What to consider when buying a used car

The condition of a used car should be a top concern. But knowing where to look and what to consider can also help you make an informed decision on your next ride.

9 used car buying tips

1. Start with a budget. Calculate how much you’re able to afford upfront and monthly to narrow down your car search.
2. Set realistic expectations. If you’re working with a small budget, you’re more likely to find a good deal within your price range if you look for cars that are over 10 years old or have over 100,000 miles.
3. Research make and model. Look online to compare models and makes and narrow it down to a few choices that suit your needs. Knowing the current prices makes it easier to know if you’re getting a good deal when you buy.
4. Know where to look. Head online before you head to a car lot. Craigslist and eBay are good places to shop for inexpensive cars in your area — and there are plenty of lenders that offer private party auto loans.
5. Consider maintenance costs. Used cars might require more repairs than old cars — and typically aren’t covered by a warranty.
6. Get a VIN check. Checking the vehicle identification number (VIN) can tell you if the car’s been stolen, in an accident, if someone still owes money on it and more.
7. Go for a test drive. A test drive can help you make an informed decision about potential cars.
8. Have a mechanic look at the car. The only way to make sure that your car is in good shape is to have an expert check it out.
9. Don’t be afraid to negotiate. The price of a used car typically has more wiggle room than a new car. Get an idea of the car’s resale value to make an informed argument for a lower price.

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The used car buying checklist

You don’t want to drive off the lot with a used car that’s going to cost you money to repair. Always have a professional mechanic do a full inspection of your car before you sign any loan or purchase agreements, and when you’re looking for problems, keep these points in mind:

• Everything sounds right on your test drive
• The brakes and car controls function well
• There’s no sign of damage
• The upholstery is in good condition

You’ll also want to make sure the seller has these documents handy:

• Transfer of ownership paperwork
• Registration papers
• VIN numbers and car history report

Where can I find a used car?

You have options when looking for a used car.

• Online dealerships. You can find both licensed dealers and private sellers on these websites that focus primarily on selling used cars — with photos and car history information available.
• Used car dealerships. At a dealership, your seller will be licensed and the car is often sold with a warranty and a free vehicle history report.
• Trading forums. There are forums where people sell their cars. Just do a vehicle history check and bring a friend along if you meet up with a seller.
• Classifieds. People still use the newspaper to sell or trade their cars. There are also dedicated websites like Craigslist and eBay where you can find a used car for sale in your area. But since you’re dealing with a private seller, you need to be careful and inspect a vehicle before purchase.
• Previous rentals. Many rental companies sell their cars once the new model year has been released. You could take advantage of a newer used car that has received regular maintenance — but it may have more mileage and general dings than other, similar used cars.
• Former leases. Also known as an off-lease car, these are typically the next best thing to a certified preowned car (CPO). This allows you to buy a newer car at a fraction of the new price, all while knowing that your car has received regular maintenance and only has a few thousand miles on it. If you’re looking to buy a used luxury car, this is typically the best deal.

What to watch out for

Used cars can be a cheap way to get something that’s almost new. But there are a few questions you should ask and things you should be on the lookout for when shopping:

• Salvage title or previous damage. If a car has been issued a salvage title — or has any known damage — then proceed with caution. It may have been rebuilt or refurbished, but there may be underlying mechanical or structural issues that can make driving unsafe.
• Previously deployed airbags. The National Highway Traffic Safety Administration (NHTSA) requires airbags to be replaced. Ensure this has done correctly by having the car inspected by a trusted mechanic.
• High mileage. A car with high mileage is more likely to face mechanical issues, and there are some sellers that have been known to illegally reset the odometer. Check the car’s vehicle history report to ensure the mileage you’re seeing is real — and that you’re willing to take on a car that may not last many more miles.
• Multiple owners. It isn’t always negative, but multiple owners could be a sign of neglect or frequent mechanical issues. And of course, the more owners a car has had, the more likely it is that one didn’t properly care for the car.
• Failed inspections. A failed inspection listed on a vehicle history report doesn’t mean you’re buying a lemon, but it’s worth having your mechanic confirm that the issue has been properly fixed before you buy.

How can I finance a used car?

If you’re looking to finance your purchase, you have a few options available to you.

• Secured loan. A secured loan requires you to use your car as security, but in return they generally have lower interest rates. But beware — some lenders won’t offer secured loans for cars older than 10 years old or a car with more than 150,000 miles.
• Unsecured loan. An unsecured personal loan won’t require collateral, but you may find that the interest rates are higher because it’s more of a risk for the lender.
• Dealership financing. If you’re buying a car from a dealership, then it may be able to offer you a financing option. But in general, it’s best to compare loans before you commit to dealership financing.

Compare used car loans

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Name	Product	Filter Values	Minimum credit score	APR	Loan term	Requirements
Carvana			No minimum credit score	3.9% to 27.9%	Varies	18+ years old, annual income of $4,000+, no active bankruptcies	Get pre-qualified for used car financing and receive competitive, personalized rates.	See your rate More Info	Compare	loading Fetching your data...
car.Loan.com Car Loans			300	Varies by network lender	Varies by lender	Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.	Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.	See your rate More Info	Compare	loading Fetching your data...
CarsDirect auto loans				Varies by network lender	Varies by network lender	Must provide proof of income, proof of residence, and proof of insurance.	Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.	See your rate More Info	Compare	loading Fetching your data...
Auto Credit Express Car Loans			300	Varies	Varies	Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.	Get connected with an auto lender near you, even if you have bad credit.	See your rate More Info	Compare	loading Fetching your data...
Monevo Auto Loans			500	3.99% to 35.99%	3 months to 12 years	Credit score of 500+, legal US resident and ages 18+.	Quickly compare multiple online lenders with competitive rates depending on your credit.	See your rate More Info	Compare	loading Fetching your data...
LightStream Auto Loans			Good to excellent credit	Competitive	2 to 7 years	Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old	Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.	See your rate More Info	Compare	loading Fetching your data...
LendingTree			Good to excellent credit	Starting at 3.09%	Varies by lender	18+ years old, good to excellent credit, US citizen	Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.	See your rate More Info	Compare	loading Fetching your data...

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Bottom line

There are mutliple factors that come into play when buying a used car, but research is necessary to ensure you’re buying a quality vehicle. And when you’ve found the right car, compare loans for used cars to find a lender that meets your needs.

Frequently asked questions

• Should I buy a Japanese, American or European used car?

  Japanese cars tend to have high reliability ratings from J.D. Power — which means you may end up spending less on maintenance and repairs, even if you do end up paying more up front. Many American manufacturers are also reliable, and you can typically find a similar car for less than a similar Japanese model.

  And while used European and luxury cars may not be expensive as their new counterparts, finding mechanics and parts for them can get expensive. Unless you live in an area with easy access to European replacement parts, it may be best to stick with a tried-and-true American or Japanese brand.

• Should I have a down payment?

  It depends on the cost of the car. If you’re paying $1,000 for a car from a private seller to hold you over, then a down payment will be unnecessary. On the other hand, having a down payment for a $20,000 used car can help you get a better interest rate — and borrow less overall.

• Do I have to put down a deposit for a used car?

  Some used car dealerships might ask you to put down a deposit for a car to prevent it from being sold to anyone else.

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