Used Auto Buying: 10 Steps to Buying a Used Auto
The choice to buy a used auto can be just as exciting as buying a new auto and in some cases a smarter financial decision based on your unique situation. Due to a vehicle’s depreciation over time, you can get a used auto for less than a new auto which may be a good decision for you based on your budget and needs. But, it’s important to do extra diligence on a used auto to make sure you are getting a quality vehicle from a trusted seller. By making informed decisions and following a few basic steps, you will be well on your way to owning a new to you “used” auto.
Step 1) Determine the right auto for your needs.
When you set out to buy a used car, you need to stop and ask yourself what the right auto for you would look like. Take into account your lifestyle, the type of work you do, if you have a long commute, if you have a family, what features have you like in previous vehicles you have owned, and what type of activities you like to do on the weekend. Write down these factors and try to prioritize them for when you evaluate specific used autos.
Step 2) Figure out your budget.
How much can you afford to spend on a used auto? What is the maximum you are willing to spend? How will you finance the auto purchase? Keep in mind the additional costs that come with buying a auto such as tax, titling and registration costs that come when you change ownership. You can get your local tax, titling, and registration fee details from your local DMV. Be sure to account for the ongoing cost of ownership as well such as gas, insurance, having an extended warranty, maintenance, and repairs. Our Auto Loans and Research Autos areas can help.
Step 3) Do your research.
Using the tools in our Research section can help you evaluate and compare used autos based on price, gas mileage, safety ratings, reviews, and specifications. Web sites such as kbb.com and edmunds.com provide current auto values based on the condition, location, and seller type so you can see private party pricing vs. dealer pricing. You can expect to pay more for a auto if you buy from a dealer, but there are advantages to buying a used auto from a reputable dealer. Quality auto dealers may provide you a limited warranty, certifications and inspections. While conducting your research, use the factors from Step #1 above to help you.
Step 4) Find Used Autos.
Once you have an idea of the auto that you’re looking for you, you can begin shopping. You will find a number of used auto listings online in the Used Autos area of our site, in your local newspapers, and local trade magazines (such as the AutoTrader) which lists used car listings in your region. Look for those listings that contain extensive information and multiple photos to help ensure you are finding quality used autos. Check the auto ad listing for details on price, mileage, transmission, color and model to ensure that it meets the specifications you listed in your research. In addition, make sure the total sales price, plus tax and registration fits within your budget.
Step 5) Contact the seller and do your diligence.
Contact the seller and do your diligence before meeting in person, and to schedule a test drive. Be safe and plan to take a friend with you, and all of your research with you so that you are doing a thorough inspection of the car. As an added precaution for a small investment, it’s good practice to obtain a Vehicle History Report on the auto. The report will tell you about any damage and ownership history. It will show any title problems like junk, salvage or flood. Most reputable used auto dealers will provide this report to you for free, but it’s definitely something you should consider obtaining now when you are very interested in buying a specific used auto.
Step 6)Test Drive
Before you buy a auto, it’s important that you see and test-drive the car before you do any type of transaction. The test drive is one of the biggest steps in helping your decision to buy a specific used auto. Pay attention to details (sounds, smells, function, appearance) and drive with the radio turned off. In addition, take your time inspecting the exterior and interior of the vehicle and ask a lot of questions. If you feel the auto dealer or seller is pressuring you, feel free to leave and take some time to consider your options. This is an important decision to make.
Step 7) Review Maintenance & Owner History
Question the seller or dealer about the maintenance & owner history. Was the auto serviced by the dealer or a private mechanic? Was the auto driven mostly on the freeway or street roads? Does the seller have the maintenance records? If so ask to see them and ask any questions regarding the records. Keep in mind that you are considering a used auto so it may have had some minor maintenance issues in the past. They key is making sure those issues were addressed. If the seller is a auto dealer they may be selling the auto with a included warranty or as a certified pre-owned vehicle. If so, these features are good protection for you as they will help protect you in the event of any future problems. But you should read the warranty details in full so you understand what is covered and is not covered relative to the used auto purchase.
Step 8) Negotiate like a pro.
Negotiating the transaction shouldn’t be a problem because you know your budget, you have check used auto values, and you have seen what other autos in your area are listed for. Being prepared is key to negotiating a good deal. Bring up any visible damages, wear and tear, dirt/debris that you can physically see on the car. In addition, you may be able to negotiate a lower price if the mileage is high or if the car has had multiple owners. Keep in mind both parties are looking for a fair deal, and that is the goal of a good transaction.
Step 9) Execute transaction.
Pay for the car in cash, cashier’s check or money order only when the seller is able to turn over the title. If you are using a auto loan to finance the used car, work with the finance company to issue a check to the seller. If available, you should also collect any maintenance or service records on the car for your records.
Step 10) Transfer Title & Registration
Following the transaction, immediately transfer the title and registration to your name with your state DMV and inform your insurance carrier of your new purchase. Licensed dealers are required to collect tax on the auto transaction and submit the title and registration documents to your state DMV. For a private party auto transaction, the buyer should plan on handling these fees and processes directly with your state DMV.
By following these steps, you will be way on your way to owning a great used auto that meets your needs and your budget!