If you’re looking for a top-quality vehicle without a high price tag, buying a used car can be a good option. Shopping for your new car can be exciting, but you’ll need to put in some work if you don’t want to be stuck with a lemon.
An excellent place to start is to check a vehicle’s safety rating, recalls, and complete history report. As well as your online research, you should also compile a checklist of the features you want in your car and line up a mechanic who can perform a full inspection before you sign on the dotted line.
The Pros and Cons of Buying a Used Car
One of the biggest perks of buying a used car has to be the sticker price. It will be much lower compared to a brand-new car. Its lower value will also mean it costs less to insure against physical damage.
On the flip side, a used car is going to be older than a new car which tends to mean fewer features and older safety equipment.
When it comes to choosing between a new and used car, consider your budget and what you want from your next ride.
Things to Look for When You Buy a Used Car
You need to keep your eyes wide open when you’re buying a used car. There are lots of things you need to be aware of, but the following used car buying checklist will help you choose a used car that’s right for you.
Buying a Used Car Checklist
The following “What to Look for When Buying a Used Car Checklist” should make things easier for you.
Set a car-buying budget you can afford
Affordable monthly payments are an important consideration, but you need to look at the bigger picture when buying a used car.
You want a proper idea of the total cost of owning the car. Such a figure includes the interest on your car loan, insurance costs, parking, fuel, and maintenance costs.
Ideally, you want to find the sweet spot between the cost to buy and the cost to own. For example, buying an older car might mean a lower price, but is more likely to require costly repairs. An awesome deal won’t be so great if you find yourself stranded on the highway waiting for a tow truck.
Find the right used car
Shopping for and then finding the right car is more of a challenge than finding and buying a new car. Once you know what you want, you’ve then got to find one that’s for sale. It also needs to have low mileage and be in relatively good shape. A good service history is something else that’s essential.
Basically, you’ve got a lot more research to do when it comes to evaluating a three-year-old pre-owned car than for a brand-new car that’s sitting on the dealer’s lot.
A good jump-off point is with used car rankings and reviews. You’ll find plenty of resources online including this one from USNews.com. When you check used car rankings you can compare pre-owned vehicles by overall scores as well as individual factors. Some of the factors you might want to consider include safety, interior comfort, features, performance, and reliability.
Take into consideration the following when comparing vehicles:
- Fuel economy
- Safety ratings
- Cost to insure
Is certified pre-owned the best option?
One option you should consider when buying a used car with no warranty coverage is manufacturer-certified pre-owned cars (CPO cars). Buying a CPO means you’re getting used-car affordability and at the same time the peace of mind that comes with manufacturer-backed warranty coverage.
CPO cars tend to be low mileage and are just a few years old. Typically they’ll have service records and zero history of accidents. Quite often, they are cars that have been returned at the end of a lease, dealer or automaker staff vehicles, or dealership service loaner vehicles.
It’s worth pointing out that CPO cars tend to be more expensive because of the warranty coverage and other perks. However, it will likely have lower total ownership costs.
Look for affordable financing
If you’re sitting on a pile of savings, you won’t need to worry about financing. However, if you’re like many used car buyers, you’ll need a loan to help you purchase your used vehicle. Step #4 in this “What to Look out for When Buying a Used Car Guide” concerns all things financing.
Allowing the dealership’s finance office to arrange your financing is one option, but if you want to save money, get a pre-approved financing offer before you set foot inside a car dealership. Arming yourself with a pre-approved loan will give the dealer something to aim for and you’re giving them the incentive to do so.
If you’re buying privately, however, there is no option other than to arrange your own financing. It’s a slightly different process from getting a new car loan and there are some important differences.
Lenders generally consider used car loans riskier, so expect to pay a higher interest rate. However, if the used car is relatively new or it’s a certified used car, there’s a chance you’ll find a lender offering the same terms they would offer a new-car buyer.
Decide where to buy your used car
There are many avenues you can explore when you’re looking for a used car. Let’s give you a few examples:
- Franchised new car dealers: Prices tend to be higher but they do offer a seamless purchasing process
- Used car superstores: These tend to offer many of the advantages of franchised new car dealers but have access to a vast selection of used cars.
- Independent used car dealers: These are typically small, locally-owned businesses. They buy and sell used vehicles, can arrange financing, and will take care of the paperwork.
- “Buy here, pay here” dealers: This is one option you should approach with caution. They act as the car seller and lender and are typically the lender of last resort for people with bad credit history. Aggressive collection practices and vehicle repossessions are common.
- Private-party sellers: This is the term used when you buy a car from a person or business that is not in the business of selling cars. Private-party sales are generally unregulated so you don’t enjoy the same consumer protection laws you’d get at a licensed car dealership.
Finding your used car
Gone are the days of trawling newspaper classified ads, cruising shopping mall parking lots, and visiting one car lot after another.
Nowadays, you can find almost every used car that’s for sale somewhere online. A popular place for private sellers is Craigslist. In addition, there are eBay Motors, Facebook Marketplace, and Nextdoor.com.
You don’t have to restrict yourself to the local area either. Thanks to car shipping services such as those offered by USTrans.com, you can purchase your dream used car from across the other side of the country and have it shipped to your door.
Inspect the interior and exterior of the car
Once you’ve found your dream used car, there are some hands-on things you need to take care of. Some of the following you’ll be able to do virtually which reduces the amount of time you need to spend at the dealership.
Before you buy a used car, give it a quick visual inspection. If you’re making the purchase remotely, ask the seller or dealer to give you a video tour of the vehicle.
Buying a car is a big investment so don’t rush yourself. You’ll find some of the things to look for in the following used car inspection checklist:
- Check the body: You need to look for gaps, dents, discolored paint, and other imperfections.
- Inspect the windows: Check for cracks and chips. Also, check the tires for uneven wear, and the tailpipe for any black grease as this could indicate a problem.
- Get underneath the vehicle: You might have to get your hands dirty for this one, but it’ll be worth it. Check the underbody and wheel wells for rust.
- Check the doors: These should work well and show no signs of rust.
- Look under the hood: You’re looking for obvious signs of wear. There should be no fluid leaks making the engine block dirty. Check the oil to make sure it’s not murky. Inspect the transmission fluid levels. Rubber hoses and belts shouldn’t be super stiff or cracked.
Take the car for a test drive
Taking the car for a test drive is critical, although it might be challenging if you’re buying the car online. Nevertheless, ask the seller if they’re willing to take it out for a spin while on a video call with you. Make a note of the following pointers in our used car test drive checklist.
The following used car inspection checklist will give you some tips on what to check.
- Listen for strange sounds: Any unusual noises or sounds coming from the transmission, brakes, or engine should be checked out by a trusted mechanic. If the transmission is rough, consider this a red flag.
- Check for any water damage: If the interior smells musty, it could be an indication of flood damage or possibly leaky windows.
- Check the A/C: This might be difficult to check virtually, but if you’re taking the car for a test drive, make sure it cools quickly and warms you up.
- Electronic tests: You want to make sure the brake lights and headlight work properly. The windows should go up and down all the way. The usual dashboard instrument lights should light up when you start the car.
Determine a fair purchase price
It’s a good idea to check you’re being charged a fair price for the car. You can do this by comparing prices for the same make, model, and year online. You can compare dealer prices online. In addition, consider using online tools such as KBB and the National Automobile Dealers Association Guides. Condition and mileage play a key role in the price of a car, but you’ll be able to determine a good ballpark figure of a car’s market value.
Do your research
You can find a lot of useful information to help you decide on your purchase. For example, look up the VIN and review the vehicle history report.
The VIN reveals a lot about a car. Check whether there are any recalls on the vehicle by visiting the National Highway Traffic Safety Administration (NHTSA). Also, see if the vehicle requires repair because of a safety recall. However, bear in mind that you might not be able to check information on older vehicles and certain brands and international vehicles might not be listed.
In the vehicle history report, you’ll be able to see any title problems, service points, previous accidents, and ownership history. You can purchase a vehicle history report online, but there is a fee.
Make a deal and complete the paperwork
If all the checks you’ve made aren’t raising any concerns, it’s time for you to negotiate a deal, set a purchase price, finalize the sale, and complete the paperwork.
Consider add-ons, insurance, and warranties
You’re almost at the finish line with this checklist for buying a used car. Just a couple of final hurdles to get over.
If you’re buying from a dealer, it’s likely they’ll barrage you with offers for add-on products. These will range from a variety of vehicle protection products such as upholstery sealants and pain, to extended warranties and gap insurance.
Before you accept any of these, do your research. You should be able to purchase the same products outside of the dealership at a much better price.
It’s been a long journey, but you’re now the proud owner of a used car. Make sure you maintain it properly and take the necessary steps to protect its value.
We hope you’ve found our checklists helpful and enjoy many years of happy driving. The points we’ve made are equally valid, even if you need a checklist for buying a used car from a private seller rather than a dealer.
Also, don’t forget, if you ever need to ship your car, we’re always on hand to provide a stellar auto transport service.