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It won’t be a bargain if you have to spend a ton of money on repairs, so learn how to spot a lemon.

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  Step 1: Figure out how much you can spend

  Figure out how much you can spend—either in cash or in monthly loan payments.

• Tip

  Don’t forget about the costs of owning a car, like insurance and maintenance.

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  Step 2: Research models

  Research the models you’re considering. Car information websites will help you compare both the performance and long-term reliability of various cars.

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  Step 3: Locate car

  Locate a car that you want to check out. Search used car lots, classified ads, car dealerships that sell pre-owned vehicles, and special used-car publications and websites.

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  Step 4: Ask seller about condition

  Ask the seller about the general condition of the car, including mileage, extra features, and whether service records are available.

• Tip

  If you’re buying the car from an individual, ask if he or she is the original owner and the reason for selling the car.

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  Step 5: Inspect & test-drive

  Inspect the car and test-drive it. You want to make sure that it performs well, runs smoothly, and feels right.

• Tip

  Don’t let the seller rush you through the test-drive.

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  Step 6: Find out if warranty included

  Find out if the car comes with a warranty.

• Tip

  If a warranty isn’t included, have a mechanic inspect the car for you. Let the seller know that the sale is contingent on a professional inspection.

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  Step 7: Get vehicle history report

  Get a vehicle history report from one of the companies that sell them online. See if the vehicle has been damaged in an accident or flood—and if the odometer may have been rolled back.

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  Step 8: Find out worth

  Find out how much the car is worth by consulting online used car guides or visiting the library.

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  Step 9: Negotiate

  Negotiate. Using the market value of the car as a guide, make an offer on the low end. Don’t be afraid to walk away.

• Tip

  If you’re trading in your car or having a dealership arrange financing, negotiate the price of the car before you discuss trade-in value and financing to assure you get the best deal.

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  Step 10: Close the deal

  Close the deal. If you’re buying from a private seller, make sure you get the title. Register your new vehicle with your state’s Department of Motor Vehicles.

• Tip

  If you’re buying from a dealership, they will handle most of the paperwork for you. Just make sure you read any contracts or paperwork carefully.

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  Step 11: Drive home

  Drive home in your swank new ride.

• Fact

  Did you know? On average, new cars lose 15% to 30% of their value the moment they’re driven off the dealer’s lot.