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Things To Consider When Buying a Used Car (Guide)

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First explore all the options, then purchase an ideal used vehicle for you at the right price.

  • Make sure you know how much you can afford before selecting a used car to purchase.
  • Get your financing lined up before comparison shopping.
  • Don’t skip the test drive.
  • Consider protecting your investment with an extended warranty.

Even if you know exactly what you want, buying a used car is no simple task. Finding your ideal car at the right price takes patience and focus. And you’ve got plenty of competition, as reports that nearly 40 million used vehicles are bought and sold each year.
In this article, we’ll highlight a few crucial things to consider when buying a used car, including the possibility of attaining a used car warranty.

How Much Car Can You Afford?

The general rule of thumb is that monthly payments for an auto loan shouldn’t be more than 20% of a car buyers’ net pay. It’s important to remember that a used vehicle will require some extra maintenance. You might need to invest in new tires, new brakes, or to refresh the car in some other way. With that in mind, you may want to aim for a car payment that’s closer to 10% of your take-home pay.

Wherever you set your target price, be sure to stick to it. The last thing you want is to be strapped with payments you can’t afford.

Find Cars in Your Area

When it’s time to start searching for cars for sale in your area, you’ll have a few good options to look into. You might find the ideal car for your needs at a franchised dealership that sells both used and new vehicles. Late-model trade-ins are often sold by these dealers. Branded dealerships also have repair facilities of their own.

Used car dealers will generally offer older cars with higher odometer readings. You’ll mostly find vehicles that are sold “as is” at these locations, although some will sell limited warranties to offer some reassurance in case of future issues.

There are also private sellers who list their cars for sale online or through other means. You might get a great deal from someone selling their car on their own, but make sure to get copies of the vehicle’s service records and original purchase paperwork.

Determine a Fair Market Value for the Vehicle

After you’ve zeroed in on a few specific makes and models of vehicles, it’s time to consider a car purchase price that you will be satisfied with. Many factors come into play when considering a specific car’s value, including the year it was manufactured, the wear and tear on a vehicle, if it’s high- or low-mileage, and whether many others are looking for a similar model.

There are several ways to research fair market value. One way is to look through digital or print classified ads and scour local dealership listings, noting the prices of similar vehicles in your area. You can also tap into resources like Kelley Blue Book, which allows you to easily search for used car values online.

Don’t Forget the Vehicle History Report

When you find the used car you’re interested in, be sure to get a vehicle history report so you know exactly how the car was treated by previous owners. If there are any red flags – like if the car has been declared a total loss by an insurance company – it’s best to know early in the car shopping process.

Good options for accessing these reports online include CARFAX and AutoCheck. You just need the vehicle identification number (VIN) or license plate number to get this essential information. Most dealerships will offer these reports free of charge for cars in their inventories. Private sellers and other used car dealers will likely require you to pay for those reports.

Explore Your Financing Options

Unless you plan to pay for your used car in cash, you’ll need to finance your purchase. To get the best interest rate on your car loan, we recommend shopping around with different lenders. Once you have approval, you’ll be better equipped to stay within your price range and negotiate the final price of the car.

With your financing in place, you might want to check out our guide on the best times to buy a used car. You may be surprised by your buying power during certain times of the year.

Test-Driving Is a Must

You can usually only tell if a used car is right for you by test-driving it. Getting behind the wheel and focusing on the feel of the vehicle on the road is vital. Here are a few key things to pay attention to during your test drive:

  • Overall comfort: Make sure you like the way the car drives and that you have plenty of room inside. Also be sure the seat and steering wheel are easily adjustable.
  • Visibility: Check that the rearview and side mirrors are in good condition and for blind spots.
  • Brakes: Brakes should be responsive and free from any concerning noises.
  • Signs of leaks: Look under the hood and under the car after your test drive. If you see anything leaking or smell burning oil, you know something needs to be addressed.
  • Tires: Visually inspect the tires to see how old they are. Get a feel for the car’s overall balance when driving as well.

Combined with a vehicle history report and service records, a test drive should give you more than enough information to feel comfortable moving forward with the car buying process.

An Inspection Adds Peace of Mind

You should have a used car inspected by a mechanic you trust before buying it. When buying a certified pre-owned (CPO) vehicle from a branded dealership, the car has already been thoroughly inspected. With any other used vehicle seller, you’ll want a pre-purchase inspection.

If you don’t have a go-to technician, check out some online reviews to find a good option in your area. You’ll probably pay between $100 and $200 for the inspection. Whether the car is in great shape or any issues are found, it will be well worth the investment. If a problem pops up but you’re still interested in the car, you might be able to negotiate a lower price.

Finish the Paperwork

Once you’ve agreed to a fair price, it’s time to sign the paperwork and close the deal. If you’re buying from a branded car dealership, this process is pretty straightforward. Keep in mind that a salesperson might offer you additional service plans and extended warranty options.

If you’re buying from a private party, you’ll have a few more steps to complete. Make sure the seller transfers the car title and registration to you in the proper way. The rules that govern these transactions vary from state to state, so it’s a good idea to check with your local Department of Motor Vehicles (DMV) before closing the deal.

Of course, you also need to make sure you have car insurance for your new purchase before you drive it home. If you don’t already have coverage, look into the best car insurance companies.

Protect Your Investment

Unless the car you’re buying is still under its manufacturer’s warranty or is a certified pre-owned vehicle with protection built in, you might want to buy an extended warranty. Our list of the top used car warranties will help you choose the best plan for your needs. If you purchase a high-mileage vehicle or want to keep your used car well into the future, check out our list of extended warranty providers for cars over 100,000 miles.

Things To Consider When Buying a Used Car: FAQ

What are five things you should think about or do when you buy a used car?

Five things to think about when buying a new car are deciding how much car you can afford, getting your financing squared away, test-driving any car you’re interested in, getting the car inspected, and negotiating a fair price.

What is the most reliable high-mileage car?

You’ll find a lot of support for various brands, but you can check out our guide to the longest-lasting vehicles on the road today to help you find a reliable used car for your unique needs.

*Data accurate at time of publication.