Buying a Used Car
A used car, wisely bought, is a much better buy than a new car for many of us. You can buy more car and lose less in depreciation up front.
But if you're not careful, you might pay too much for a used car that's a lemon and vastly overpriced. So, do it like this . . .
Determine how much you can afford
Determine how much you're able to spend to buy a used car. This is your "Available Cash." That amount is made up of three things:
- the amount of a loan (if any) you could qualify for;
So how do you know how much of a loan you could qualify for? If you are a teen in school or a college student, the answer is very little if any. But if you are steadily employed with good credit, have a regular full time job and you know how much of a monthly payment you can afford, go to our online calculator to determine "How much car can I afford".
- the cash your trade-in (if any) will give you; and
- in-pocket cash.
Shop for cars with a loan value about $800 under your Available Cash figure
The reason you're looking for cars $800 under your Available Cash figure is to leave room in your budget for dealer profit, taxes, fees and the like.
If you buying from a private individual, though, shop for cars closer to your Available Cash figure.
Locate your next car
Nowadays most vehicles are advertised online where a seller can expose their vehicle to a much larger audience than merely through print advertising.
Check out sites like:
DCU has a website where you can search for used and/or new vehicles to find the right car at the right price. Unlike other auto sites, DCU offers immediate financing directly from the website. You can find it at dcu.cudlautosmart.com.
Craigslist also lists autos for sale in different categories: by owners only, dealers only, or all cars.
Check out prices from different dealerships throughout your area to determine the selling price of vehicles you are considering. If you decide to visit any, call ahead to make sure the vehicle is still available. Often a dealership will sell a vehicle without also updating their website.
Quick Tip – don't shop on rainy days
On rainy days, it's hard to see body damage and you're less likely to give the car a thorough check-over. Don't be in a hurry. Each used car is unique. A car that looks just fine can be a monster.
Get the car history information
It's important to know the history of any used car you intend to purchase. Fortunately, any damages, owners, whether leased or rented, odometer reading and many other facts are recorded in databases that are available to the public.
Visit our "Checking a used car's history" page to learn how to obtain the history of a vehicle you are considering to purchase, whether from a dealership or a private individual, before you ever walk on the lot.
Get the car inspected by your mechanic before you set the price
Once you have gone to the lot and selected a car for possible purchase, take the car to a mechanic of your choice. If the seller won't let you have a vehicle inspected, that's a sign there may be something wrong. Don't buy the car.
Ask your mechanic to check the car carefully and tell you how much he'll want to put the car in good running order – not to make it like new. Taking a car to a mechanic is the most important step you must take. Don't buy a used car if you don't do this. You have to know what you are dealing with.
It's different if you are purchasing a vehicle as "certified" used vehicle from a dealership. Vehicles in this condition undergo a multi-point inspection check and are guaranteed for a period of time. Only a limited type of vehicles qualify for this status, and are generally considered to be of high quality, where an outside inspection is not necessarily needed. These vehicles are usually newer used models and usually sell for a higher price, but are more reliable.
Auto service centers, such as tire dealers or department store auto service facilities, are good for pre-purchase inspections. Also search used-vehicle inspection services on the web for inspection services in your area.
Use any estimated repair costs to negotiate a better price
Budget the repair costs and use them as bargaining chips. If your Available Cash figure is $5,000, and a mechanic says you need to spend $1,000 on repairs, you can't spend more than $4,000 on that particular car. Don't be shy in telling the seller that.
See more of the negotiation process in our Streetwise Auto Buying Step by Step guide for negotiations with a dealer.
Used vehicle warranties
Different states have different Used Vehicle Warranty Laws. For example, Massachusetts has a "Used Vehicle Warranty Law that protects consumers who buy used vehicles from a dealer or a private party. Find out more about it at the mass.gov website.
Some states like Massachusetts also have a Lemon Aid Law that allows you to void or cancel a motor vehicle purchase if the vehicle fails to pass inspection within seven days.
Check your individual state for similar laws.
Check out more about used car warranties on our Extended Warranties page