Used Car Purchasing Tips

Follow these helpful steps for buying a pre-owned vehicle.


Saving money might be one of the few things that are better than that new car smell. Consumer Reports estimates that consumers can save as much as 32 percent in the first five years by buying a three-year-old car instead of a new one. If luxurious interiors and other expensive amenities are beyond your price range, purchasing a used car with all accessories included might make them more affordable.  Research of the used vehicles that interest you can lead to purchasing a car that leaves you smiling all the way to the bank.



Step 1 - Budget according to your needs.

Make a budget to help you determine how much you can afford to pay. The Federal Trade Commission recommends that you consider your needs and driving habits to help decide what type of vehicle fits your lifestyle. While you might want that cute little sports car, if you have a family, it's probably not a practical choice.


Step 2 - Keep tabs on your credit.

Check your credit report if you plan on borrowing money.   Look for any errors and, if necessary, contact the reporting company and ask that it removes the negative reports. Lenders use your credit score to determine if they will accept your application and what interest rate you will pay on a loan.


Step 3 - Spend time researching cost.

Visit NADA and Kelley Blue Book to research prices of the makes and models that interest you. Reading the reviews on the vehicles you are thinking about might help you narrow your focus to one or two particular models.


Step 4 - Determine your financing details.

Decide how you are going to pay for the vehicle.  Using a bank or credit union for financing gives you more control of the transaction. While you might be able to finance through a dealer, prearranging financing through a financial institution helps prevent going over your budget and allows you to purchase from any dealer or private seller.


Step 5 - Shop around.

Start shopping for your car. Visit dealerships, shop on Craigslist and read your local newpaper's classified section. While private sellers often price vehicles less than dealerships, most sell their vehicles "As Is," meaning that you have no recourse if something goes wrong with the car. A dealership might offer an extended warranty that covers mechanical problems that could arise.


Step 6 - Get the facts on your vehicle's history.

Order two or more car history reports from and other vin report sites before committing to the purchase. Test drive the vehicle, looking for acceleration or braking issues, and listening to the engine noise and for squeaks. View the service records for the car and ask if you can have a mechanic inspect it.


Step 7 - Don't be afraid to negotiate.

Negotiate the price of the car. Use the prices you found in your research to make an opening offer that, while low, is still in the price range of the vehicles you looked at. Negotiations might take as long as an hour, but if you see that you and the seller are not going to agree, walk away.


Step 8 - Bring payment to the table.

Pay for the vehicle. Private sellers typically expect cash, so you will need to visit your bank to get the money or arrange a wire transfer. If you prequalified for the loan, you must sign the loan contract, otherwise you will have to apply for a loan and wait for the bank to accept your application before you can complete the purchase.


Step 9 - Read the fine print.

Read the contract carefully if you are using dealer financing. Question any charges stated in the contract that you weren't expecting, you can also negotiate over these charges. Make sure the dealer performs any necessary repairs to the vehicle or arranges to do so before you finalize the transaction.


Step 10 - Insure and register your new vehicle.

Add the vehicle to your insurance and visit your local tax office to register the vehicle.