When you're hunting for a used-car bargain, how do you separate the lemons from the cream puffs? And how do you keep from getting ripped off along the way? Our three-part article walks you step by step through the process, so you can shop with confidence. You can also use the following articles to help you find the right used vehicle: "10 Steps to Finding the Car That's Right for You," "10 Steps to Buying a Used Car" and "Quick Guide to Buying a Used Car."
This series is primarily about shopping for used cars at dealerships, but when it's relevant, the articles also discuss buying a used car from a private party. Both avenues are worth exploring in the quest for a good deal.
Step 1: Decide Your Price Range and Arrange Financing
If you're like most people and need to borrow money to buy a car, begin by considering how much car you can really afford. Using our Car Affordability Calculator, you can play with the numbers to obtain a price range to shop in, based on your monthly budget. (This works for both new and used cars.)
Then, if you're going to shop at dealerships, or even if you are planning to buy from a private party, the smartest move you can make is to arrange auto financing in advance. If you're purchasing at a dealership, this important step presents a number of advantages because it:
- Keeps negotiations simple at a dealership
- Allows you to shop for competitive interest rates ahead of time
- Removes dependency on dealership financing
- Encourages you to stick to your budgeted amount
Step 2: Identify Your Target Used Cars
In whatever class of vehicle you are shopping for, whether it is SUVs, pickup trucks or economy cars, there are the leading brands for which you will have to pay a premium price. But if you are willing to consider the competitors, you can save yourself a bundle and still get a reliable car.
Consider building a target list of three different cars. You might want to think of vehicles in the same class. For example, if you really want a Toyota Camry you should also be on the lookout for a Chevrolet Malibu, Honda Accord or Nissan Altima. These cars were built for the same kinds of buyers, but they have different features and sometimes lower prices.
Select a list of three target used cars to shop for. Using our Used Car Appraiser, note the Edmunds.com True Market Value® (TMV®) prices for each vehicle with the anticipated mileage. Keep in mind that cars typically accumulate about 12,000-15,000 miles per year. Anything over this mileage reduces the value of the car; anything less increases the car's value.
Print out your TMV pages and have them with you whenever you speak to a car seller.
Preview of Part Two: Locate and Test-Drive Your Target Cars
In the second part of this series, we'll discuss steps three and four: how to locate your target used cars and how to test-drive and evaluate them. Then, in the third and final part, we'll show you how to negotiate effectively and close the deal successfully.