Aaron Widmar
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Beginner’s Guide: 10 Steps to Buying a Used Car

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man and woman used car shopping at a dealership
Before you visit any car dealerships, follow this step-by-step guide

Buying a car can be intimidating, especially if you’re buying a car someone else used to own. You have a lot of options on the market and don’t want to spend your hard-earned money on a vehicle that lets you down. To help you through the process of buying a used car, here’s a simple beginner’s guide.

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Step 1: List out all of your needs

If you’re a parent with four children, you’ll need three rows of seats. If you live somewhere with heavy snowfall, you’ll want a vehicle with all-wheel drive. If you have a boat, you’ll need something with sufficient towing strength. Write a list of all of these types of necessities you have.

Step 2: Narrow your search

Now knowing what you need, you can build a list of segments, classes, and trims that fulfill your requirements. There are tons of options on the market, so don’t hesitate to omit any less-than-suitable possibilities.

Step 3: Research the candidates

Comb through expert and owner reviews on the models you’re considering. Are these models proven to be reliable? Do they have a noticeable history of problems? Toss out any vehicle candidates that could be risky purchases.

Step 4: Skip in-demand models

Popular used cars that are in high demand can come with higher-than-necessary price tags. Consider bypassing the most obvious options if they seem overpriced. Instead, look at similar models from brands you may not be as familiar with.

Step 5: Check the going rate

Consult online valuation guides like Kelley Blue Book to determine what the average price of each preferred model is. Consider the age, mileage, and condition of each possibility, using median amounts for each aspect. That way you’ll know when you see a good deal or steep overpricing.

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Step 6: Know your budget

It’s never a good financial move to pay for something you can’t afford. You shouldn’t spend more than 10 percent of your monthly income on car payments, according to NerdWallet (plus another 20 percent on gas, insurance, and other operating expenses).

Take a good, hard look at your monthly budget and figure out what kind of payment you can afford. This will give you an idea of how old a vehicle you should be looking for.

Also consider your credit history, since that will affect how much extra you’ll pay in loan interest.

Step 7: Find your top three options

The majority of car shopping can actually be performed online nowadays. Browse the pre-owned inventory of all your nearby car dealerships to find the top three models that fit your criteria.

Keep in mind that dealerships can sell used cars from manufacturers other than what’s in their name, so a Ford dealership might have a great deal on a used Toyota.

Step 8: Schedule an in-person visit

Before deciding to buy your favorite contender, it’s crucial that you sit in and drive all three options. A vehicle can feel very different in person than how it looked in pictures. Schedule a test drive for each car, even if they’re at different dealerships.

While you’re assessing, pay attention to factors like ride height, dimensions, blind spots, major damage, driving dynamics, stability, roominess, and engine performance.

Step 9: Check the vehicle history

The primary difference between a new and used car is the former owner(s). Apart from the seller’s mechanical inspection, the best way to investigate a car’s history is to peruse the vehicle history report.

This log records all official maintenance, accidents, and changes in ownership for that specific car.

Step 10: Close the deal

At this point, just work out the finer points of the purchase: negotiate the price, finalize the paperwork, set up monthly payments, transfer your insurance coverage, register the new car with the DMV, etc.

Once you own your car and drive it off the lot, all the research, penny-pinching, and negotiating will have been worth it — especially since you’ll have purchased a used car you can rely on.