Buying a Used Car

Buying a used car is an exciting event.

But if it’s your first time or the car buying experience overwhelms you, it’s good to go in knowing what you need to do to get a good deal.

Much of buying a used car comes down to the homework you do beforehand. This sets you up to get a good deal once you get into the shop. The rest is about being respectful but firm in negotiations and thorough when reading through the paperwork.

We put together this buying a used car checklist to help make the process smooth for you. Happy shopping!

Determine Your Budget

How much you’re willing to spend on a used car should be the first box on your buying a used car checklist.

The reason why is simple: buying too much car is going to hurt your financial future. You’re robbing your future self of money by taking out too big a loan or agreeing to monthly payments you can’t afford.

And you could be putting yourself in jeopardy of other consequences, too.

There are a few things to consider about your budget when buying a used car:

  • How much money you’re willing to put down
  • How much you’re willing to finance
  • How much you can afford to pay each month (if you financed)

Determine these numbers and stick to them. If you do the work ahead of time, no dealer will be able to talk you into something you can’t afford.

Consider Your Needs

This is one of the tips for buying a used car people sometimes skip. But it’s just as important as setting a budget before you shop.

What do you need in a car?

Needs are different from wants. For example, maybe you need an SUV so you have enough space for your kids in the backseat. On the other hand, you might want a Bluetooth stereo—but that isn’t a requirement for your purchase.

Needs in a car typically come down to a few things. Comfortability, safety rating, size, space, and gas mileage are all common.

You can figure out what you need by thinking through what you’ll be using it for (commuting, work, driving your family around, etc.).

Do Lots of Research

There are a million tips and tricks for buying a used car out there. But doing research is the one tip you can never take advantage of enough.

There are likely dozens of car dealerships in your area. But which one has the car or type of car you’re looking for?

Having done a bit of research already—by setting a budget and considering your needs—start looking online at car dealerships and private sellers in your area.

Make a list of links of 3 to 15 (or more) cars as a starting point, then research the Kelly Blue Book value for each of them.

Researching the dealerships in your area helps you see what your options are. It also gives you a chance to look at the businesses themselves and find who has the best reputation. You’ll save time and money (and frustration) by figuring out where to avoid as well as where to call or visit.

Give Yourself Leverage and Shop Prepared

Unless you’re shopping at a no-negotiation used car dealership, you’ll want to go into the dealership with some leverage. Even if you’re calling ahead, it never hurts to be prepared and have some chips on your side of the table.

Leverage for shopping for a used car looks like knowing what you can afford, knowing what other options are available at local dealerships, and also knowing important information like your credit score which could be an asset.

In the latter example, knowing your exact credit score could help bring your interest rates down significantly. You might be able to get a better car than fit in your budget before.

Going to the dealership with examples of competitive rates nearby is also helpful. Sales staff are paid on commission and trained to keep you there as long as possible—meaning the hint of you going somewhere else could help when negotiating price.

Test Drive

Before you start talking price, take the car for a spin. How does it feel? Does it seem like it fits your needs and could be something you might drive for the next 3 to 5 years?

Sometimes, a car can look great on the website. Then you drive it and it just doesn’t feel right or there’s something about it that tells you not to buy. Or, best-case scenario, you love the car and confirm that by test driving it.

Buying cars online is becoming more popular nowadays. If you’re going this route, you may see if someone in your local community has a similar car so you can see it in person.

If they’ll let you take it on a test drive that could be a good thing, too.

Negotiate the Price

Now the fun part! 

There are many ways to get the best deal possible on a car. But as previously mentioned, so much of your buying a used car checklist happens before you go to the dealership.

Research, knowing your numbers, and shopping around for deals all should happen first.

Start with a realistic low price that’s probably lower than you expect to pay. Dealers are trained to upsell you. Doing this may help you end up in the middle—at a number you were totally comfortable with before.

Another good thing to know is that most car dealerships try to sell for 20 percent more than they purchased for. You can work backward, assuming they paid 80 percent of the list price for the vehicle, then try to talk them down to 10 or 15 percent.

Know When To Stop Negotiating

Playing from a position of strength sometimes means walking away. Some car dealerships will nickel and dime and go back and forth with you for hours. Some will be manipulative or really try to push you to close the deal.

If you find that you’re not making headway—that is, meeting in the middle—it may be time to remind them you have other options. Be polite but firm. There’s power in not sounding desperate or like you need to buy the car.

If a used car dealer ever starts being aggressive, inappropriate, or making you feel uncomfortable, leave right away. This doesn’t happen often but isn’t unheard of. Being harassed isn’t worth any deal on a used car.

Also, remember that some hassle-free dealerships don’t negotiate. This business model has become quite popular in recent years. Check online before you go in.

Some places may not be playing hardball with the price. They could literally just not be allowed to negotiate.

Get a Private Inspection (If Possible)

This applies more to private sales but getting an inspection before buying could be important. There’s only so much you can see from the outside about the shape any given car is in.

Taking it to an independent mechanic could save you lots of money down the road. This generally costs between $70 and $200 depending on the area and their availability. Try to schedule ahead of time or take advantage of any favors you can call in to score yourself a deal.

Wondering what to check when buying a used car?

  • Exterior/body condition
  • Glass
  • Suspension
  • Lights
  • Condition of the upholstery
  • Hoses and belts
  • Radiator
  • Battery
  • Tire condition

If you have a little room in your budget (or just want peace of mind) look for certified preowned dealerships in your area. These often have mechanic shops on the premises and come with some sort of warranty. 

Go With Your Gut

Ultimately, the last box to check off is an intuitive one. 

After you’ve done the research, shopped around, and negotiated, it’s your call. If the car feels right for you, agree to the deal.

Never, ever let a dealer toss in additional vague fees that weren’t settled on before. Question anything and read paperwork twice before signing on the dotted line.

Buying a Used Car Checklist

There’s your buying a used car checklist for shopping for a preowned vehicle. The process really comes down to doing some research beforehand then leveraging that information from a position of strength at the dealership.

Know your numbers, do your research, and have options. Negotiate by being polite but firm. And know when to walk away.

For more tips on buying cars, check out the rest of our website.