Determine Your Used Car Buying Budget
First of all you need to land on a budget. Not just the car, but insurance, gas, maintenance and repairs. That determines what you can consider – new or used and what types of cars. Don’t stretch out your budget too much in monthly payments or get temped by older luxury cars that are selling for cheap (because they usually have high maintenance requirements).
Here is one way to figure out the sale price you should be considering once you’ve deducted all the other expenses of owning a car from your monthly budget:
Edmunds true cost to own (TCO) can also help with that. Pick a year and model of car to get an idea of what the next 5 years will cost.
You can look for used cars on dealer lots, or you can find them private party. Private party offers better bang for buck, but you’ll do more legwork finding a car and sorting out the duds from the gems. Make sure to have your own mechanic lined up to inspect any car – dealer or private party, before making an offer.
Questions to Ask When Buying a Used Car
Here’s my canned list of questions to try and weed out the good ones from the duds before spending money on a pre-purchase inspection. If the seller doesn’t answer, then consider it your sign to move on:
- Are there any options you didn’t mention in your ad?
- Has the car ever been in an accident?
- Does it have a clean title?
- Are there any mechanical issues with the car?
- Are there any pending services I should know about – such as oil changes, tires, brake pads, timing belt, clutch, exhaust, etc?
- Does the air conditioning work?
- Do you have all the service records?
- Why are you selling the car?
- Understandably this isn’t a new car, but on a scale of 1 to 10, with 10 being the closest to new, how would you rate;
- The paint and body?
- Do the windows have any scratches, fading or cracking?
- Wheels and tires?
Test Driving a Used Car and Inspecting a Used Car
When I go to see and test drive a car, I prefer to meet at the seller’s house. How does the yard look? A nice neat yard is usually a good sign. If they are reluctant to do that (and some may be), meet at a coffee shop nearest their home (often well attended).
Take your time to inspect the car carefully before the drive. Inside, underneath, trunk and engine bay. Touch each flaw to draw attention to it (helps when negotiating). Are there any leaks under the car? Check for even tire wear as this can indicate alignment or worn suspension parts.
When test driving, have the owner drive it first. See how they drive it. Especially if the car is cold. Someone who jumps on the gas when the car is cold has probably given the car a hard life. Do they fly over curbs or ease gently off them? Suspensions last longer when you’re nice to them. Do they jam on the brakes or saw at the wheel? Bushings and steering gear take a beating.
Test Driving a Used Car
When it’s your turn to drive, pay attention to everything. Does the engine respond smoothly? Transmission shift crisply but not harshly? Brakes aren’t grabby or weak? Does the steering pull either way? Any odd noises or smells? When you come back from the test drive, check again for leaks under the car.
If it all seems good, arrange a time to have your mechanic check it out. Every used car will have issues. The trick is to avoid the big ones.
Things to Check on Used Car Test Drive
- Test drive on a quiet road with the windows down and the radio turned off. Tire/road noise at ~35mph is a good sign of alignment issues, or lack of tire rotations. Vibration at highway speeds may be wheel balance-related, wheel bearing-related, hub related (lack of hubcentric rings on the wheels). Vibration when braking at highway speeds means you may want to replace the brake rotors / pads due to uneven deposits (colloquially known as “warped rotors” which is usually a misnomer). Brake squeal, while annoying, can be totally normal and you may just need to grease the back of the pads.
- This only applies once you’re already committed to a price, and ready to take delivery of the vehicle. Before this happens, give the car a very thorough inspection. Never buy a car unless you or a mechanic you trust has looked at the vehicle on a lift. Using a flashlight, inspect for rust, exhaust leaks or any evidence of rework/welding jobs, condition of O2 sensors / wires, transmission, differential, anything missing, damaged bolts, frame damage / bent frame, condition of flexible brake lines, suspension bushings, bent suspension / alignment parts, tire tread wear pattern, and anything else you or your mechanic can think of. Most original body parts/panels have the vehicle’s VIN number somewhere on them. Replacement body panels don’t
Other Tips When Buying a Used Car
- Never look at a car in the rain. If it is wet you can’t see paintwork well and if the ground is wet you can’t hear it when test driving.
- When test driving, roll the windows up, turn off the AC and the radio. Then drive on highway and listen.
- Nowadays, I take a code reader and look for anything pending.
- Check the labels on the glass to ensure it all matches. If it has all matching factory glass, that is an indicator that it hasn’t ever been hit too hard. If something doesn’t match, look deeper for other indicators of previous damage.
- Flood cars are common, so always check around seat brackets and under the dash for signs of previous water marks.
- Be skeptical of cars that are “over detailed”. A car that looks brand new is not one that has a shiny interior or engine bay. New cars’ interiors and engine bays DO NOT SHINE.
- If the price seems too good to be true, it is. There could be something the seller is not telling you. They may claim they priced it for a quick sale, but use your instincts when the price is low. It could be salvaged, have a bent frame, need an engine / transmission rebuild, whatever.
- Always demand a bill of sale that lays out all terms of the sale in writing (what exactly you’re buying, what is the actual mileage, is the odometer accurate, what is the method of payment, how much you are paying, and under what conditions you will take delivery of the car). Some of this may seem redundant in light of the transfer of title form, but in small claims court written documents like a bill of sale are key to protecting yourself, anything that’s not written down becomes complete hearsay and puts you in a difficult position should you find yourself in court. You don’t need to be a contracts attorney, just use common sense. Put in your contract that you will not pay for or take delivery of the vehicle until the vehicle passes inspection at your expense.
- Before you fully commit to buying a vehicle, it makes sense to be familiar with how the particular car drives. If you can, test drive at least one other vehicle of a comparable vintage, so you know how the car feels and sounds, in general
Buying a Used Card from a Car Dealership
If you buy a used car from a dealership, find everything you can that’s wrong with it in under 3 months and call your salesman immediately. 9 out of 10 times they will fix almost everything under the standard 90 day limited warranty. Check all wear items such as tires, brakes, suspension components, etc. You would be amazed what they will do for free to keep you happy.
If you’re at all interested in modifying the car you’re looking at, there are forums dedicated to your car. Google knows. Go check out the forums, read those FAQs. Those places will tell you what breaks first, when it’s most likely to break, etc.
If you’re looking for best value / highest economic utility, gravitate towards the cheaper marque of the family of brands, and upgrade your lower-marque with parts from the higher-marque. ie upgrade your vw mkiv gti using audi tt or (a/s)4 bits. Commonality between platforms across brands is more prevalent than those buying the flagship marques want to believe.
If you buy used, and you don’t have a warranty, ignore the dealership. Find a reputable independant shop (using the forums you’ve already found / subreddits). The shop will be super happy to check out your prospective purchase if you work the deal a little bit – I test-drove my car to the nearest shop from the dealer and said “Hey, I called yesterday, here’s the $50 I promised to do a good once over. Show me what you find that needs to be fixed and explain why, and you’ll be my shop.”
If the car you buy was made before 2000 (or as late as 2005 in some models) CHANGE YOUR TIMING BELT. It’ll save you a lot of unnecessary money and repairs in the future.
A great resource for finding out how much other people have spent on the car you are looking is Truecar.com
It tells you how much the same car was purchased for and will give you a dollar amount that the dealer will sell the car. It is a good benchmark and Gives you a big edge in finding a new or used car
Also you can go to clearbook.com and get a trade in value that is based on actual data and trade ins. Kbb is a made up value and is just a corporation pulling some subjective number out of their ass
Tips for Selling a Used Car
When selling a car though, I like to try to receive payment in the safest way and place possible. For me, that means exchanging cash (paper money) inside a bank. My local bank has often been very accommodating of these kinds of transactions, and have even offered to make copies of the bill of sale, transfer of title forms, etc. A wire transfer is also acceptable. As the seller, I only like dealing in cash (paper money) because many other methods of changing money have the potential for scamming. Paypal can freeze money or reverse transactions depending on their whim/terms and conditions/claims by the buyer. Cashier’s checks are a favorite of scammers because they look official, and many people consider them to be perfectly safe, but fake/fraudulent/stolen cashier’s checks exist. Same goes for money orders. If you deposit a fraudulent cashier’s check, your bank will not help you sort things out. They will just remove the money from your account and that will be the end of it while you go to the authorities to help track down the scammer.