Car has become a basic necessity of life nowadays unlike the last century when it was considered a luxury to most. Cars reduce the time and stress of commuting from one place to another. However, the current economic conditions force us to think twice before buying a car. The prices of new cars are so inflexible that owning a car has become a mere dream.

So, the best way to deal with such economic scarcity is to go for a second hand car that will fit you tight budget. Used car dealers provide you with many options from different brands of cars to different financial aids. They also offer free maintenance services for many years for their customers of used cars.

Used car sale by owners

You will find many people advertising for the sale of their used cars in local newspaper and on used car websites. The price that they offer is usually lower than the prices offered by dealers but they will not provide you with the benefits that you receive from the car dealers.

Advantages of visiting a used car dealership

The advantage of buying cars from used car dealers is that they offer many services like warranty and free maintenance. The most important thing that you should look for is warranty. The warranty period provided by used car dealers must be at least one year or more. This protects the customer from defective vehicles and provides many advantages to the customers.

One of the "hidden" fees about financing a car is that the dealers can increase your interest rate by adding an amount even when you have a good credit score. This is called the "dealer reserve". For example, if the interest rate from the finance company is 6.0%, the dealer will add up something like 2.0% and the total interest rate would go up to 8.0%. This hike in interest rate is not mentioned anywhere in the document you sign. This is just an additional profit for the dealers. You can negotiate the added interest rate but not the base rate.

You will be classified into one of the three categories of credit score when a finance company or bank checks your credit score. If your FICO score is more than 680 you will be rated as a "prime" customer or "A" tier and you are likely to qualify for the best interest rate.

If your score is between 620 and 680, you are named "near-prime" customer and you are likely to pay 5% higher interest rate than someone with better credit score.

A dealer does the preliminary check of the customer's credit history using one of he three credit reporting agencies. This is done to check the customers credit history - whether the customer had any serious credit problems in the past. If any problem is found then the transaction would be terminated.