take up no more than 25 percent of your monthly household income, according to Bankrate.
Car dealers will often help you set up an auto loan, but only because they receive a fee or commission on the loans they’re involved with, Bankrate reports.
If you go into the shop with a pre-approved loan, however, you’ll be able to compare your rates to the ones the dealer is offering and choose what works best with your budget. And local lenders like credit unions tend to offer rates that are 1 percent to 2 percent lower than conventional banks, Bankrate reports, so make sure you investigate all of your options.
No matter what a car dealer will have you believe, the price of a vehicle isn’t always set in stone. Negotiations are normal, if not expected.
Personal finance company Credit Karma has a few methods you can use to make sure you’re paying what the car is really worth , and the first is to research the market value of the car you want on auto-appraising sites like Edmunds  and Kelley Blue Book . Arming yourself with this information will help make sure you aren’t needlessly throwing cash away.
Credit Karma also recommends that you negotiate each part of the transaction separately so that dealerships can’t slip hidden fees into the contract. Focus on the big picture instead of monthly pay — a dealer may agree to lower your monthly payment, but this would stretch out the loan’s payback period and make you ultimately pay more in interest, the company says. Carefully revise every decision you make.
And if a dealer isn’t willing to work with you, don’t be afraid to walk away.
No, we don’t mean the fruit.
“Lemons,” or seemingly normal cars that are faulty after a short time, can come from anywhere. Two-thirds of lemons were purchased at new and used car dealerships, and most of those duds were discovered after only a month of ownership, according to YourMechanic. According to auto-appraising site Edmunds , it’s much more likely for a used car to be a lemon.
And they can be costly: more than one-third of lemon purchases put new owners out $10,000 or more, and that’s just on repairs to the original car. That doesn’t include buying a new vehicle after you’ve discovered you bought a lemon.
Here are some warning signs you can look for to make sure you don’t end up with a malfunctioning car:
The pre-purchase inspection determines what state the vehicle is in and lists any future issues you as the owner may face if you buy it. You may be paying a bit more up front, but at least you’ll know what your car is (in)capable of before you buy it.
Nearly 3-in-4 respondents to the YourMechanic survey say they didn’t get an inspection, and nearly the same amount said they didn’t even know these types of services were available in the first place.
It doesn’t always take a licensed mechanic to suss out a car’s weak spots.
Consumer Reports , a nonprofit that gives product ratings and reviews, has a few tips about inspecting a car before you decide to buy — and sometimes all you need is a good old-fashioned game of I Spy.
The organization recommends that you check the exterior, interior, hood, tires, and steering wheel of the car for problems first. If you see multiple dents, chipped paint, mismatched body panels, missing parts, or any other obvious errors, you should be wary.
You can also check out Consumer Reports’ car model reviews online  and keep an eye on the Department of Transportation’s car recalls  to make sure you don’t buy a vehicle with a troubled past.
Even if the car looks fine on the outside, it may be anything but.
More than one-third of lemon owners notice symptoms within a week after purchasing, with another third noticing after a month. YourMechanic says brake problems were the most commonly reported issue, followed by problems with the starter, suspension, and engine.
“The most extreme issues reported by lemon owners included an instance where all of the doors fell off of the vehicle, a large oil leak, dishonest emission test results, inaccurate odometer readings (in one case with an instance of a 100,000+ mile discrepancy), faulty airbags, a convertible with a broken top and windows, and unreported collision damage,” YourMechanic says.
The problems don’t stop after you’ve bought your car — even if it isn’t a lemon.
The nonprofit fraud investigation organization National Insurance Crime Bureau  (NICB) found that used vehicles are stolen more than new vehicles, with nine of the top 10 most-taken vehicles of 2016 coming from non-current model years:
But the NICB says there are some steps you can take to help yourself if someone ever tries to jack your car:
Use common sense when parking your car for extended periods — stay in a well-lit area and close all your windows before you leave. Don’t leave your keys or fob in the car, or you’re letting the thief win half the battle.
Make sure your car has some type of warning device that works and can be heard easily. It helps if you can hear someone trying to break into your car. And if your vehicle has a kill switch or a smart key that can stop it after a thief has tried to get away, know how it works and be prepared in case you need to use it.
Many new cars also use some type of built-in GPS device that can track it in case of emergency. Knowing how to track your vehicle can make a difference in the moments after a theft.
If your car is stolen, you want to pay as little as possible to replace it. That’s where car insurance comes in.
According to personal finance website ValuePenguin , “comprehensive insurance” is the only kind of insurance that can reimburse you for car theft, as it covers events that don’t include a car driving into something else.
But if owning a car is giving you a headache and a bank break, consider moving to a place where you can live car-free, like New York, San Francisco, or Washington, D.C. .
Hope Dean contributed to this report.
Published by Debt.com, LLC Mobile users may also access the AMP Version: How to Save Money When Buying a Used Car - AMP.