Buying used can get you a great car for significantly less money. But they come with significant risks as well. How to choose a used car---without getting taken for a ride.

There are a lot of advantages to buying a used car, rather than a new one. Price is an obvious benefit. Used cars can be a lot cheaper than new cars, and thus keep you from having a monthly payment.

But how you choose used car can make all the difference. Choose the right car, and you can save a fortune over a new car. Choose the wrong one, and that brand new car will look like a bargain in hindsight.

There are strategies to use to choose a used car.

1. Find out the market value

This should be the first step in your used-car-buying process. You should have at least a ballpark idea of the value of any car you are seriously considering.

Kelly Blue Book and Edmunds.com have online tools that will enable you to get the value of just about any car. You will first have to get as many details about the car as possible. This will include make, model, year, mileage, options, and overall condition. The more information you can furnish, the closer you will come to the car’s actual value.

That value should be your starting point in any negotiation. It can also indicate how anxious the seller is to sell the car. For example, if the sale price is too high, the seller’s probably not motivated. But if it’s accurately priced—or price below-market value—you may be onto a good deal.

2. Carefully inspect the car

The condition of the car is a major indication of value. A well-maintained vehicle will be near the top of the value spectrum, while a poorly maintained one can be worth thousands less.

Pay particular attention to the following:

Make sure that the car is a comfortable fit. Check both the front and rear seats.

Carefully inspect every inch of the car. In the interior, inspect all of the seats, the floors, the doors, and the ceiling. Are there tears or stains? On the exterior, carefully inspect the paint job, the trim, and the bumpers. Are there any major scratches, dents, or evidence of repair? Also look at the car lights, the tires, and the muffler. Age or deferred maintenance will be obvious.

Take a nice, long whiff of the car. Some smells, like cigarette smoke and mildew, can be particularly difficult to remove. But the smell of burning oil or burning gas are much more serious, as they can indicate deep engine problems. Test them after the car has been running for a while.

Inspect the engine. A dirty engine can be an indication of poor maintenance. Check to see if there is oil on the engine. This could indicate leaks—or worse. Cracks or tired-looking hoses and belts can be an expensive fix, and another indication of poor maintenance.

3. Do a serious test drive

This isn’t just about driving the car see how you like it. While you are driving, you need to do a serious evaluation, particularly of all the “little things.” They can include:

Do a thorough check on the car’s amenities. Are they what you want? Power seats, steering, and windows? Are they working properly?

Check out the sound system. Does it meet your expectations? Or will you be constantly annoyed that it’s just not good enough?.

Test both the heat and the air conditioning. It may not seem important to test the heat on a sunny day in June, but come January, you’ll be thankful you did.

Carefully inspect if any warning lights are on or flashing. Don’t presume they don’t mean anything. Follow up with the owner or dealer about any required maintenance.

How does the car handle? Test it under high stress situations, such as stop and go, high speed, low speed, sudden acceleration/deceleration, hard turns and sudden stops. Make sure you get the car up to at least 55 miles an hour. Some things, like a bent rim, won’t be noticeable at lower speeds. Once you hit 55 or 60, it’ll be obvious something is off.

Listen carefully to the engine. A smooth hum is a good sound; sputtering or knocking can indicate serious problems.

Check the brakes repeatedly. Listen for sounds of squeaking, grinding, or metal-on-metal.

Pay particularly close attention to how the car shifts. Does it do so smoothly, or is their hesitation? (Could indicate a transmission problem.)

Watch the exhaust. Smoke can be an indication of a problem, and blue or white smoke can be an indication of a big problem.

4. Get the car checked out by a mechanic

Think of it as similar to a home inspection performed on a house you’re about to buy. You should have the car thoroughly inspected by mechanic.

This is sometimes referred to as a pre-purchase inspection, and it can cost $100 or more. But it’s money well spent, if it enables you to avoid buying a car with serious problems.

Whatever you do, do not rely on the seller’s representations, or recommendations by his or her mechanic.

5. Get the repair history on the car

You can order this through Carfax but you’ll need both the license plate number and vehicle identification (VIN) number in order to do it.

A pattern of well-spaced repairs can be an indication of a well-maintained vehicle.

However, frequent repairs, particularly for the same malfunction, could be an indication of a serious problem. It could even be the reason why the seller wants to get rid of the car.

6. Consider the relationship between a car’s age and mileage

What’s more important, the age of vehicle or the number of miles it has? That’s actually the subject of much debate, and there’s no scientific answer as to which is more important.

As to age, cars depreciate in value by an average of 60% within the first five years. After that, they depreciate much more slowly.

Depreciation due to mileage is actually a relative concept. Vehicle age and mileage go hand in hand. Age is certainly a factor—a measurable factor—but mileage really depends on the age of the car more than anything else.

In general, a typical car will be driven between 10,000 and 15,000 miles per year. You might want to use 12,000 miles as a general convention. Using this as guide will tell you how important mileage is in the value of a car.

For example, if a car is five years old and has 60,000 miles, its value can be based on its age. This is because the number of miles driven is consistent with the expectation of a car that is five years old.

But if the car is five years old, and it has 80,000 miles, this will be considered excessive mileage. That will result in lower value. Use the online tools with Kelly Blue Book and Edmunds.com (listed earlier) to determine how much the excess mileage will affect the value of the car that you want to purchase. The effect will be different for each type of car.

On the flip side, if the car is five years old, and has only 40,000 miles, this will result in a higher value for the car. Again how much of a difference it will make will depend upon what is revealed with the online valuation tools.

7. Always be ready to walk away

Anytime you are purchasing a car, or negotiating any kind of business transaction, the greatest strategy is to be ready to walk away.

If you have done your homework, you will know how much the car is worth. And if you have inspected the car, test driven it, and had it checked out by a mechanic, you know what it’s all about. Make your best deal based on those facts.

If the seller is playing hardball, and it’s clear that they are asking too much for the car, your strongest statement be to just walk away. It’s a dangerous move, but it’s the best way to avoid paying too much.

There are all kinds of reasons why the seller may hold out for a higher price. It could be that he just put the car on the market. But it could also be that he needs a certain amount of money in order to purchase his next car. Still another possibility is that he is absolutely clueless as to what his car is worth.

Each of those issues are the seller’s problems, and not yours. You don’t have time to sit and wait for him to figure it out. You’re better off to move on to the next potential purchase.

Summary

Buying a used car comes with different challenges than buying a new car. No one wants to pay too much money for a car, or buy a car that will turn out to be a lemon.

Keep these strategies in mind, and you should be able to get a good used car at a very reasonable price.

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About the author

Total Articles: 155
Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed “slash worker” – accountant/blogger/freelance web content writer – on Out of Your Rut.com. He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides “Alt-retirement strategies” for the vast majority who won’t retire to the beach as millionaires. He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering work-arounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the “savings barrier” and transitioning from debtor to saver. He’s a regular contributor/staff writer for as many as a dozen financial blogs and websites, including Money Under 30, Investor Junkie and The Dough Roller.