Step 1: Starting out -- Why buy used?
If you've decided to buy a used car, you've already made a smart decision. You can get a car that's almost as good as a brand-new one without paying for the depreciation that wallops new car buyers as soon as they drive the car off the lot. Even cars that are only a year old are 20-30 percent cheaper than brand-new cars.But there are other good reasons to buy a used car:
- You'll save money on insurance.
- Bigger bargains are possible for the smart used car shopper.
- Used cars are more reliable today than ever before.
- Some used cars are still under the factory warranty.
- Most new carmakers now sell certified used cars, which include warranties.
- The history of a used car can easily be traced using the vehicle identification number (VIN).
- If you buy from a private party, the negotiation process is less stressful.
Step 2
At the beginning of the car-buying process, many people already know the car they want. But it's a good idea to stop right now and test your decision with this question: Will this car fit into my monthly budget? We'll explain how to determine what car you can afford in the next step. For now, make sure your choice isn't obviously exceeding your budget. Ask yourself, does it meet my current needs?You may need to expand your horizons when considering what to buy because you won't know what is available in your area until you really start looking. Consider building a target list of three different cars. You might want to think of vehicles in the same class. For example, if you really want a Toyota Camry, you should also be on the lookout for a Honda Accord, Nissan Altima or Chevrolet Malibu. These cars were built for the same market, but they have different features and sometimes lower prices.
Step 3
The value of a used car is based on its condition, mileage, reliability, performance and popularity. Of course you want a car that is reliable and performs well. But do you want the same used car everyone else wants? If so, you will pay a premium for it. In some cases, the only difference is the nameplate.How much difference in price separates good-but-popular cars from their good-but-overlooked counterparts? Two Edmunds.com editors recently shopped in the family sedan class. They found that 2-year-old Camrys and Accords were about $3,000 more than comparable 626s and Galants. For more on this subject read "How to Get a Used Car Bargain." If you are adventurous and want to shop for a killer deal, read "Used Car Deals: Program Cars, Rental Cars & Salvage Titles."
Step 4: Research your prospective used car.
You will find all the information you need to make an educated decision about what to buy on the Edmunds.com used car pages. The major topics are accessed by clicking the links to the left of the screen that list such information as prices, standard features, specs and safety, warranties, consumer discussions, photos and video and resale values.
A helpful feature is "Car Ratings" which evaluates the different components of the vehicle. You can also read reviews of the car by current owners. Finally, make sure you use True Cost to Own (TCO)® to see what other expenses you will incur (TCO data is not available for all cars).
Another essential part of the used car pages is Edmunds.com's True Market Value (TMV®) pricing, a helpful guideline when car shopping. TMV pricing is based on sales figures of similar cars across the country. We will go into more detail about how to use Edmunds.com's TMV later.
One last vital step to getting a great used car deal: Make sure you run a vehicle history report on any used car you are considering buying. Several companies sell these reports, which are based on the VIN, but AutoCheck and Carfax seem to be the most comprehensive.
These reports can reveal vital information about the used car, including whether it has a salvage title (it has been declared a total loss by the insurance company) or if the odometer has been rolled back. This is also the time to decide if you want a Certified Used Car. If you do, see our article that describes the certified used vehicle programs offered by each manufacturer.
Used car shopping will involve inspecting the vehicle to determine its condition. This process is simplified if you buy a certified used car that has passed a thorough inspection and is backed by a manufacturer's warranty. But while buying a certified used car removes a lot of the guesswork about the vehicle's mechanical condition, you pay for this service.
Most new cars are sold with a three-year/36,000-mile warranty. Therefore, if you buy a car that is from 1-3 years old, with fewer than 36,000 miles on the odometer, it will still be under the factory warranty.