How to Buy a Used Car

Other than a house, a car is one of the biggest purchases that you will ever make. Therefore, it’s a good idea to take some time to educate and prepare yourself before you run out and purchase a vehicle. By avoiding the impulse to buy right away, you will be able to save yourself money and ensure that you get a quality vehicle.

One important fact to consider is that because cars almost always lose value as soon as they leave the dealer’s lot, it may be a good idea to purchase a used car instead of a new car. You need to remember that just because a car is used does not mean that it is old or in bad shape. In fact, you will probably be quite surprised at the quality of used cars that are available, and how much less they cost than a comparable new car.

Instructions

1. Before you start thinking about the type of car you want or begin doing any shopping, you need to determine how much you can afford to pay for a used car. Although this may seem quite complicated to do, the Motley Fool has a great free calculator that makes it fairly easy to find the price range that your budget can handle.
2. When you are determining your budget, keep in mind that you also need to factor in the following costs: insurance (which can vary greatly depending on where you live, your personal driving history and the type of vehicle you purchase), gas, maintenance and repairs (as a rule of thumb, you can expect to spend between twenty-five and one hundred dollars per 3,000 miles, and between four hundred and fifteen hundred dollars every other year), registration, and depending on where you live, parking.
3. Once you have created a budget for yourself, you can start looking for used cars that fit into your price range. The following are all potential sources for purchasing used cars:
   • Used Car Dealers: The most common source for buying a used car. Most used car dealers sell their cars at lower prices than new car dealers who are selling trade-ins. They also normally offer different financing options and warranties.
   • New Car Dealers: While new car dealers will normally charge more for a used vehicle than a used car dealer, new car dealers are usually the best option if you are interested in getting a certified pre-owned vehicle. Like used car dealers, most new car dealers also offer financing options and warranties.
   • Private Owners: Although it may take more time, private owners can have a great used vehicle for sale. While you will probably be able to get a used car at a lower price from a private owner, you will normally have to pay the full price upfront (and will not be able to obtain a warranty).
   • Rental Car Companies: In addition to renting cars, most major rental car chains also sell the older models of cars in their fleet. While they almost always only have vehicles with basic options, rental car companies can be a good option for getting a well-maintained vehicle that is only a couple of years old.
   • Online: Although the Internet can be an invaluable resource for tracking down cars from the other four sources and performing research, it is generally not recommended to purchase a vehicle that you haven’t been able to inspect in person (such as purchasing a vehicle from eBay). While it may seem like you are getting a great deal, it can be hard to be one hundred percent confident that you are getting a quality vehicle.
4. Regardless of which of the five sources you use to find a vehicle, once you find one that looks good and fits within your budget, you will want to get a hands-on experience with it. In addition to test driving the vehicle to see how it runs and how you feel behind the wheel, you will also want to check the following elements of the car: under the hood, inside the car and around the vehicle. As you are evaluating the car, look for surface damage, rust, leaks (or evidence of leaks), performance issues (such as power locks or windows that don’t work) and any other issues that stand out and catch your attention.
5. If you find a vehicle that you feel comfortable test driving and it appears to be in good condition when you evaluate it, you should obtain a vehicle history report for it. You can obtain a vehicle history report from Carfax for around twenty dollars, and it will provide you with detailed information about the vehicle (including whether or not it has been in any accidents).
6. Once you have checked out the vehicle’s history report, if you are still interested in the car, you should have it inspected by a mechanic. This will only cost between fifty and seventy-five dollars, and the mechanic will be able to alert you to any problems that you missed during your own evaluation. Paying less than a hundred dollars to have a mechanic inspect a vehicle can alert you to issues that could cost you thousands of dollars down the road.
7. After the mechanic inspects the vehicle, if you are ready to make an offer, you should research the actual value of the car. By using the Internet, you can compare the value of the car at various sources, and determine a price that is fair. If it is lower than the seller’s asking price, as long as your asking price is fair, don’t be afraid to present it to the seller (you should also show the evidence of how you came to that price).
8. If you and the seller are able to successfully negotiate a deal, the last steps of the buying process are putting the deal in writing, making the payment for the vehicle and getting the title to the vehicle. Once the seller signs the title of the car over to you, you are officially the new owner of that vehicle!