Before you buy that used car, make sure you’re prepared.
However experienced you are with purchasing vehicles, it never hurts to have a checklist when you start shopping for a used car. Before you test drive cars or looking at your financing options, read our handy guide so you know what to keep in mind at each stage of the buying process.
What you need to know about buying a used car
Since used cars have been owned by at least one person, the condition of the car should be a top concern. Some cars can look almost new, while others can look like they’re on their last wheel. For many, a used car is the best option for their budget. The previous owner has taken the hit of depreciation, so the money you pay for the used car will be closer to the car’s actual value.
Of course, there are risks that come with buying a used car. A problem may not be immediately obvious, and they are often outside of warranty. Should something go wrong, the manufacturer won’t cover the cost of the repair.
Before you buy a used car, research the make, model and year of the vehicles you’re interest in and know what types of questions to ask.
How to 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.
- Dealer financing. If you’re buying a car from a dealership, then they may be able to offer you a financing option.
Compare your used car loan options
Where can I find a used car?
You have options when looking for a used car.
- Online dealerships. Sites that focus primarily on selling used cars often post photos and car history information for you to browse from home. You can find both licensed dealers and private sellers on these sites, meaning you have your pick of cars at prices you can afford.
- Trading forums. There are forums where people sell their cars and where you could find a bargain. However, a private sale can be risky because you don’t know the seller and the car’s history may not be fully reported.
- 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.
- Used car dealerships. If you want a large selection of used cars, there’s likely a used car dealership or two in your area. At a dealership, your seller will be licensed and the car is often sold with a warranty. This is a good option for people who don’t want to risk a private sale.
Find a used car in your area online
What you should do when looking to buy a preowned vehicle
It can be tempting to buy the first car you like. But be cautious — a car is a large ongoing expense, and it’s important to consider every option before you make your final purchase.
As you start browsing your car options, do your research. Look online, in newspapers and visit a few used car dealerships. It’s important to understand the current prices in the market and what’s available to you. See what options you have for your budget and examine the different types of cars that you’re able to buy. This way, when you find the car you want to buy, you’ll know if you’re getting a good deal.
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
Bottom line
The factors that come into play when you buy a used car can seem overwhelming, but you want to make sure that you’re buying a quality vehicle. Be prepared to do plenty of research on the specific make and model you’re interested in and educate yourself on how to negotiate so you can make an informed decision.
Frequently asked questions
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