The following steps will tell you how to locate, price and negotiate to buy the used car you want. If you don't yet know what car to buy, read "10 Steps to Finding the Right Car for You" and then come back after you have decided.
If you have any questions along the way, please reach out to the Edmunds.com Live Help team for free assistance. The team will work hard to make your car buying experience the best one yet.
Step 1: How Much Car Can You Afford?
A general guideline is that your monthly car payment should not be more than 20 percent of your take-home pay. However, people shop for cars with their hearts as well as their heads, and that can be a little dangerous. That's where Edmunds.com's How Much Car Can I Afford? calculator comes in handy. It can prevent you from getting in over your head when you buy a car. The calculator helps you find an estimated price range in which to shop and will even suggest some cars that would fit your budget. Here's more information on how to set up your automotive budget.
Step 2: Build a Target List of Used Cars
To save money, consider buying a second-tier car, from the less popular — but still reliable — manufacturers. Well-known vehicles like the Honda Accord and Toyota Camry can cost thousands more than a comparable Chevrolet Malibu or Nissan Altima, even though these are good cars. With this in mind, build a target list of three different cars that meet your needs and fall in your budget.
You could also consider buying a certified pre-owned (CPO) car, which greatly simplifies the buying process. If you are really adventurous and in search of a real bargain , read "Can Buying a Demo Car Save You Money" and "Confessions of an Auto Auctioneer" for careful guidance. Also, take a look at "How to Get a Used Car Bargain."
Step 3: Check Prices and Reviews
To see if the cars you are looking at fit into your budget, check True Market Value (TMV)® pricing. Edmunds.com's TMV shows you what other people are paying for that car in your area. When you select a car through the Appraise a Used Car tool, it takes you to the gateway of all the information you need to make a good buying decision: pricing, reviews, specs, fuel economy and lists of standard features . Also, use True Cost to Own (TCO)® to see what other ownership expenses you are likely to incur. (Note, however, that TCO data is not available for all cars.)
Step 4: Locate Used Cars for Sale in Your Area
Begin searching for the cars on your target list using the Edmunds.com used-car inventory page. You can filter the search by many factors including distance, mileage, price and features to find exactly the car you want. You should also use other online classified ads such as AutoTrader.com, eBay Motors.com, CarGurus.com and Craigslist.
There are, of course, many places to shop for a used car, such as independent used car lots, the used car section of a new car dealership and, more recently, used car superstores. One such store, CarMax, makes it easy to search its inventory to find a good used car to buy at a no-haggle price.
Step 5: Check the Vehicle History Report
Before you contact a used-car seller, you should get a vehicle history report for the car you're interested in buying. This is an essential first step: If the report is negative, you should not go any further with this car.
You can access vehicle history reports, which are sold by several different companies, by the vehicle identification number (VIN) and even by license plate. AutoCheck and Carfax are the two best-known sources for vehicle history reports. These reports can reveal vital information about the used car, including whether it has a salvage title, which means it has been declared a total loss by the insurance company, or if the odometer has been rolled back.
Step 6: Contact the Seller
Once you find a good prospective car, call the seller before you go to see the vehicle. This is a good way to establish a relationship with the seller and verify the information in the ad. Sometimes the seller will mention something that wasn't in the ad that might change your decision to buy the car. Have our Used Car Question Sheet handy when you're calling to prompt you to ask key questions. You will notice that the last question is the asking price. Although many people are tempted to negotiate even before they have seen the car, it's better to wait. Once you see the car, you can tie your offer to its condition level.
If, after talking to the seller, you are still interested in buying the car, set up an appointment for a test-drive. If possible, make this appointment during the daytime so you can see the car in natural lighting and more accurately determine its condition.
Step 7: Test-Drive the Car
Test-driving a used car not only tells you if this is the right car for you but also if this particular car is in good condition. On the test-drive, simulate the conditions of your normal driving patterns. If you do a lot of highway driving, be sure to take the car up to at least 65 mph. If you regularly go into the mountains, test the car on a steep slope. For more on what details to look for, read "How to Test-Drive a Car."
After the test-drive, ask the owner or dealer if you can see the service records to learn if the car has had the scheduled maintenance performed on time. Avoid buying a car that has been in a serious accident or has had major repairs such as transmission rebuilds, valve jobs or engine overhauls.
Step 8: Have the Car Inspected
If you like the way the car drives, you should have it inspected before you negotiate to buy it. A pre-purchase inspection can save you thousands of dollars. You can take the car to a trusted mechanic for a thorough inspection or request a mobile inspection. A private party will probably allow you to do this without much resistance. But at a dealership, it might be more difficult. If it is a CPO car, there is no reason to take it to a mechanic.
Step 9: Negotiate Your Best Deal
Negotiating with a private-party seller can be a quick and fairly relaxed process. Negotiating with a used-car salesman will take longer and can be stressful. Here are some basics about negotiating.
- Only enter into negotiations with a salesperson or private-party seller with whom you feel comfortable.
- Make an opening offer that is low, but in the ballpark based on your TMV research in Step 3.
- Decide ahead of time how high you will go and leave when you reach your limit.
- Always be prepared to walk out: This is your strongest negotiating tool.
- Be patient. Plan to spend an hour negotiating in a dealership , and less time for private parties.
- Leave the dealership if you get tired or hungry.
- Don't be distracted by dealer pitches for related items such as extended warranties or anti-theft devices.
Step 10: Close the Deal
If you are at a dealership, you'll conclude the deal in the finance and insurance (F&I) office. If you are buying a car from a private party, you just have to make sure that payment is final and that the seller properly transfers title and registration to you. In any case, it's important to close the deal so you avoid after-sale hassles.
In both cases, you also need to make sure you have insurance for the car you just bought before you drive it away. Also, the F&I person will probably try to sell you a number of additional items: an additional warranty, anti-theft devices, prepaid service plans or fabric protection. Some people want the peace of mind that comes with extended warranties, so this is something you might want to consider (unless your used car is certified or still under the manufacturer's warranty).
Review the dealership sales contract thoroughly. In most states, it lists the cost of the vehicle, a documentation fee, possibly a small charge for a smog certificate, sales tax and license fees. This Edmunds article lists the fees charged in each state.
When you buy a car from a private party, either pay cash or provide a cashier's check. But before money changes hands, request the title (sometimes called the pink slip) and have the seller sign it over to you. Rules governing vehicle registration and licensing vary from state to state. Check the registry's Web site in your state.
Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used car.
To find a dealership that knows how to treat shoppers right, please visit Edmunds.com's Dealer Ratings and Reviews.