How to Buy a Used Car

With scam artists and unethical dealers rolling back odometers and "revising" vehicle history, it can be risky to buy a used car. Learning how to protect yourself with some research and a critical eye, however, can get you a reliable vehicle at a reasonable price.

Once you've decided to purchase a used car, and you know your budget and the type of vehicle you want, it's time to hunt for the best used car for you.

1. Private Owner. Search Craigslist or eBay Motors to find private owners who are selling their vehicles. Buying from a private owner will be less expensive that through a dealership. NOTE: you will be buying a car "as is," raising the chance of the car being poorly maintained.

2. New Car Dealers. The highest asking price on used vehicles can be found at new car dealers, but you will also find they are the best source for certified pre-owned cars. Additionally, you may be offered financing deals and warranties.

3. Used Car Dealers. You can find better prices with dealers specializing in used cars specifically. You may be able to get a warranty as well.

4. Rental Car Companies. Companies like Enterprise and Hertz sell used cars that are inspected regularly, however they are very basic in type and options.

5. Car Superstores. Used cars sold by CarMax and AutoNation have undergone extensive inspections and come with warranties to boot. Unfortunately, the prices reflect these inspections and cannot be negotiated.

When you've found a used car you'd like to check out, call the seller and set up an appointment. 

1. Ask questions. Find out why this car is being sold, how many miles are on it and whether there are maintenance records that come with the vehicle.

2. Inspect the car. Examine the interior and exterior, looking for rust, imperfections, cracks and leaks. Make sure the locks and windows work. Double-check the odometer reading.

3. Inspect the engine. Look for surface flaws, pull out the oil dipstick and make sure it is free of solid particles. Look for cracks or looseness in the belts, hoses and wiring.

4. Inspect beneath the car for signs of leaks or spillage.

5. Test drive the car and pay attention to any unusual sounds. Run the A/C, stereo, power windows, wipers, brakes, etc. to make sure the car truly is in running order.

6. Do not buy the car when you test drive and inspect it. You should check into the vehicle's history and have it inspected by your mechanic before you hand over any money.

Never buy a used car without getting its vehicle history report. For about $20, you can access this information from Experian AutoCheck or Carfax.

This report will tell you:

1. The most recent official odometer reading.

2. If the car was flooded, sold at auction or has been in an accident.

3. How many previous owners the car has had, as well as the dates each took possession of the vehicle.

4. When the dealer/seller received the car.

Have an independent mechanic inspect the vehicle.

1. The inspection should last about an hour and cost between $50 and $75.

2. If the seller is hesitant about letting a mechanic inspect the vehicle, invite the seller to observe the inspection. Any hesitancy on the seller's part means you should probably not buy the vehicle.

3. Let the mechanic know the car's history and maintenance records (if available), as well as issues you may have found during your test drive and inspection.

4. Ask for a rating of the car's condition as excellent, good, fair or poor. This rating will help in your price negotiations.

1. Consult the Kelley Blue Book for the trade-in price and suggested retail value of the vehicle based on make, model, mileage, years and options.

2. Find the median asking price. Research the vehicle's asking price at eBay Motors, UsedCars.com, Cars.com or CarsDirect and find the average. If it is lower than the asking price, using this information to negotiate the price down.

3. Consider all of these factors. Take the median price and factor in the vehicle's mileage, condition and the seller's eagerness in getting rid of the car into consideration before deciding whether to buy the car or not.

1. Show Your Research. Present the seller with your research when negotiating to back-up your reasoning for asking for a lower price.

2. Bring a Friend. Your friend should touch all of the car's dings and flaws. He or she can suggest you leave when you're not getting the deal you want.

3. Be Fair. Be honest with the seller and try to get a fair deal. If your research and calculations don't support the asking price, however, the car may not be worth it - be prepared to walk away if need be.

Before signing and taking possession of your car of choice:

1. Get it in writing. The seller and you should complete an itemized bill of sale that details the transaction amount. You can download a bill of sale at CarBuyingTips.com.

2. Get the title. The title of the car is the document issued by the state that includes the car's vehicle identification number (VIN) and ownership information. The seller needs to sign over the title to you. Do not buy a car or put any money down without the title in your possession.

Purchasing a car directly from a private owner means you will buy that vehicle "as is." Buying the car from a car dealership, however, means you should be entitled to a 30 day warranty at the very least.

When purchasing a used car "as is," you can get an extended warranty from Warranty Direct or Nation Warranty Corporation.