- How to Buy a Used Car: Step-By-Step
- How to Buy a Used Car: Questions to Ask
- Frequently Asked Questions
So you've already decided on a budget for your car and how you'll be financing it. All you need to do now is find the said car and strike a deal. Although plenty of used cars are available for sale, either through a private party or dealership, it's not a simple process. Yes, you can easily buy a used car, but you could also very easily be scammed into buying a lemon, you could spend way more than the car's value, or you might even hand over money for a vehicle that doesn't exist. Therefore, when wondering how to buy a used car, you need to consider more than just the price tag.
How to Buy a Used Car: Step-By-Step
When looking for a used car, there are some essential steps you need to take to ensure you're getting what you paid for and don't get scammed.
Figure Out Your Budget
The first thing you need to know before searching for a used car is what you can reasonably afford. Whether you're planning on paying cash or getting a car loan, you want to look at your spending as a whole, so you can be sure you'll be able to afford to make the purchase.
Can You Afford a New Car?
If your budget is relatively high, you may even want to consider buying a new car. A new car will likely come with warranty coverage and fewer maintenance issues than a used car.
You want to think about more than the cost of the car itself since owning and maintaining a vehicle comes with other expenses. You'll want to consider things like:
- How much maintenance the car will need
- The cost of registration and insurance
- Gas efficiency
Buy from a Trustworthy Seller
When you're ready to start shopping around, be careful about who you talk to. You may be able to score a great deal from a private seller that you find online (e.g., on Craigslist or eBay Motors), but you also risk getting scammed out of your money.
Untrustworthy people use these free online platforms to scam you out of your money. Some common methods they use include:
- Posting up a car that doesn't exist: They'll ask for payment or a deposit but never deliver the car.
- Selling you a stolen car: You'll get the car alright, but you'll find out too late that the vehicle has been stolen.
- Selling you a dud: Scammers will lie about the vehicle's history and mechanical issues it has.
Always ask the right questions and do your due diligence before handing over any money to a private party (more on that below).
Buying from used car dealerships is usually a safer option since you're buying from a legitimate business that can't hide behind a computer screen, but remember who you're dealing with. There is still a risk that a pushy salesperson will rip you off, so you need to go in with a game plan.
Decide On a Car
Things to consider when choosing a car include:
- The price and the value of the car
- The cost to insure the vehicle (some vehicles are more expensive to insure)
- The safety rating of the vehicle
- The history of the vehicle (including any accidents and repairs)
- The age of the car
- How many miles per gallon the car gets
- The cost of maintaining and repairing the vehicle (some makes have more expensive parts, for example)
It's important to shop around when looking for a used car—don't just decide on the first one you see unless you know it's the best price you'll find.
Check the Vehicle History Report
One of the most important steps when buying a used car is checking the vehicle history report. Some dealerships may provide this to you free of charge.
If you're buying a used car from a private party, it's crucial that you order the vehicle history report yourself. Even if the seller offers to provide it to you for free, don't take the offer. Vehicle history reports are easy to doctor, and scammers will often create fake ones to hide extensive damage or accidents that the car has been in.
Vehicle history reports aren't too expensive, ranging from around $10-$50, and all you need is the car's vehicle identification number (VIN).
Test Drive the Car
Don't buy a used car you haven't test-driven. Car dealerships will always allow you to test drive the vehicle, so that should never be an issue. If you're buying from a private party and they refuse to let you test drive it, that's a red flag.
There should never be an issue with letting you do a test drive. Not only will doing a test drive let you feel exactly how the car runs and how comfortable it is for you to drive, but it will clue you into any potential issues it may have.
Inspect the Car
Not only should you test drive the car, but you should also inspect the car closely for any mechanical issues or damage. If you're not a professional, you can have the car inspected by a mechanic.
If the seller has an issue with you having a third-party coming in to inspect it, it should raise a red flag. They may be trying to cover up damage to the vehicle, which will lower the car's value.
Make Sure You Get the Right Paperwork
Paperwork is extremely important when buying used cars. When purchasing from a used car dealership, they'll usually do all the heavy lifting in this area, so all you need to worry about is signing the papers.
They will organize for the title to be transferred to your name and handle the DMV paperwork.
However, if you're buying from a private party, you should know all the paperwork you need to take to the DMV. It'll be your responsibility to complete the title transfer with the DMV (or equivalent government agency), which requires the seller to sign and complete information on the title.
You'll also want to get some kind of receipt from the seller to protect you should you fall victim to a scam of any kind.
Check the Seller's Driver's License
When transferring ownership of a used car, always check the seller's driver's license to ensure they are who they say they are. You want to make sure the actual owner of the car is the one selling it to you.
How to Buy a Used Car: Questions to Ask
Asking the right questions can help you get the best price and ensure you won't end up with a dud of a used car.
How Many Owners Has the Car Had?
The general rule of thumb here is that the fewer owners the car has had, the better. If the seller is the only previous owner, you'll be able to get a better idea of how the vehicle was used before.
Do You Have the Service Records?
Service records will give you an idea of how well the previous owners looked after the vehicle. Of course, if there were several previous owners of the used car, it'd be rare to see all of the service records, but it's worth asking.
Service records will show you all of the repairs and maintenance history of the car and can help you determine whether the vehicle is priced well or not.
Do You Have the Title?
To transfer the ownership of the car, you'll need the title. If the seller doesn't have the title, ask them to get a replacement. You'll be unable to legally transfer ownership of the car without the title, so you should never buy a car that doesn't have one.
It's much easier for the person whose name is on the title to request a replacement, so don't believe the seller if they try to convince you it won't be a hassle for you to get it yourself.
What is the Status of the Title?
You want to ensure that the used car title is clear of all liens and loans (i.e., there is no financial burden that makes it ineligible for sale). Other titles you should be wary of include:
- Salvage titles: This means the car's value has decreased by more than 75% of its original worth. While they are still legal to drive, you shouldn't be paying top dollar for a salvage title.
- Junk title or dismantled: Sometimes salvage titles are also known as junk titles. Junk titles are usually given to cars that have been sold to junkyards who will sell the car's parts or sell it for scrap metal. Dismantled titles are given to cars where the damage is so significant that it wouldn't be worth repairing (i.e., the repair cost is higher than the car's value).
- Odometer rollback title: If a mechanic has determined that the odometer reading on the car has been rolled back (usually done by scammers who want to sell the car for more than it's worth), it will have an odometer rollback title. Be very wary of cars with this title.
How Did You Determine the Asking Price?
Ask the seller how they came up with the price of the car. They'll likely tell you it was based on things like:
- How much they paid for it
- The number of miles on the car
- The current market value of the model
You don't want to just take their word for the current market value. Instead, look on sites like Kelley Blue Book to see if they've priced it reasonably or not.
Can I See the VIN?
Whether you're buying a used car online or in person, you'll want to look at the VIN for yourself. You'll need this number to order a vehicle history report and ensure there aren't any red flags.
The car's vehicle identification number is usually found at the bottom corner of the windshield, on the driver's side door jamb, or under the hood. It will look like a barcode with a string of numbers and letters underneath.
If you're buying the car online and haven't seen it in person for yourself yet, ask the seller to send you a photo of the VIN. Scammers may give you a fake VIN, so the vehicle history report comes out clear, so you want to either see it for yourself or ask for a photo of the VIN.
Can I See the Car in Person?
Many used car scams involve sellers who refuse to let you see the vehicle in person before you hand over your money. They'll often have excuses such as being out of town so they can't show it to you, or they're in a completely different state. If this happens, the car doesn't actually exist most of the time.
Regardless of how good of a deal it may seem, you never want to hand over any money for a car you (or someone you trust) haven't seen in person. Additionally, you only want to give them the money once you get the keys to the vehicle.
Can I Have a Mechanic Inspect the Vehicle?
Not only do you want to have a professional inspect the vehicle for any red flags or issues, but you'll want to hire your own mechanic. Don't let the seller (especially private sellers) provide their own mechanic. If they insist, it could be a sign of a scam.
They may want to provide their own "mechanic" who will lie about the state of the vehicle.
Can I Take the Car for a Test Drive?
As mentioned previously, test driving cars before buying them is extremely important, especially for used cars. Any seller who refuses to let you test drive the vehicle should be avoided.
Asking for a test drive is not an unusual request, whether you're buying a used car or a new car, and the seller shouldn't have a problem with this.
Is the Price Negotiable?
More often than not, there's some wiggle room when it comes to the price of used cars. Once you've had the vehicle inspected and test-driven it, you may be able to knock the price down by a few pegs.