Get the Best Used Car For Your Money: What You Need to Know

Window Sticker

Window StickerA really great new-to-you car could be in your driveway soon. 

Used cars can offer great savings, but the perception is that the risk is great, too. That’s not necessarily so. The best used cars often have been checked over and tuned up or repaired; they often come with a warranty, they can offer many years of driving and the biggest advantage is that they don’t suffer the depreciation that a new car does, so (in theory) your investment only depreciates as you own and drive the car. 

But, the risk of overpaying, buying a car with mechanical problems or getting one that was damaged—wrecked or flooded—and will have long term issues scares people off. Also, while a used car’s mechanical function can be pretty pristine, the interior can show the wear of prior ownership, with worn or stained carpets, faded upholstery or unidentifiable smells. 

However, if you know what you want and are dedicated to shopping for it, there are great deals to be had in almost any price range. This is what you need to know.

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Set your budget

Start with downpayment, trade-in value and monthly payment. Then factor in insurance, fuel, parking if that’s an expense, and plan to buy tires and maintenance within six months for your true monthly cost of ownership. You may need to play with a car payment calculator to determine a monthly payment amount that includes the sales price, taxes and fees. Even if you’re paying cash, these calculators are great for knowing what your total bill will be. 

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Is a used car really the right car for you?

With some of the incredible deals on cars these days a used car may not make sense. Fully loaded sedans can be had for $25,000 ($250 a month with a decent downpayment or trade in) and come with 4 year warranties, brand new tires and top of the line features like surround view cameras and Apple CarPlay. Yes, you’ll take a depreciation on a new car—meaning it’s worth about 20%- 30% less than what you paid for it the minute you buy it— but you may spend the same amount of money for a used car with fewer features, a lot of miles and little or no warranty. 

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Decide what features you really need

The age of the car, mileage, and the top features you want— blind spot monitors, rear view camera, pre-crash monitoring for instance– are a good place to start. If you absolutely need all wheel drive, for instance, make sure that’s on the list. Keep in mind that many recent top features like safety technology and driver assist features are often available on cars that are 3 or 4 years old, so look for those, too. This will save you from wasting time looking at cars that are not a fit. You can adjust this list if you can’t find a car with these features in your price range or if they all have these features, broaden your wish list.

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Yes, you can find a used car with a warranty — just make sure it’s a good value

Many used cars will have some portion of the manufacturer’s warranty remaining. Some also have a dealership warranty and may have other bonuses like lifetime oil changes or free carwashes. If that’s the case just make sure you can take advantage of this; if the dealership is 100 miles away you may not find it’s feasible to go there for free oil changes, and if you move away, a dealership warranty may be worthless. Also, not all warranties transfer to new owners, so understand the terms of any warranties. 

Some used cars come with practically full warranties, such as dealer demo model or service loaners. Also, certified pre-owned cars, which is recommended for luxury cars that tend to have pricier repairs, extend the original manufacturer’s warranty for two or three years.

In comparing cars with warranties to those without you may find benefit—either for getting the warranty or skipping it. Cars with high reliability and good maintenance records may never take advantage of a warranty. For cars that are a bit more high maintenance, a warranty may save you money and worry.

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Decide what type of car you want

Once you’ve narrowed down your must haves and set a budget, begin identifying the cars you would consider buying. Think about the brands you are comfortable with. If the car has a recall—and these are commonplace these days—specialty maintenance or repairs, you want to be sure that you have access to a brand dealer or authorized repair facility. 

Then, learn which dealers have these cars for sale and keep a list. I like Autotrader’s app because it keeps that list for me and it allows me to change my filter options if I have a change of heart while I’m shopping. Not all apps have the same list of cars, so shop around; I also like Kelley Blue Book, True Car, and Capital One Autonavigator. Also check CarMax and Carvana, both good used car sources. Neither will negotiate on price but stand behind their sales.

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Begin to vet your selections

Once you’ve narrowed down the brand, model and identified some potential new cars, start to look closely at the information about them on line. What additional features do these cars have? Are there things missing that you need? 

And read the CarFax. Dealers should offer a CarFax report on every model they sell; individual sellers don’t typically but you can buy one if you’re serious about the car. You can also Google search a VIN number for information and you can check Experian to see if it has been flood damaged. 

Contact dealers via email to ask questions and negotiate pricing

Now you can start your outreach to dealers to ask questions that your research didn’t answer. You can also negotiate price, but you may or may not have luck. Often, dealers price used cars competitively against the market, taking into account things like mileage, damage they are not willing to fix or the condition of the tires and adjust the price accordingly. That doesn’t mean you’re getting a bad car or a bad deal, it just means you need to be aware of these things and how the impact the price.

Some buyers have luck finding similar models for sale and making an offer of a competitor’s price on the exact model they want. For instance, if you identify four 2017 Toyota RAV4 XLE models with about 30,000 miles priced from $21K-$24K, the dealer with the higher priced model (that is in the color you want) may negotiate down a bit in order to get the sale. 

If you can tell how long a car has been on a dealer’s lot, this may also impact negotiability. The dealer has paid for the car and until it’s sold, it’s essentially costing the dealer money. Negotiability may be more likely on cars that are out of character for the dealership. A BMW on a Subaru dealership lot for instance, may inspire the sales manager to be more negotiable since they are less likely to have BMW buyers coming to the showroom to browse and will have to work harder, and spend more money, to market that car. 

Take a test drive 

Never buy a car without taking a test drive. Also, take photos inside and out so you can remember clearly what you saw and experienced. 

If you’re ready to buy, arrange a pre-sale inspection

Even if a car is under warranty you want to have it independently inspected. Be transparent about it; most dealers will let you take the car to a nearby garage for inspection. Others won’t, but they should allow you to have a mobile mechanic come to the dealer to do the inspection, including using the service bay to inspect the undercarriage. 

Either way, you should hire the mechanic, pay the bill—typically about $100— and listen to what the mechanic has to say. If the car has been wrecked, flooded or had major parts replaced, the mechanic should be able to tell. The mechanic should also run an OBD report by plugging a computer into the onboard diagnostic system. This will show any issues that haven’t been fixed. 

Assess what needs to be repaired or replaced

From worn tires to time to replacing the timing belt, you don’t want to bring home a car that needs more attention than you had budgeted for. The presale inspection should turn up some of these issues; looking at the car’s maintenance history and the manufacturer’s recommended service schedule will help. Ask the dealer, too. The sales person or service manager may have some insight into how long before major systems need maintenance or how long certain parts will last, giving you an idea of what expenses you may have on the horizon.

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And… start the sales process

With your financing or wire transfer ready to go, begin your purchase. If you have a trade-in, make sure the title is clear and that the dealer will give you a reasonable allowance for it. If the dealer isn’t interested in your trade-in or offers a lower price than you think it’s worth, CarMax or other used car dealers may be the way to go, or you may want to sell it privately. 

Some dealers will prepare all the paperwork and allow you to review and sign on line, others require physical signatures. Just be sure to take time to read all the documents, ask questions for things that are not clear and be sure that you agree to everything being sold to you. It’s fine to object to any add-ons or extras that you don’t want and to ask for those to be taken off the bill.

A used car can be a great deal, and if you do your homework, it can be a car that you feel confident about, too.

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Journalist, entrepreneur and mom. Expertise includes new cars, family cars, 3-row SUVs, child passenger car seats and automotive careers... More about Scotty Reiss