The Ultimate Used Car Buying Guide
I buy almost everything used. And cars are no different! I’ve become a little bit of a used car buying pro over the years. I’ve bought 3 cars in my lifetime and all of them have been used. But even more importantly, I’ve loved each of them!
I’ve been fortunate enough that all of the cars that I’ve bought have been in great condition and I’ve had no problems with them at all. This is mostly because I’m more than a little obsessive over getting all of my information in order to make the best possible decision.
Why buy used?
- You’ll get a better deal. Brand new cars depreciate the second that they are driven off of the lot. Your new car loses 11% of its value when you drive it off the lot at the dealership. So that $30,000 car loses $3,300 in value before you’ve taken it home. And by the end of your first year driving, your new car has lost almost 30% of its value! Yikes!
- You’re likely to get more bells and whistles while staying in your price range. That brand new luxury car might not be in your price range, but the used model that’s 2 years old will be.
- Save money on car insurance. Car insurance for a used car is less than the cost of insurance for a new car.
- You still know what you’re getting. Through services like Carfax, you can learn a lot about the car that you’re buying. You won’t have to worry about buying a “lemon” without knowing it.
- Save money on registration fees and taxes. Since a used car is less expensive than a new car, these costs are also lowered a great deal.
Now that you’ve decided to buy a used car for your next car purchase, there are some steps that you’ll want to take to make sure that you’ve got the best car possible.
1. Know your price range!
Before you even start looking at cars, you need to figure out the budget. You need to figure out what you can and are willing to spend on a car.
You’ll also need to know:
- Are you going to be financing?
- Paying cash?
- Trading in your old car?
You’ll need to know what your budget is before starting your search. Set up a reasonable budget. If you’re financing, you can easily see how much you’ll be paying each month toward your car loan. You can even adjust how much you’d like to spend each month to see what your car budget should be.
If you find yourself thinking “I guess I can stretch and make that work,” lower your budget. Stretching yourself too thin is asking for trouble later on.
Figure out your budget before you even move on to the next steps. You can get your super easy budget planner here:
2. Know what kind of car you’re looking for, and plan for the car you’ll need in 5 years.
I’d love nothing more than a convertible. They’re fast, sporty, and such a blast to drive. But I have 3 children in car seats, a large dog, and 3 cats. Can you imagine if I had bought my “dream car” 5 years ago?! A little bit of foresight can go a long way.
Are you going to be starting a family in 5 years? Having another baby? Getting a Great Dane? If the answer is yes, getting the coupe that you want now (and are going to be financing for 5 years), might not be the best idea.
You can’t predict the future, but planning ahead just a little bit will save you a lot of headache in a year when you realize that the SUV was probably a better idea than the convertible.
3. Go to Edmunds.com and research.
On Edmunds.com, they do all of the researching legwork for you. How many passengers can a car hold, gas mileage, the cost to own, towing capability, cubic footage, the number of airbags, safety ratings, average price, comfort ratings, amenities, and more are all easy to find listed on Edmunds.
It also helps you compare different models of cars or different model years for the same car. Everything you might want to compare in a car, you can compare right there on Edmunds.
Find the answers you’re looking for, then make your list of your top 3 cars. Make sure they meet almost all of your needs and not just your wants.
4. Once you have found your top 3 cars you’d be interested in buying, start your search.
Now it’s time for the fun part: looking for cars! Here are the best sites to search fro used cars available in your area:
These sites will help you find cars for sale! And don’t overlook your local newspaper as a resource. You can also just start at Google to find used car dealerships in your area.
Remember to make staying in your budget your top priority! Don’t go looking at $30,000 cars when you have a $10,000 budget. You might be able to negotiate a lower price for a car, but not by THAT much. Finding a car that fits your budget is more important than finding one with a backup camera.
5. Go check out some cars.
Check them out, but do not buy them yet! Always test drive at least 5 cars from different dealerships. You might hate the way that one of the cars on your top 3 list feels once you get behind the wheel or the way that a car seat in the back makes you squished in the front seat.
You also want to check out different cars to make the dealership more willing to work with you on the price. An educated buyer is a salesman’s worst nightmare. That’s exactly what you want to be.
Before you go to the dealership, you need to know the Kelly Blue Book value of each car.
This is easy to find out on the Kelly Blue Book website, and you can include all of the features in each individual car (leather, heated seats, DVD player, etc.) to find out exactly what you should be paying for each car.
With each car you see, ask for the Carfax report. If the dealership says they don’t have it, ask them for it. If they try to tell you something like “Carfax reports cost money to print, so we don’t have them,” walk away. This has happened to me before and this usually indicates either a bad car or an unprofessional dealership.
Things to look for in a Carfax report:
- Service history: Was the car well maintained? Was it taken for oil changes and maintenance regularly?
- Ownership history: How many owners has the car had? Was it a rental car in the past? Was it a fleet car?
- Accidents: Has it had any accidents? Have there been airbags deployed? How serious was the accident?
Carfax will also give you a detailed report about how much less or more than the Kelly Blue Book value the car should be priced. If there has been an accident or a less-than-ideal maintenance report, the value will be less. But if it’s been well-maintained, has less than average miles, it will be valued at higher than Kelly Blue Book value.
After you’ve checked out each car at a few different dealerships, you can make the best choice for you, your needs, and your budget. You’ve done the research, know the cars, and can now move on to the next step.
It’s at this point where you can either go back to the dealership to buy the car, or you can wait for the eager salesman to call you and offer a lower-than-asking price.
6. Get your own mechanic to check out the car you’re serious about buying
Once you have your number one pick, ask the dealership if you can get it check out by your own trusted mechanic. This was, you’ll be able to have a professional tell you whether or not there are things to be concerned about with a car that you might not know about.
This is important! If you’re like me, all cars kinda look the same, and I wouldn’t know a carburetor from a muffler if you showed them to me. That’s why I take every car I’m interested into my trusted mechanic before even talking about buying it.
If the dealership won’t let you take the car to your mechanic, this is a red flag! Walk away right there, even if that was the number one car on your list. This is shifty and shady, to put it mildly. If there is nothing to hide, a dealership will have no problem allowing you to take your car to get the OK from someone who you trust.
Once you take the car to your mechanic, explain to them that this is a car you’re looking at to buy. Ask them to check everything out, from top to bottom. Then ask what they think you should pay for the car.
This is how important this step is: taking a car to my mechanic saved me from buying a car that had been in an accident that wasn’t reported on Carfax. This particular car had a clean Carfax, and was beautiful and met all of our criteria. I pulled the car into the lot, and my mechanic took me around to the driver’s side door to show me the difference in the paint that he noticed right away.
I would never have noticed it! He then went on to show me all of the things that had been replaced after being in an accident. The mirror was different, the windows weren’t stock… many other small things that all pointed to this car being in a serious collision at some point in the past. We would never have known about it if we hadn’t taken the car to our trusted mechanic.
If your mechanic gives the car a clean bill of health and the go-ahead to buy it, you know you’ve got a good car!
7. Make your purchase!
You’ve done your research, tried the cars, made the sales person sweat a little, and gotten a clean bill of health for the car, now it’s time to buy! At this point, you can rest assured knowing that the car that you’re buying is safe, worth the money, and most importantly, is a car that you’ll love for years to come.
Buying things used is a cornerstone of my life as a
cheapskate frugalista. I want you to get great deals when you buy used. My hope is that by following this used car buying guide, you can get everything that you want in a car while still staying on budget.
What’s your biggest tip buying cars?