How to Buy a Used Car

Buying a used car can be a stressful process, especially since you can encounter a lack of information during the used car buying process. The following is a "how-to" guide when thinking about buying a used car.

"How To Buy a Used Car" Hint #1: Research, research, research. If you are thinking about buying a used car, it is critical that you complete your homework before actually even looking at a car. Used car prices can vary and you need to be informed on what the fair value of the car is, depending upon whether you plan to buy from a dealership or from a private owner. First, consult web sites like Kelley's Blue Book or Edmunds in order to find the suggested retail value for the used car that you are considering.

The next part of your research is looking in the newspaper and on-line in your area to see how these prices compare with the suggested retail value. The interesting thing here is that the price that is advertised in the newspaper and at the dealership can be significantly different from that found online. When recently looking for a used car, we found that dealerships often keep two separate price books - one for online advertising and one for those who come into the dealership without first looking online. The difference between these prices was between a few hundred and a few thousand dollars, so make sure to look online before visiting the dealership to make sure that you are getting the best deal possible.

"How To Buy a Used Car" Hint #2: Ask a lot of questions. Whether you are buying from a dealership or a private owner, make sure to ask questions about the car's history. Also ask for a Carfax or similar report which will give you full details about a car's background. A Carfax report will confirm how many owners the car has had, whether or not the car has been in a serious accident, and other key facts about the car that you will want to know before purchasing. In our recent used car search, we came across one car that had four owners in five years - there didn't necessarily seem to be anything wrong with the car, but it did keep us from making the purchase since it didn't seem like a good sign that anyone wanted to keep the car for a long period of time.

"How To Buy a Used Car" Hint #3: Negotiate. Of course, price negotiation is key in buying a used car. If you are trading in your current car, it's also important to know what your used car is worth before starting the negotiation process. You should know that used car dealers will often give you more than your car is worth in order to make the sale (salespeople will sometimes give you more incentives on your trade-in since this doesn't necessarily count against their commission, whereas directly lowering the car price can impact their commission). Of course, you should negotiate both the value of the trade-in and the overall price so that you get as close to the suggested retail value as possible.

"How To Buy a Used Car" Hint #4: Protect yourself. If you are buying from a dealership, buying a dealer-certified used car or a used car under warranty can protect you in case you do run into issues with your car (note that both dealer-certification and warranty protection can make the price of the car higher, but this protection can also buy you piece of mind in case something unexpected does happen to the car.