Used Car Buying Tips

Buying a used car can seem a little daunting, but these used car buying tips can help you find the car you want for thousands less than you'd pay buying new.

Be open. This list of used car buying tips starts with the very beginning of the process - your mindset. Many people decide what kind of car they want, then start shopping and hope they can find it in their price range. Often, they end up spending too much to get that specific car. Instead, decide what you can afford first, then see what's available in your price range. Don't be too open, though. Make sure you're shopping for what you actually need. If you really need a truck to haul stuff, don't bother looking at compact cars, even if the prices are good.

Expand your search. Shop for cars in surrounding areas, as well as right where you live. Even if you've found something you like in your immediate city, check surrounding areas to make sure there's not a better deal on the same thing if you're just willing to drive 30 minutes. That short trip could save you hundreds or thousands of dollars.

Do your research. If you have certain cars you're interested in, research their values at sites like Kelly Blue Book or Edmunds. Also look at the classifieds both online and in the newspaper to see what similar cars are selling for in your area. Knowing how the car should be priced will help you negotiate a fair price.

Get the car checked out. Of course, you'll test drive any car you're interested in buying, but unless you're a mechanic, you may not see red flags that something is wrong, much less hidden flaws. Have a mechanic inspect a car before you buy, and consider getting a vehicle history report from a company like Carfax. If you buy from a dealer, they should have an inspection report that they can give you from an in-house mechanic, but a history report is still a good idea.

Arrange financing ahead of time The best scenario is that you can pay for a car up front without having to finance it. But most people must get a loan for a purchase as large as a car. In that case, get approval for a loan before you shop. It's easier to stick to what you can afford if you already have your financing in place, and it puts you in a stronger bargaining position. The last time I bought a car, the dealer matched the financing I'd already secured, even though it was a much better rate than they initially offered.

Consider the source. The three main sources for used cars are private individuals, used car dealers, and new car dealers with a used car section. Individuals have the most latitude for bargaining and can tell you the most about the car since they have been driving it. But they're not likely to offer any financing, and an inspection will likely be up to you at your expense. Dealers rarely offer better prices than private parties and don't have as much negotiating room since they must make a profit on the sale, but they have usually cleaned their cars up and fixed any major deficiencies. Some even offer warranties, and most offer financing.

Negotiate. If you've followed the used car buying tips above and done your research ahead of time, gotten your financing in place, and feel confident about the condition of the car, you're in a good position to negotiate. Make sure you're not rushed, tired or hungry when you start negotiating, and be sure you understand every dollar that's being bandied about during the negotiation, especially with a dealer. They may agree to give you the price you ask for, but then increase the financing rate or decrease their offer on your trade-in (if you trade your old car in, which is rarely a good deal for you). Pay attention to the details!

Offer low to give the seller some room to meet you in the middle, but keep it in the ballpark so the seller knows you're serious. Know what your limit is and be willing to walk away if the seller won't meet it. And if you do walk away, leave your contact information in case the seller reconsiders your offer.

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