Things to Consider Before Buying a Used Car in Pakistan

A number of things need to be taken into account prior to buying a used car in Karachi, Lahore, Rawalpindi or Islamabad. Do you want a Honda, Toyota or a Suzuki? How are you going to finance it? What features should your car have? All these and additional factors need to be considered before choosing which car to buy. Outlined below are the important steps you should follow before buying a good used car in Pakistan.

1. Come up with a Manageable Budget
If you manage your household expenses and balance your checkbooks regularly this should be a fairly easy exercise for you. Figure out your monthly expenses, including groceries, utilities, kids education, entertainment and financial payments. Now figure out how much you save in a month and the liquid savings you have in the bank. Using these numbers you should be able to come up with a decision as to how much you can spend and whether you require any extra financing. Remember that Car Financing is hard to obtain in Pakistan these days so it might be useful if you know someone in the Banking Industry.

If you do require financing, local Banks like MCB, UBL and HBL are probably your best shot. Processing fees are normally Rs. 4000.00 and most Pakistani banks do not finance used cars that are more than five years old. Down payment on the loan is normally fifteen percent with interest rates averaging 11 to 12 percent. You have to get the used car you're interested in buying appraised by an authorized dealer to decide the value of the loan. The easier thing to do initially is ask them for a ball park figure for your particular make, model and year (mention the mileage as well).

2. Decide on a Car Manufacturer and Model
The key to deciding on a make, model and year is the resale value of the car you're buying. Toyota, Honda and Suzuki are the most common manufacturers and often get the best resale value in Pakistan. Certain models are far more popular than others and hence, also get better resale value. Plan for the future and think when you're likely to sell your car and ask an auto-dealer in your city how much your car is likely to depreciate in that time period.

In Pakistan, the 2006 and 2007 Honda Civics are extremely popular, as are the 2005 and 2007 Toyota Corollas. Suzuki changes the shape of its cars less frequently in Pakistan and hence most models, especially the hatchbacks and coupes, are always in demand.

3. Choose your Car Features Keeping the Budget in Mind
Consider the engine capacity as this will largely determine your weekly fuel expenditure based on your daily running.The other related feature to consider is whether your car runs on CNG, Diesel or Petrol. Buyers in Karachi and Lahore often prefer CNG due to its lower per kilometer cost, as the distances are greater and the roads are more crowded.

Other features such as power steering, color, sun roof, luggage capacity can effect the price of the car substantially and need to be weighed against the financial implications of opting for these features. Avoid dark colors in Karachi as the dust tends to make the car look dirty in a matter of minutes and highlights flaws.

4. Research Used Cars for Sale Extensively
After deciding on the make, model and features you can begin to look for specific cars that match your criteria. My last article discusses where to look for used cars in Pakistan. Popular newspapers like Dawn and Jang have Sunday classified sections dedicated to used cars on sale in all major cities.

Online classifieds are also a great place to find a good deal. All you have to do is Google 'Used Cars for Sale Karachi' or the city where you reside and you'll find several listings with currents ads posted. I normally refer to the first two pages of the search results to find the sites with the most current and frequently posted ads. Don't assume you have found the right car after an hour or two. There may be even better deals if you search a few hours more.

5. Organize your Research
Be organized about your search from the start. Use a spreadsheet software or a piece of paper and make a list of the used cars you've shortlisted. Add columns for price, features, seller contact details, questions you want to ask, meeting times and dates and comments you may want to add after talking to the seller. The advantage of using online classifieds is that most of them allow you to save ads you've viewed in your area of the site for easy access at a later time. List cars by similar makes, models, year of manufacture and features. Being organized will help you compare prices easily and negotiate a good deal for one of the used cars you've listed.

6. Start Calling
Go ahead and start calling. Just remember to keep updating your list with newly negotiated car prices, meeting dates and times and any new details you discover along the way. Good luck and happy hunting.