Buying a Used Car? Here’s A Step by Step Guide

You have managed to scrimp and save a couple thousand dollars and want to buy a reliable, used car that gives you the most bang for the buck. Especially because you’re paying cash, it’s possible to find a good deal. But you may have to compromise on the make and model and do a little legwork.

Here’s a step-by-step guide to help you find a reliable used ride that works for you.

Step 1: Set a budget.

You’ll need at least a few thousand bucks to score a decent used car. When setting your budget, also keep the following costs in mind:

  • Routine maintenance, which is a given with any car, whether new or used.
  • Repairs, which are to be expected if you’re buying an older model.
  • Insurance, so you may want to call the provider and check your potential rates first.
  • Gas, which is an ongoing but sometimes overlooked expense.

You may need to adjust your figure downward to ensure you can afford to operate and maintain the vehicle. Also, be careful not to set the budget too high or you could run the risk of depleting your savings account.

Step 2: Start your search.

To successfully execute your search, you’ll need to be realistic. Financing a used car is one thing, but planning to pay a couple thousand bucks in cash is another. So, if your budget is about $2,000 to $3,000, you’ll need to lower your expectations and be willing to compromise.

That’s not to say you won’t find a reliable ride. But a higher price point generally means a greater selection of quality vehicles.

Start by searching on sites, such as AutoTrader, Edmunds, Vroom and Cars.com. If the results aren’t quite what you expected, try using the advanced option and setting price, make, model and mileage parameters.

You can also browse newspaper advertisements, visit used car lots or ask around to see whether your friends or family know someone who’s selling their ride.

Step 3: Narrow down your options.

Don’t focus solely on price when paring down your list. (Remember, you may still be able to negotiate). Instead, take a look at the CarFax or AutoCheck report. Both will give you a detailed history of the vehicle.

“Find out all the issues in the car’s history, because those issues may need to be addressed with costly repairs down the line,” Scott Chesrown, chief revenue officer at online used car retailer Vroom, adds.

If you see that the vehicle was salvaged or has been in an accident, that may be your signal to move on.

Also, conduct an analysis of the maintenance costs. J.D. Power, Edmunds and KBB have tools to help you run the numbers. Ax those cars on your list that have maintenance costs that could implode your budget.

Step 4: Test drive your top picks.

Now for the fun part: the test drive. Before you set up a meeting with sellers, give them a call to find out whether they’re willing to negotiate. But don’t make an offer yet. You may notice minor issues during the inspection that need to be addressed before taking the car on the road. That’s grounds for negotiating a lower price. If the sales price is firm, you may want to look at other cars first.

An important tip: bring along a “test-drive” inspection sheet to assist you with evaluating the vehicle. CarFax has a comprehensive checklist right over here.

Also, “research what the most commonly reported problems are with that vehicle and whether there have been any recalls, to help you better identify what kind of shape the car is in,” Chesrown suggests.

Step 5: Get a professional inspection.

Having a professional inspection done before you buy the car could save you hundreds, if not thousands of dollars. Nicole Firebaugh, a manager at Preventative Maintenance Repair of Marion in Illinois, urges buyers to make the final sale contingent upon having the vehicle inspected by a third-party mechanic not associated with the seller.

The mechanic “will be able to tell you what repairs your vehicle may need in the near future, common issues with the vehicle, how difficult the vehicle may be to work on, the price range of parts, and more,” Firebaugh says.

But if the seller is against the mechanical inspection, they may be hiding something. You can risk it if you’re set on purchasing the vehicle, but be prepared to pay the price if the car turns out to be a clunker.

Step 6: Seal the deal.

Once you find the best ride for you, negotiate until you agree on a sales price. Then, head to the local DMV to make the sale final and acquire the title. Otherwise, keep looking until you find a good deal.

But what if your budget isn’t enough and you need to get a loan? Don’t fret. Check out SuperMoney’s auto loans review and comparison tool to explore your options.

Featured Auto Lenders

LenderMinimum APRLoan Amount 
2.19% APR$5K to $100K (with AutoPay)Apply
1.99% APRUp to $15K
(Military only)
Apply
5% APR$7.5K to $45KApply
5.99% APR$20K to $35KApply