Buying a Used Car with Car Smarts

By Lauren Fix, Car Coach Reports

If you are buying a used car, you’re not alone. Whether a private-party, website, app, or dealership sale, nearly 41 million used vehicles changed hands each year. With so many choices, finding that one right car for you could be a challenge. Here are some steps to help you find and buy your perfect used car with Car Smarts and save money.

How Much Car Can You Afford? 

The first rule of thumb: If you’re taking out a loan to pay for your car, your car payment should not be more than 20 percent of your take-home pay. If you’re sticking to a tight budget, you may want to spend even less. Used cars will likely need some upfront maintenance, such as new tires and fluid changes. Then there are the other ownership costs that are easy to forget, such as fuel cost and insurance.

If the car you’re planning to buy is out of warranty, it might be a good idea to set aside a “just-in-case” fund to cover any unexpected repairs. Purchase an extended warranty to protect against unexpected large expenses. According to a recent AAA study, the average auto repair bill is now between $500 and $600. One in three motorists can’t pay that bill without incurring debt. Consumer Affairs has a list of the top 15 best-extended car warranty companies. 

Build a Target List of Used Vehicles 

So if you’re looking to save money, consider more than one brand. Make a list of three cars that meet your needs and fall within your budget. Search out car reviews online to find the best insight on your choices.

If you’re planning to buy a less than five-year-old vehicle, a Certified Preowned (CPO) vehicle is a wise choice because the carmaker backs a warranty, or you can purchase an extended warranty. Look for the dealerships that sell new vehicles of the same brand,  so if you wanted a CPO Nissan Altima, for example, you would need to buy it from a Nissan dealer.

Check Prices

Prices are driven in part by where you’re shopping. Look online at places such as, CarMax, Carvana, local dealer websites, and private-party sellers such as eBayMotors and BringATrailer. Private-party sellers will typically have the lowest selling price, while CPO vehicles will typically cost more due to the warranty protection. 

Credit: Firzafp

Check the Vehicle History Report

It’s worth the money to get a CarFax or Auto Check report, but this will not always tell you the full story. If the car you’re looking at has a bad history report, its best to walk away.

These reports can reveal vital information about the car, including whether the odometer has been rolled back or if it has a salvage title, which means it has been declared a total loss by the insurance company. Use the car’s vehicle identification number (VIN) to get this information. Most major dealers offer these reports for free if they have the vehicle in their inventory.

Test-Drive the Vehicle 

Test driving a used car is the best way to know if this is the right choice for you. It’s also an excellent way to assess the car’s condition.

Be aware of important factors such as seating comfort and space for all rows, visibility (are there blind spots), car seat installation, and safety features like backup cameras, active cruise control, blind spot detection, cross-traffic alerts, and more. These safety features will lower your insurance rates too.

Check out the tires. Has the tread worn evenly, or is it bald in certain places (which could be a sign of other issues)?

Are the brakes squeaking? Is the brake pedal spongy? These are more signs of issues you might not want to take on after buying the car.

Open the hood. You don’t have to know a lot about cars to see if something looks wrong. If something is leaking, steaming, or covered in oil, it’s time to ask questions.

Does the air conditioning blow cold? Do headlights, brake lights, and turn indicators work?

After the test drive, ask the owner or dealer if you can see the service records. These will show you if the car has had the scheduled maintenance performed on time. If they do not have maintenance records, take it to a mechanic before making any offers! 

Have the Car Inspected 

Always have a used car checked with a prepurchase inspection. It will cost $100-$200 and can alert you to problems you may not find yourself.

Failing to do so could cost you thousands of dollars in repairs down the road. Don’t get caught out by buying a flood-damaged car or one with serious issues that have been masked.

A private-party seller will probably allow you to do this without much resistance. Most dealerships will let you borrow a car for an outside mechanic to inspect.

If it is a CPO car, there has already been an inspection and the car has a warranty, so there is little reason to take it to an independent mechanic.

Negotiate a Good Deal

Negotiating doesn’t have to be a painful experience. If you are reasonable and have done your homework on pricing, you can make a fair deal pretty quickly and easily:

Make an opening offer lower than your maximum price, but in the ballpark based on your average price paid research.

Explain that you’ve done your research and have facts to support your offer.

Remember that this is a business deal, not a flea market.

Get the Paperwork Done 

Check with your insurance carrier before making your final decisions, which could be the difference between affording the vehicle and making your budget too tight. Get your insurance policy in place before driving away the car or truck.

Some people want the peace of mind that comes with extended warranties, so this is something you might want to consider unless the car is still under the manufacturer’s warranty or is a CPO vehicle. Do your research and check out places like

Don’t forget, you are also responsible for sales tax and license fees.

If buying a car from an individual owner, make sure the seller properly transfers the title and registration to you. Get a signed bill of sales too.

Rules governing vehicle registration and licensing vary from state to state. If possible, check with your local department of motor vehicles to make sure there are no past-due registration fees you’d be responsible for should you buy the car.

Now you’re ready to show off your new ride. Enjoy the drive!!

Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host.  A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.   

Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak. 

Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.  

Check her out on Twitter and Instagram @LaurenFix.

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