Four tips for buying a used car or truck in Middle Tennessee| Opinion

Molly Pollard
·4 min read

There may finally be light at the end of the tunnel for Middle Tennesseans who are in the market to purchase a used vehicle. Prices for pre-owned vehicles skyrocketed during the pandemic, but have fallen for four consecutive months according to the Bureau of Labor Statistics' April Consumer Price Index.

After peaking in January, used car and truck prices declined 0.2% in February, 3.8% in March and 0.4% in April. Prices flattened in May, but buyers still paid $60 less than the previous month.

While that is indeed good news, pre-owned vehicle prices are still more than 11% higher than a year ago, according to Manheim’s Used Vehicle Value Index. Kelley Blue Book puts the average price of a used car at around $28,312.

Cars sit in the lot of Franklin Motor Company in Nashville, Tenn., on Wednesday, July 14, 2021.
Cars sit in the lot of Franklin Motor Company in Nashville, Tenn., on Wednesday, July 14, 2021.

With the prices steadily trending downward, more consumers are shopping for used cars and trucks. Dealertrack, a leading automotive software and data analysis firm, says loans for used cars and trucks increase 10% year after year. Demand for used vehicle loans by our credit union members is even higher.

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Here are four tips to help Middle Tennesseans make a smart purchase on a used vehicle:

1. Know what you can afford

Before deciding which type of used vehicle to buy, you must first figure out your budget. Review your income, expenses and any debt obligations to make sure the price range for your desired car fits your budget.

Make sure to factor in other expenses such as gas mileage, insurance, maintenance and repairs. Don't forget the interest you'll pay every month if you are taking out a loan.

This will give you get a complete picture of the estimated costs of owning and operating your vehicle.

2. Research used car and truck prices

Knowledge is power, so before you step onto an auto dealer’s lot, it will help to be familiar with the cost of the make and model of the vehicle you want to purchase.

There are plenty of excellent online resources: Edmunds.com and kbb.com, for example, to get you started. Those websites also provide articles on how to negotiate with dealers.

You can also visit online sellers such as Autotrader.com, Cars.com, CarMax or Carvana, when comparison shopping.

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3. Get preapproved for a loan

Because of the heightened demand for used cars, you may be competing with several other buyers for popular vehicles. To give yourself an edge, get pre-approved for an auto loan if you are borrowing to make the purchase.

Mary Pollard
Mary Pollard

A preapproval will improve your negotiating power and help you close on the purchase faster — especially if other buyers have not been pre-approved. Most credit unions and banks — including Ascend — offer online tools that make it easy to submit the necessary information to obtain a used car or truck loan.

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4. Know what you are buying

Before driving a newly purchased used vehicle off the lot, make sure you are confident it is in good condition and meets your needs. To be sure, you can:

  • Take it for a test drive so you are comfortable with the seats, the dashboard and how the car or truck handles on the road.

  • Review the vehicle’s accident and service history, if you didn’t already during the research phase, by looking at reports from a company such as Carfax or other service providers.

  • Have the car or truck inspected by a mechanic or a friend who knows a thing or two about automobiles.

Car shopping for your next used vehicle can be fun, not stressful. By following these tips, you will be in the driver’s seat to make sure your pre-owned car or truck meets your transportation needs and fits your budget. Happy driving!

Mary Pollard is the Vice President of Consumer Lending at Ascend Federal Credit Union.

This article originally appeared on Nashville Tennessean: Auto shopping: Four tips for buying a used vehicle