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How to Buy a Used Car

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


  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • Step 8: Find out worth Find out how much the car is worth by consulting online used car guides or visiting the library.
  • 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.
  • 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.
  • 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.

You Will Need

  • Time
  • Patience
  • Due diligence

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