Guide to Buying a Used Car Without Going Crazy

by Meg Favreau on 2 January 2012 6 comments

One night about a month ago, I was telling my friend about the brain-frying frustration I was experiencing trying to buy a used car off of Craiglist. "I feel like I can spend infinite time on this," I told her, "And there are infinite options."

"Everyone I know who has tried to buy a used car on Craigslist has gone absolutely crazy," she said. That response was like getting bird poop in your eye and then being told it's happened to other people — it's nice to know you're not alone, but it really doesn't help the situation.

It was a good reminder of how stressful buying a used car is, though, especially when you're buying from an individual though a classified site like Craigslist like I was. I spent a LOT of hours researching vehicles, goings for test drives, and heading to check out cars only to be told they just sold to someone else. I learned a lot in the process, and I did finally find a car — one that was in good condition and in my price range. No matter what you do, buying a used car is going to be stressful — nobody wants to throw thousands of dollars away on a lemon. I can't tell you that you won't be stressed out, but here's some information I wish I had known up front that will hopefully make your car-buying process easier. (See also: 5 Myths About Car Insurance)

A Few Things to Consider First

First of all, the suggestions in this article pertain primarily to buying a car from an individual or a dealer that does not provide certified pre-owned vehicles. My budget was $4,000 — low for a car, I know, but I wanted to avoid car payments at all costs. This meant that certified pre-owned vehicles were out of my price range.

Two of the primary things to check on when you're buying a used car have to do with the title, and you should find out about these before you even look at the car. First of all, make sure that the seller has the physical title, and that the title is in his or her name. If you hand over payment for a car, and that car turns out to have a lien on it (i.e., money is still owed to the bank for the car loan), you might not end up owning the car you just bought.

Also check whether or not the title is a salvage title. A salvage title means that at some point, an insurance company deemed the car in question beyond salvageable. While sometimes salvage titles pertain to theft and the car itself is fine, it often means that the car was in an accident. Even if the car was rebuilt, the car's structure is usually left weaker after this type of an event and is generally less safe.

Narrow Your Options

One of the biggest problems I had with buying my car was getting overwhelmed by choice. My main criteria was that I wanted the car to "run well for at least two years." But that left a huge number of vehicles for me to choose from. I felt that with my price range, I needed to take what I could get. But with some urging from my boyfriend, I further refined my criteria. I wanted a short car, because I only have street parking, and I wanted it to have under 100,000 miles on it. I also wanted to buy a car from someone who was moving or changing cars for a good reason (such as getting a bigger car for an expanding family), because I figured that'd net vehicles in better condition. While part of me felt like I might be missing out on a great deal by focusing my search like this, it did make things easier.

Make Space in Your Budget

Remember that the cost of the car itself isn't the only cost. There might be an increase in your insurance, DMV fees, or unexpected mechanic costs. Include funds for these costs in your car-buying budget.

Do Your Research

I did a LOT of research into the cars I looked at. Here are the big four sites that I used.

Kelley Blue Book

The Kelley Blue Book is the standard for finding what used cars are worth. Plug in the information on a car you're thinking of buying, and it will tell you how much suggested selling price of the car is. The site will even provide different price levels based on the car's condition.

Edmunds

Edmunds provides car reviews and gives suggestions on whether or not a particular used car is generally a good buy. If it isn't, they'll generally give suggestions on similar cars to look at. They didn't have information on a couple of cars I was interested, but in general, it was a very helpful site.

MSN Autos

The MSN Autos site has what I found to be one of the most valuable resources in my car search — reliability charts that show what problems different makes of cars usually have and the cost to fix them. For example, the 2002 VW Cabrio has moderate engine problems, but the repairs are all relatively inexpensive.

Carfax

Once you have a car you like, enter the vehicle identification number (VIN — it's at the base of the windshield), and Carfax will give you a report on the history of that car. It steered me away from an otherwise great-seeming car that turned out to fail the California emissions test five times in a row, and it showed me that the car I did eventually buy had no serious problems.

Check the Car Out

If you see a car you really like, make an appointment to see it as soon as you can. If it really is a good car at a good price, there is an excellent chance that someone else will buy it before you get there. This happened to me several times.

Get someone to go with you. Not only do you probably need the ride, but a second person can provide lots of help. My friend both helped me inspect cars and provided a voice of reason when I wanted to settle for a not-so-great vehicle just to be done with the whole process.

Check the car out carefully. Hopefully, this is a "duh" comment. There are a lot of great resources online already about what to look for — check out About.com's 10 Questions to Ask When Buying a Used Car From a Private Seller or Consumer Reports test drive checklist. If you have a trusted mechanic, arrange for him or her to look at the car.

If you are buying from a dealer rather than an individual, see what your warranty options are.

Buying the Car

Do your research to get as good of a grasp as you can on your state's car sale laws. We all know the truth to various stereotypes about the user-unfriendliness of the DMV, so this might not be easy. But a good scouring of your state DMV's website should give you the information you need about paperwork, when you need to report to the DMV, and fees.

Make sure to get documentation of everything associated with the sale, and pay with a cashier's check, not cash. If you didn't get the car checked by a mechanic before, bring it by soon to make sure everything is okay.

Above All, Be Patient

Remember what I said at the beginning about feeling like there are infinite options? I wanted so many times to give up in some way — to settle for a vehicle that wasn't really what I wanted, to go out of my price range and get a loan, to break down and whine about the fact that I don't live in a city with good public transportation anymore. But with some patience and research, I purchased a car that was kept in excellent condition and fit all of my criteria.

I'm thrilled about my new used car. I hope you enjoy yours too.

Do you have any other used car buying advice? Share in the comments below!

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Guest's picture

Can't emphasis enough to find a good mechanic and have the car thoroughly inspected. This is where most used car buyers make their biggest mistake.

Guest's picture
Kira

Absolutely. I've had people refuse to let the car they were selling be inspected - HUGE red flag! Most places will do it for about thirty bucks, but mine did it for free since we bring both our cars there.

Guest's picture

Yes Paul! I totally agree. I think first time buyers get a little bit excited in looking for a car -which I have experienced when we first bought our car. The solution would be: bring an experienced buyer or long time owner of a car for some advice. It wouldn't hurt to ask for one.

Guest's picture
Jeff Crews

I agree with using CarFax and being patient. This summer, I bought a used car, and a CarFax report helped me make the final decision. I actually used many of your main points (i.e. test drives, CarFax, Kelly Blue Book, etc.).

One thing I would recommend is checking car insurance rates for that specific car. You might buy a certain car and realize later the insurance is going to be through the roof.

Guest's picture

Having a professional come with you and check out the car is always something you want to do but there are certain things that you can do on your own. One of the ones that not a lot of people know to look for or how to look for it is rust. Of course if the rust is visible that is great but sometimes it isn't. One thing to do to look for the rust is to run a magnet over the car and if it doesn't stick as well to a certain spot then there is rust there or you can check for bubbles also. One other thing to make sure to do when buying a used car is to make sure to have a contract written up to protect yourself against possible discrepancies you may have with the seller later on. It will protect you if you ever need to go to court.

Guest's picture
seth

great post! one other thing i've found is that the Kelly Blue Book value is really just a rough guide. I like to also check Ebay COMPLETED listings (since what a car actually sold for is the best guide, like a comp in real estate). I also like to look at Carmax prices since they're no haggle and a pretty reliable gauge of what a dealer sells a top quality used car for. i learned a ton of great tips in this book i read: http://www.amazon.com/Sell-Craigslist-Autotrader-Ebay-ebook/dp/B008MQS09...