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How to Buy Used Cars

There's a right way and wrong way to buy a used vehicle; learn how in this article...

Buying Used Vehicles

There's a lot to be said for buying a brand-new car. The fabled "new car smell" alone is enough to make just about anyone woozy. Still, there are considerable drawbacks to buying new too, and the biggest one is financial. No matter the price, make or model of new car, it WILL depreciate substantially as soon as it is driven off the lot. Since the recession, more and more people have been turning to used cars. The way many car buyers see it, used cars may not literally be new, but they are new to them.

Choosing the Right Used Car for You

As with buying a new car, a lot of thought and consideration should be used when purchasing a used car. If anything, even more care should be taken when buying a previously owned car. After all, used cars could harbor all kinds of hidden issues. A seemingly good deal could turn out to be nothing more than a money pit, so extra caution is definitely in order.

Why Buy Used?

It's difficult to resist the allure of a new car, but there's a lot to be said for used vehicles as well. The biggest advantage is financial. Used cars cost a lot less. Even if a car is just a few years old, it will usually cost thousands less than it did when it was new. Many cars are built to last, so it's not too difficult to find used cars that are still in great shape. Finally, buying used is a great way to keep old vehicles out of the junk heap.

How Much can You Spend?

Before your search begins, figure how much you can afford to spend. You can just as easily get a loan for a used car as you can for a new one, but focus on the total price rather than the monthly payment amount. Never divulge the maximum amount you can afford per month to the salesperson, either, or you are sure to get raked over the coals. Prior to stepping foot on a single used car lot, use an online calculator to figure out how much you can comfortably afford. Remember that you'll also need extra money to maintain the vehicle and to pay for gas and insurance.

Narrow Your Vehicle Type

Your search for a used car will be easier when you restrict it to a certain type of vehicle. Which type of car makes the most sense for you? If you have kids, a crossover or minivan is probably best. If you usually fly solo, a smaller car should work well. If you're not sure, check out a few different types of cars to see which one appeals to you the most.

Used Car Reliability

Like most people, your biggest concern about buying a used car probably concerns reliability. The last thing you want is to invest in a used vehicle and to have it break down shortly thereafter. Some cars have better track records for reliability than others. Do some research to find out which manufacturers have the best reputations. Honda, for instance, is known for producing cars that last and last.

How to Avoid Buying a Lemon

People often assume that lemons are strictly new cars, but that's not the case. The true definition of a lemon is a vehicle that has serious issues that weren't apparent at the time it was sold. Therefore, used cars can be lemons too. Fortunately, there are steps you can take to avoid inadvertently buying a used lemon.

Car History Reports

The first and most logical way to avoid buying a used car that's really a lemon is by purchasing a car history report. Only do this if you are leaning toward buying a used car; if you do it for every car you consider, you'll end up spending a lot of money. On the other hand, you can sign up for unlimited reports as well. Either way, just input the VIN of the used vehicle to see how many incidents it has been involved in through the years. Incidents may include major repairs and accidents.

How to Spot a Lemon

Let's say the car history report reveals nothing out of the usual. The car you're considering could still be a lemon. If the car is being sold "as-is," the seller could be trying to unload a bad car. Selling a car "as-is" is actually illegal in many states, so avoid these like the plague. Examine the car closely for signs of damage and for signs of major body work. Look under the hood for signs of fire or other catastrophic issues. Do an online search to find out if any recalls have been issued for the used car, and always have it inspected by a qualified mechanic to avoid ending up with a lemon.

Inspecting a Used Car

Inspecting a used car is about more than giving it a quick once-over. Definitely examine its exterior, but take a close look at the interior too. Always check under the hood as well. The most telling thing will be taking it for a spin. As you test drive a used car, listen closely for strange sounds. Pay attention to how the car handles on the road. How responsive is it? Does it brake quickly? Does it seem safe?

Beware of Flood Cars

All too often, unscrupulous people try to unload cars that have been seriously damaged in floods. Just because a car is dried out doesn't mean it's emerged unscathed. Corrosion often continues for a very long time after a car has been submerged in the water. As a result, serious issues may not crop up until much later. The most telltale sign of a flood car is odor. If you smell a moldy, mildewy odor in the car, cross it off the list.

The Problem with Rebuilt Cars

Rebuilt wrecks, or salvage vehicles, are often sold for rock-bottom prices. As a result, they're often extremely attractive to people who have limited budgets while shopping for used cars. As with lemons, people often aren't forthcoming about the fact that they're selling salvage vehicles. Common signs of a rebuilt car include doors and trunks that don't shut properly, silt and other debris in the trunk, inconsistent welds, frayed safety belts or melted fibers on a safety belt and uneven tread wear.

How to Get a Good Deal

Now that you know what not to look for in a used car, you're probably wondering what you should actually focus on during your search. The main thing to keep in mind is that you shouldn't rush through the process. It's going to be a major purchase, and you will probably be stuck with whichever vehicle you buy.

How to Get a Used Car Bargain

The first step has already been highlighted here, but we'll repeat it for emphasis: Figure out how much you can afford. If you can't buy your used car with cash, arrange financing before you go to the lot. Be open to different cars in the same class; if you're too focused on one particular type of vehicle, you may be talked into paying more than you should. Once you've found the right car, negotiate the price. If you're not skilled or comfortable with negotiating, bring along someone who is.

Types of Used Cars that will Save You Money

For an exceptionally good deal on a used car, be sure to consider program cars, rental cars and salvage titles.

  • Program Cars - These are cars that have strictly been owned by the manufacturer and used for limited periods of time by employees. They're usually sold before reaching 10,000 miles and tend to have been very well maintained.
  • Rental Cars - Some used car lots specialize in rental cars. While it's true that some renters abuse their vehicles, the truth is that rental car companies take excellent care of them and usually sell them when they're about a year old.
  • Salvage Titles - Buying a salvage title car can be risky, but it can also be a great way to get a rock-bottom price for a terrific car. Have the car inspected extensively by a qualified mechanic before sealing the deal.

Why Consider Certified Pre-Owned Vehicles

Many dealerships offer certified pre-owned vehicles, and you might want to consider one if you're in the market for a used car.

What is a Certified Pre-Owned Vehicle?

A certified pre-owned vehicle is a used car that has extra warranty coverage above and beyond what it had when it was new. In other words, the dealership offers a warranty on the vehicle, so you enjoy extra protection when making this type of purchase. The warranty is confirmed and backed by the original manufacturer, so this is a nice compromise between buying a new car and buying a used one.

Pros and Cons of Certified Pre-Owned Vehicles

There are several advantages to buying certified used cars, but two stand out the most. First, they're been inspected, repaired and warrantied, so you get significant peace of mind. Second, they don't depreciate the way new cars do.

On the flip side, there are drawbacks to buying certified pre-owned cars. First, you pay more for the peace of mind that was touted above, and there's no reason you can't have any used car inspected, repaired and warrantied. Second, you're still buying a used car, so there will be wear and tear.

How to Buy a Certified Pre-Owned Vehicle

Follow these steps when buying a certified pre-owned vehicle:

  • Stick with manufacturer-certified vehicles. They have better terms and warranties than dealer-certified vehicles.
  • Check local dealer inventories online to zero in on one that has certified pre-owned vehicles you want.
  • Ask for the inspection report of any certified pre-owned vehicle that you consider. Make sure the VIN on the report matches the VIN of the vehicle.
  • Take the car for a test drive. Look and listen carefully for signs of trouble.
  • Negotiate the price. Don't just pay whatever is asked. Arm yourself with plenty of information about the make and model to get the best deal possible.
  • Get proof of warranty before signing the purchase contract. Once the deal is done, you'll be out of luck.

How do Certified Pre-Owned Warranties Differ?

There's more than one kind of certified pre-owned vehicle warranty, so always read the fine print. Dealer-certified pre-owned cars can usually only be serviced at the dealership where they were purchased while manufacturer-certified vehicles can often be serviced across the country. Some warranties consist of whatever is left of the original powertrain warranty plus limited-time bumper-to-bumper coverage while others are completely new warranties with bumper-to-bumper coverage. Most warranties include roadside assistance, but the length of that particular coverage varies.

Certified Pre-Owned versus Extended Service Contract

There's a lot of confusion out there about certified pre-owned vehicles and extended warranties. True certified pre-owned cars have been rigorously inspected according to the strict terms of the manufacturer, and they must meet certain criteria regarding things like condition and mileage. With an extended warranty, you pay an extra price to have "warranty coverage" added to your used car. However, this isn't a true warranty because real warranties are included in the price. There's nothing technically wrong with buying an extended warranty, but you're more likely to get a top-notch used car when you buy an actual manufacturer-certified pre-owned vehicle.

Ask the Right Questions

Whether you're buying a car from an individual or at a dealership or used car lot, always ask these questions to avoid trouble:

  • When was the last time you sold a used car?
  • How many miles does the car have?
  • How much are you willing to sell the car for?
  • Has the car always been located in the same state?
  • How long can I take it out for a test drive?
  • What type of oil has been used for the vehicle?
  • May I have the car inspected by the mechanic of my choice?
  • Who owned the car before you?
  • How would you describe the condition of the vehicle?
  • Why are you selling the car?

Pricing and Financing

The first step to effectively pricing a used vehicle is having a clear idea of what it's worth. The easiest way to come up with an estimate is by checking its Kelley Blue Book value online. You will just need the make, model, condition and mileage of the used car.

There are also online resources that will let you know how much others have been paying for the car in question. You can also search online to see how much others are selling similar cars for in your area.

The next step - and probably the most crucial one - is negotiating the price of your used vehicle. This is where many people go awry. Most people don't negotiate prices very often, and many are downright uncomfortable with it. As long as you've armed yourself with the right information, though, you should find the negotiation stage to be quite easy. Simply present your evidence as needed until you get the price you want.

Sales Tactics & Avoiding Used Car Scams

If car salespeople have shady reputations, used car salespeople have even shadier ones. A few tactics to be on the lookout for while shopping for a used car include:

  • Trade-In Scam - You may be offered a great price for your trade-in, but you'll be charged way more than you should for your used car.
  • Pressure Tactics - If you're being pressured into buying a particular car, walk away.
  • Hidden Fees - Avoid unpleasant surprises at signing by asking the salesperson to clearly outline all of the fees.
  • Monthly Payment versus Total Price - Don't base affordability on the monthly payment. The dealer can simply spread out a more expensive price over a longer period of time to get you the payment you want.

Outright scams are also sometimes used by people who are selling used vehicles. Odometer fraud is of particular concern, and the only real way to avoid it is by paying for a vehicle history report. Title washing, which is often used to hide salvage title vehicles from unsuspecting buyers, is also a common ruse, so look at the title carefully. VIN cloning is used to cover up major issues. The best way to avoid it is by confirming that the same VIN appears on the frame, side doors, dashboard and paperwork.


As you can see, a lot goes into buying a used car. At least, that's the case for those who want to get the best deals on the most reliable vehicles. It may be annoying to do the extra work, but it will more than pay off in the long run.

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