What Should I Do to Buy Used Cars?

Buying used cars is a great way to save money while still getting a reliable car that will get you where you need to go. But because you're not the original owner, there may be some variables in what you're looking at and how you need to shop.

Finding and buying used cars is a lot like buying new cars. You'll want to buy a car that fits your budget and has the looks and features you like. But when you buy a used car, you need to check some additional factors, such as the condition of the car. Whether you're already in the market for a used car or are about to enter the planning stage, these tips can help you navigate the process successfully.

Set a budget before you do anything

How much you can comfortably spend may be the deciding factor in your eventual choice of car. Buying a car is usually not the smallest purchase, even if you are buying a used car. If you're not planning on buying a car outright, some budgeting guides can help you determine the right amount.

While there are several ways to determine how much you can easily pay, we recommend using rule assessments first. The premise of this guideline is in the numbers: you should wait until you can buy a car with a 20% down payment, you won't take out a car loan for more than four years, and the total monthly cost of the car won't exceed 10% of your monthly gross income. These expenses include car loans, car insurance, and any other expenses you might expect.

You can also use a different 20% rule if you have other debt that needs to be paid off, such as a mortgage or student loan. That said, you shouldn't spend more than 20% of your monthly gross income on debt payments. Let's say you make $4,000 a month; 20% of that is $800, which is the amount you can use to pay off your debt. Your only other debt is a $350 monthly student loan, which is deducted from $800, leaving $450 for car payments and car insurance. This is also about 10% of the 20/4/10 rule. Figure out 20% of your monthly income and subtract your current monthly debt from that; The end product is the amount of everything you can afford to do with a car.

Figure out the essential features you need

As much as you may want a sports convertible, it's important to put your needs first when buying a used car. Take some time to think about how you will use the car and what features are best for you. Do you have a long commute and want something more fuel-efficient? A compact car or hybrid might be ideal. Do you have a large family that requires you to drive to a different clinic, clinic, and school every day? A minivan or larger SUV may be your best bet. Or do you plan to use the car for work purposes, such as delivering supplies for your lawn care business? You may need a heavy truck to do the job. Think about other features. For example, if you live in a snowy area, you may want a four-wheel-drive option.

Then, head to sites like Autotrader or Kelley Blue Book. These sites let you plugin details and use filters to filter cars that match your needs. NerdWallet suggests creating a goal list of five or so cars that have the features you want and then evaluating them using the Edmunds car comparison tool.

Finally, when you narrow your list down to specific vehicles, consider the cost of owning and maintaining each vehicle. If you need work done, are parts hard to find? How much do you spend on gas each week? Are there known problems or recalls in certain years of your favorite models? This helps ensure that what you choose is affordable and less likely to cause problems in the future.

Find the car and start browsing

Online resources are often the easiest place to find used cars near you. Many car dealers list their used car inventory online, which makes it easy to browse what's available and see how much it costs. You can also find private sellers in classified ads on social media and Craigslist. If you prefer to see the car in person, you can go the old-fashioned way and talk to the salesman at the dealership.

If you find a car that you like and meets your needs, double-check it. Ask the seller to provide a vehicle history report to see if the car has had any accidents or suffered any damage. See if they have all the service reports available. Verify all information about cars posted in their online ads. Find out how the car was used and if it had any major repairs.

Take it for a test drive and see how it feels before you make a decision. Note if there are any quirks or problems that the seller has not previously disclosed. If possible, take your car to a trusted mechanic and have them evaluate it to see if any repairs need to be made shortly. If so, you may need to keep looking.

Get the best deal

During the research phase of the process, make sure you know the average car price in your area. Keep your budget in mind and offer a price lower than your maximum purchase price or your pre-approved loan amount, but within the average price range, you find in your research.

Don't forget that when you buy a car, you have to pay taxes and other transaction fees; These should be considered in your budget and negotiations. Listing any issues you see on the car can guarantee a price below the seller's requirements. If you work with a dealer, make sure you understand all the costs of the contract. If the salesperson can't explain to you what some of the expenses are, ask for them to be removed. Take the time to read the contract before you sign it, and the car is yours.

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