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How to a Buy Used Car: Expert Tips You Can’t Pass Up

Family collecting new car from lot

Buying a used car can be tricky if it’s your first time. Learn how to navigate the process with this article. Our comprehensive, step-by-step guide explains how to buy a used car so you can avoid some common pitfalls.

Set Your Budget

Your first step in the car buying process isn’t to jump online for some window shopping. First, set a budget and then decide if you’re going to pay in full with cash or if you need to apply for financing. Even if you choose to buy the car upfront, you’ll still need to factor in money for associated costs like insurance, registration, and a new set of fuzzy dice.

If your nest egg isn’t large enough to purchase your new, used car, check out an online loan calculator to start running the numbers. Stick to a monthly payment that’s 20% or less of your take-home pay. For example, if your paycheck after taxes adds up to $5,000 a month, you don’t want to spend more than $1,000 monthly on your car payment.

Most dealerships ask for a 10% down payment, too. Of course, if you’re shopping for a luxury model, like a Mercedes Benz, you’ll pay more for everything, even insurance and maintenance costs. So remember to look at both your monthly expense and the total amount you’re willing to spend on a set of wheels.

In today’s unusual market, you may want to consider a model that’s older or has more mileage than planned in order to stay on track with your financial goals. The good news is that you can find a reliable car for less than $10,000. Consider contacting your bank for a preapproval offer, too. Showing up at the dealership with financing in hand puts you in a terrific negotiating position. If the dealership’s network of lenders comes up with a better offer, opt for that.

Do Your Research

Shopping for a used car can feel like a treasure hunt because there are so many options out there. So how do you narrow down your choices? Research. According to J.D. Power, one of the most dependable used sedans on the market today is the 2019 Toyota Corolla. Taking the time to read up on your top models leads to uncovering appealing information like this.

Write down a list of everything you’re looking for in your next new-to-you car and think about how you’ll use it. For example, if you like camping, you’ll need plenty of cargo room. If you have a large family, you might need seating for seven. For shoppers who prioritize safety, check out the Insurance Institute for Highway Safety for crash test ratings on your favorite models.

With the increased demand for used cars, prices are up to 40% above traditional market values. It’s more important than ever to be patient and look. You can still find a good deal, though, and with pricing resources available at your fingertips, you’ll know if the price in the window is fair.

Visit the Dealership

Schedule an appointment at the dealership, so you don’t have to wait for a salesperson to notice you once you arrive. You can also let them know which vehicles you’re interested in test driving, so they can have them out front and the key on hand. Before you climb inside, visually inspect the car for imperfections and potential problems, such as:

  • Underside rust
  • Fluid leaks
  • Dents or scratches
  • Tire tread
  • Cracked windshield

Take a Test Drive

Now that the vehicle’s exterior passed your visual inspection have a seat in the cockpit and give it the sniff test. If you smell mildew or other foul odors, consider passing on that vehicle as it could mean water damage. Now, turn every knob and flip each switch, from the turn signals to the radio. Are there any warning lights on the dash?

Once you ensure all the controls and settings work as they should, get a feel for the cabin. Is it attractive and comfortable? Can you see yourself driving it daily? Now, start up the engine and hit the road. You’ll want to be aware and look for these signs during your test drive:

  • Smoke or burning odor
  • Abnormal vibrations
  • Engine rattles or ticks
  • Transmission whines
  • High-temperature readings
  • Jumpy, sticky, or loose brakes
  • Jolting acceleration

Check the Vehicle History Report

After your test drive, you should be able to narrow down your choices to one or two potentials. Now you can ask the dealership for a copy of the vehicle’s history report. Several companies offer this service, and most dealerships are happy to provide it for free.

Some used car horror stories revolve around mechanical defects and salvaged titles. This report can help alleviate — or substantiate — your concerns. Read through the report’s entries to see if it was in an accident and whether or not previous owners had it serviced regularly. You can also opt for a comprehensive mechanical inspection before you sign on the dotted line.

Negotiate the Deal

While this is the step most used car buyers dread the most, closing the deal doesn’t have to be complicated. You’ve already done your research, and you have a preapproval letter from your bank. It’s ok to let the dealership make you a financing offer, as it could be better than your bank’s loan.

Feel free to wander around the showroom while your salesperson “talks with his manager.” This habit will help you keep your cool. Take as much time as you need to read the contract and all the fine print. There are many forms to review during this process, and there’s no hurry.

You want to make sure you understand how much your total cost will be, including tax, dealer fees, and interest charges at the end of the loan. Review each document for accuracy and ensure your information on the title application is correct. You’ll also need auto insurance before you can drive off the lot.

Take advantage of these pro tips and find a reliable pre-owned vehicle at an affordable price. With a bit of diligence, you’ll drive home in a quality used car — and your peace of mind.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.


About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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