Used cars are a smart choice for budget-minded people. And while lots of things about used car shopping are the same as for new car shopping, there are important differences, too. Edmunds is here to help with your used car shopping with more than 100 tips gleaned from our in-house used car shopping experts. Got a tip of your own? Please share it in the comments.
2. It's a good idea to get a free credit report and to know your credit score before you begin shopping. (Some credit card issuers now provide this information at no charge.) Correct any outstanding credit issues before you go car shopping.
3. Make a list of your wants and needs in a used car. Plan on buying the car that meets 80 percent of your needs.
4. Jot down your likes and dislikes of the cars you are interested in. This will help when it's time to narrow down the search.
5. Build a target list of cars you might want to buy. As you complete your research, narrow the list to three used vehicles so the shopping process won't be overwhelming.
6. 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 also good cars.
8. Note your "must-have" options or packages and your first and second choice colors. Be prepared to be flexible, though. Because you're looking at used cars, you might have to budge on color to get the features you want, or vice versa.
9. If your color and options choices in a used car are not common ones, you may not be able to negotiate as aggressively on price. Also be prepared in this case to look a little longer and even travel a bit farther to get the car you really want.
10. Read dealer reviews to discover the more popular car dealers in your area. Zero in on reviews that talk about used car purchases. These might also tell you which salesperson to ask for.
11. Consider buying a certified pre-owned (CPO) car. It greatly simplifies the buying process because the car has already been thoroughly inspected, so evaluating its condition is less of an issue. Just keep in mind that the vehicle will be priced higher because of the perceived quality, as well as the extra warranty coverage included with a CPO car.
12. Look at used car inventory on Edmunds to see the dealership availability of the car in which you're interested. Remember to specify the trim level, features and mileage that you want.
15. Use the Edmunds True Cost to Own (TCO®) tool to see the ownership expenses you are likely to incur for a used car under consideration.
16. Be aware of the total price of the used car you're planning to buy. Factor in extended warranty costs, interest costs and maintenance costs, for example.
17. Ask a dealership service department or a trusted independent mechanic if major service visits will be expensive for the cars you are researching.
18. Use model-specific message boards, such as the Edmunds Forums, for pros and cons of the car you are considering.
19. If you're used car shopping at a dealership and have a car that you will use as a trade-in, use Edmunds' Appraise a Used Car tool to determine what your current car is worth and what kind of trade-in offer you'll get.
20. Use our used car question sheet when calling for information about used cars. It reminds you to ask key questions about a vehicle's condition and keeps the information organized.
22. You'll find cars from private-party sellers by searching online classifieds at such sites as AutoTrader.com, CarGurus.com, Craigslist and eBay Motors.com. You also can check out the new online car-buying and selling companies such as Beepi, Carvana, Tred and Zipflip. These companies' services for buyers vary, but can include car inspections, warranties and return policies.
23. A plus for used car shopping at a new car dealership is that it's nearly always connected to a service department that reconditions vehicles and is available to repair the used cars it sells (typically, those of the same brand). Many of the cars in Edmunds used car inventory are those found at new car dealerships.
24. An advantage of shopping at independent used car lots is that they carry lower-priced cars, many of which new car dealers won't carry in their inventory because of their age.
25. Be careful when shopping at "Buy Here, Pay Here" used car lots. They're more likely to finance someone with poor credit, but the interest rates will likely be high and the vehicle will cost more in the long run.
26. If you're looking for a certain make or type of car, you may have success shopping at a specialty used car lot. Examples are used car lots that sell German cars (Audi, BMW and Mercedes), luxury vehicles, performance cars or classic cars of a certain vintage.
27. If you shop at CarMax, you can see vehicles from many automakers and get no-haggle pricing and extended warranties. It's important to remember that while no-haggle pricing means lower stress, it doesn't always mean the lowest price for a used car.
29. Conventional wisdom says that buyers should avoid used rental cars because they've been abused by drivers. However, prices for rental cars from such sources as Hertz and Enterprise are competitive and the warranties are likely still in effect.
30. Be cautious when buying a car sight unseen (at an online auction site, for example). The transaction process is more complicated, and you could be the target of scammers.
31. Some used cars listed in classified car ads are being sold by curbstoners. These fly-by-nighters resell cars they have purchased from a variety of low-level sources. Curbstoners usually know little about the cars they are selling and might try to misrepresent the mechanical condition of the vehicle.
Tips on Pricing
32. "Asking price" is just that: the amount the seller asks for the car, knowing that he might not be paid the full price he's asking. Basically, it's an invitation to you to make an opening offer to start negotiations.
33. "Dealer retail price" is typically the price that's pasted on the car's windshield at a dealership. It's similar to an asking price in the private-party realm, and is the starting place for negotiations. It's one of three values (along with private-party and trade-in price) that you'll see when you appraise a car that you're interested in on Edmunds.
34. "Trade-in price" is what dealers will offer you for your car. The trade-in price is negotiable and very close to what cars sell for at used car auctions.
35. "Private-party price" is what a seller would expect to get for the car in a private-party sale. This is always a higher amount than the trade-in price.
36. "Wholesale price" is what a car dealership paid for the used car it's selling. The parallel in new car pricing would be a vehicle's invoice price. It's the dealer's rock-bottom figure and it's unlikely that he'll sell you the car for that amount.
37. "Book price" and "book value" are terms you often hear without reference to which book is being cited. It typically means the Kelley Blue Book, which lists Kelley's own dealer retail, private-party and trade-in prices. If you are trading in a car at a dealership, for example, a dealer might say, "I'd like to give you more for your trade-in, but the book value is really low."
38. Some used car dealers present the Kelley Blue Book price as though it has been written in stone. In fact, Kelley is just one of many pricing guides. You can compare the Kelley price with Edmunds.com's TMV pricing to show what you are willing to pay.
39. Because dealers (and some private-party sellers) look at many different pricing guides, including Edmunds TMV, Kelley and NADA guides, your research won't match the sellers' prices to the dollar. Instead, use the guides as an approximation.
40. When car salespeople negotiate price, they don't typically include the sales tax and various dealer fees. So, before agreeing to a deal, ask for the "out-the-door" price so you know exactly what additional fees you will have to pay (these should be sales tax, documentation fee and DMV fees).
41. If you've decided to buy a lightly used car (one that's less than two years old), compare its price to that of a brand-new version. Because of rebates or end-of-season deals on new cars, the new car may be priced closely to the lightly used car you've picked out. Do your research on both.
Vehicle History Tips
42. Get a vehicle history report for any car you're seriously interested in buying. This is an essential first step: If the report is negative, go no further with the car. These reports are often free when you're shopping through dealerships, classifieds and some peer-to-peer sites.
43. Several sources provide vehicle history reports. You can access them by the vehicle identification number (VIN) and sometimes by license plate number. AutoCheck and Carfax are the two best-known sources for these reports, which can reveal vital information about the car, including whether the odometer might have been rolled back or if it has a salvage title, which means it has been declared a total loss by an insurance company (see #45).
44. Check for any open recalls on the car. These should come up on a vehicle history report, but you also can check for recalls via the car's VIN at safercar.gov. Keep in mind that dealerships selling used cars are currently not required by federal law to do a recall repair on a car before they sell it. Private-party sellers might not even know that their car is under recall.
45. Be cautious about any used car that has a salvage title. It means that the vehicle has suffered major damage (such as in a collision, flood or hailstorm), has been declared a total loss by an insurer and has subsequently been rebuilt or repaired and offered for sale.
46. If you're considering buying a car with a salvage title, make sure to have it inspected before purchase, only buy from a reputable repair shop and ask for the original repair estimate for the car before you commit to purchase. That will show you how serious the damage was.
47. It's difficult to estimate the value of a car with a salvage title. Edmunds does not provide specific pricing estimates for them, but in general, a salvage title decreases a vehicle's value by up to 50 percent of the TMV price for an identical vehicle with a clean title.
Test-Drive and Inspection Tips
48. Test-drives are even more important in used cars than in new ones. Don't skip them.
49. Make a checklist of options and features you want to closely inspect during your test-drive. Without a checklist, it's easy to forget crucial items.
50. Use common sense for your personal safety when you're arranging a test-drive with a private-party seller whom you don't know. Consider having a friend or family member come along with you. If no one is available, let someone know where you are going and with whom you're meeting.
51. A prospective seller may want to meet during the day in a public area such as the parking lot of a mall for the test-drive. This is for the seller's safety, and it's not a bad idea for you as a buyer.
52. Get the big picture first: Crouch next to the front bumper, look down the side and sight along the lines of the car. Do this for each side and make sure there are no ripples in the door panels. They could indicate body damage.
53. Check panel fitments front, side and rear, and check that the gaps between the doors and around the hood and trunk lid areas are even.
54. Open all the doors and the trunk. Test all the lights, controls, heater and air-conditioner.
55. Take a look at the four-digit DOT code on the tires. This is the tire's "born-on" date and it will tell you the tire's age. Older tires could be dangerous and might need to be replaced. The first two digits stand for the week; the other two are the year. For example, if your tire had "1613" listed, it was manufactured on the 16th week of 2013.
56. Open the hood and make sure there are no leaks or sprays on the underside of the hood lining that would indicate a burst hose or fluid leak. With the engine running, listen for unusual noises that might indicate a mechanical problem.
57. Once you get behind the wheel, your first impression will be the way the car feels when you sit in it. Are the headroom and legroom sufficient? Do you have good front and rear visibility? Are the gauges and controls laid out conveniently?
58. Before you start driving, adjust the seat, the mirrors and the seatbelt. How's the lumbar support? Would it be a comfortable car to take on a long trip?
59. Turn off the radio/audio system before you begin driving and try not to have a distracting conversation with the seller. You want to concentrate on hearing the engine and fully experiencing the car.
60. If possible, test-drive the cars you are considering back-to-back so you can more easily compare your driving impressions. Testing multiple versions of the same make/model is also a good idea, as differences or problems with specific vehicles will more likely become apparent. Along the same lines, it could be helpful to test-drive a new version of the used car you're considering if it belongs to the same generation. Knowing what it should be like can be helpful.
61. Bring golf clubs or other large items you regularly carry to test the cargo area's capacity. If you have small children, bring their car seats with you and make sure they attach easily and safely.
62. Get in and out of the car several times to see if you bang your head or have to crouch awkwardly. Sit in all the seats to make sure they are comfortable and provide adequate legroom.
63. Check the storage compartments around the driver seat to make sure there are adequate places to put your wallet or purse, your cell phone and whatever else you commonly take with you.
65. Try to test-drive a car during the day so you get a better idea of the color in natural light. It won't look the same at night even under street lights.
66. Don't test-drive a car in the rain or snow if you can help it. You won't get a true feeling for how the car drives under normal conditions.
67. 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.
68. Have the car inspected by a professional. A pre-purchase inspection can save you thousands of dollars. A private party will probably allow you to do this without much resistance. At a dealership, it might take some more persuasion. If it is a CPO car, there is no reason to take it to a mechanic since it has already been inspected by a factory-trained technician.
69. When you arrange a pre-purchase inspection, ask the mechanic to check out the car's major systems, verify the car's equipment, options and condition level, check for body or frame problems and check any engine codes, which can reveal mechanical problems.
70. 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 sometimes be stressful.
71. Only enter into negotiations with a salesperson or private-party seller with whom you feel comfortable.
72. When you're about to negotiate with a used car dealer, use the Appraise a Used Car tool on Edmunds, look up the TMV® trade-in price for a vehicle that interests you, add $500 and use that as a starting point. This lets the dealer know you're willing to let him make some money over what he paid for the car.
73. When you're buying a car from a private party, look up its private-party TMV price. Make your opening offer $1,000 below that figure and raise it by $500 increments.
74. If you are inexperienced in negotiating for a used car at a dealership — as most people are — go slowly and write down the numbers to confirm that you've heard them correctly. Don't be shy about asking the salesperson to repeat any prices under discussion.
75. Make an opening offer that is low, but in the ballpark and based on your TMV research. Let the seller know you've done some research to assure them you're not just tossing out a random number.
76. Keep negotiations relaxed and impersonal. You'll get to a win more quickly if you keep your emotions in check.
77. Decide ahead of time how high you will go in your negotiations, and stick to your limit.
78. As hard as this may be, don't show enthusiasm for the car. This weakens your negotiation stance. Use your best poker face.
79. Always be prepared to walk away from a negotiation that isn't going the way you want it to. It's your most powerful tactic.
Buying a Used Car at a Dealership
80. If you have tough credit issues and want a specialist at the dealership to help with financing your used car purchase, contact a dealership manager first and ask to work with that expert.
81. Buy during the week if possible, especially if you are looking to save time. It will probably be faster to buy on a slow Tuesday than on a busy Saturday.
82. To speed up the process, bring all the necessary paperwork, including payment, driver license, title and current registration for your trade-in vehicle as well as proof of insurance.
83. If you have already arranged financing from a lender, tell the salesman you're a cash buyer. You can then bargain on the actual price of the vehicle instead of the more confusing practice of negotiation based on a monthly payment.
84. Be on the same page as the salesperson and know what price you're negotiating. Is it just the price of the car, or is it the out-the-door price, which will include taxes and other fees? The difference could be hundreds of dollars.
85. If you have quotes from other dealers for comparable cars, use them as leverage in your current negotiation. The comparison may not be as direct since used cars vary in mileage and options, but it can give you a good reference point.
86. Resist "bait and switch" practices where a salesman tries to steer you to a more expensive car. However, listen to salespeople when they make honest suggestions. They may know of a used car in their inventory that you hadn't considered but would be perfect for you.
87. There is strength in numbers. Bring a friend along as your "wingman."
88. If you plan on trading in your current car, print out the Edmunds trade-in price and take it with you. It will support your statement of its value and may deflect a lower offer.
89. Get an offer from CarMax for your potential trade-in. Then head out to the dealership to compare it. If you don't like the dealer's offer, you might get more for the car by selling it yourself. Or you can just take the CarMax offer.
90. Just as you do with a new car, you'll conclude your used car purchase at a dealership's finance and insurance (F&I) office. If you've had a long negotiation, you might be tired. But be sure to keep on your toes. Don't sign a purchase contract just to "get it over with."
91. Review the 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.
92. The F&I person will probably try to sell you a number of additional items, such as an anti-theft device, prepaid service plan or extended warranty (also called a "vehicle service agreement"). If you want an extended warranty, research the price, coverage and exclusions ahead of time.
93. If you want to buy a used car extended warranty that's offered by the carmaker, you may be required to buy it on the day you purchase the car. Check the carmakers' websites for more information on those requirements.
94. Dealers are not required by federal law to give used car buyers a three-day right to cancel (commonly known as a "cooling-off period"), according to the Federal Trade Commission (FTC). In some states, though, dealers are required to offer or honor a right to cancel. (In California, for example, a used car buyer can purchase a two-day "contract cancellation option agreement.") In other states, the right to return the car in a few days for a refund exists only if the dealer chooses to offer this privilege, according to the FTC. Before you buy, ask about the dealer's return policy, get it in writing and read it carefully.
95. If you bought dealer-installed items like floor mats, be sure they're included. If they're not, ask for a "due bill" for anything that's missing (floor mats are a common example) or for work that has been promised by the dealership (to fix a blown speaker, for example).
Finalizing a Private-Party Used Car Deal
96. Used car sellers will expect to be paid in cash or with a cashier's check. Offering any other kind of payment could kill the deal or at least complicate the purchase process.
97. Be sure that the title (also called the "pink slip") is signed by the seller and that all the information is properly recorded. (In some states you might need a transfer of ownership document, which is attached to the title.)
98. Have the seller fill out a bill of sale if that is required in your state. This is a document you can show the police if you're unlucky enough to be stopped right after the sale.
99. Have the seller provide proof that the car has passed a recent smog test if it is required by your state.
100. Make sure that the vehicle registration is current or you could be held responsible for hefty late fees.
101. Set aside enough money to pay state sales tax when you register the car.
102. Don't forget to activate or update your insurance policy before you take possession of the car and begin driving it.
Handling Private-Party Complications
103. Most sellers will be comfortable handling the sale at their home or office. Some might not be, however. Consider meeting at your bank instead. It's a safe public place, and by doing the transaction at the bank, you assure the buyer that your cashier's check is legitimate.
104. In some cases, the car you're buying might have a lien on it (meaning that means the title is in possession of a bank or other lender). Check with the bank or finance company to learn exactly how to proceed. Essentially, you need proof that the balance of the loan is paid off before the seller transfers the car to you.
105. To handle lien situations, you can conclude the sale at the bank that holds the title. Call ahead and ask that the title be ready. Then, once you pay the seller and the seller then pays off the balance of the loan, he or she can sign the title over to you.
106. Remember that in private-party purchases, you are buying a car "as is." That means there are no promises or guarantees after the sale concludes. The time to thoroughly inspect the car is before you buy it.
To find a dealership that knows how to treat shoppers right, please visit Edmunds.com's Dealer Ratings and Reviews.