Brand-new cars gleam, boast the latest gadgets and smell that irresistible “new car” scent. But they also come with price tags that can make you gasp — not in a good way.
According to Kelley Blue Book, the average cost of a new vehicle in May 2021 topped $41,000. Ouch.
If you want wheels that won’t break the bank, point your search toward the used-car market. You could save a little — or a lot — on your next ride.
7 Essential Tips for Buying a Used Car
Buying a car can feel overwhelming, especially if you don’t know much about automobiles. Then there’s the question of when and where to buy.
Understanding the key steps for purchasing a used car will reduce stress and, most importantly, help you keep more money in your pocket.
1. Pick the Best Time to Buy
Used cars become available year-round as owners end leases, post listings or trade vehicles in. But some moments are better for finding bargains.
Matt DeLorenzo, senior managing editor at Kelley Blue Book, says big dealership promotions tied to new-model events often increase used-car inventory — which can benefit buyers.
“[Dealerships] will have more used vehicle inventory as a result of those types of promotions,” he noted.
Look for major sales periods around holidays like Memorial Day, the Fourth of July and Labor Day.
The end of a model year — usually September or October — is another favorable window, DeLorenzo adds, because dealers are motivated to move inventory to make space for incoming stock.
Avoid weekend visits when lots get crowded and staff attention is divided, Sharifi advises. Weekdays and off-peak hours usually earn you more one-on-one time with sales personnel.
“The end of the month (or the end of a quarter) can also be a good time to strike a deal, since dealerships may need to hit monthly or quarterly sales goals,” he said.
2. Decide Where to Shop — and Where to Be Cautious
Your choice of where to purchase a used car can help you avoid buying a lemon.
DeLorenzo suggests looking at franchised dealerships that offer certified pre-owned (CPO) vehicles — used cars that have undergone detailed inspections and usually include some warranty protection. Non-certified options can be cheaper but often have higher mileage and more maintenance needs.
Be cautious of independent lots that promise to get you a car regardless of your credit history or situation.
“Typically they’ll try to get you in with a low price, but you may not be getting the best quality car,” he said. “The other thing is that if you get your financing through those types of dealers, they typically charge you a much higher interest rate.”
DeLorenzo recommends getting pre-qualified for financing through a bank or credit union before hitting a dealership. That gives you a benchmark to compare against dealer financing and provides negotiating leverage.
For any dealership you consider, check online reviews and ask friends or family for recommendations if they’ve recently bought a car.
Apart from dealerships, reliable online marketplaces like Autotrader, Kelley Blue Book, Carfax and Edmunds are good places to search — or you can deal with a private seller.
Buying from a private party can give you a clearer picture of the car’s usage, maintenance history and any recurring issues, says Ron Montoya, senior consumer advice editor at Edmunds.
However, private purchases typically mean you’re buying as-is and must arrange your own financing. Make sure the owner has a clean title and full ownership.
If price is your top priority, private sellers usually offer lower prices because dealerships factor in overhead, repairs and marketing into their asking price.
3. Choose a Vehicle That Actually Suits You
It’s easy to fixate on stats like age, miles and sticker price, but select a used car that meets your needs for the time you plan to own it. A growing family might quickly find a two-door coupe or tiny hatchback impractical.
“You want to make sure there’s enough room for you,” Montoya said. “Take a look at the cargo area. Take a look at how easy it is to see out of the vehicle. Test out the entertainment system.”
4. Decide How “Used” You Want It
The older the vehicle, the less it will cost — but also the more likely it is to require repairs. Everyone has a different tolerance for maintenance and potential issues. A general benchmark is about 12,000 miles driven per year; a higher average suggests greater wear.
Montoya stresses that buyers should weigh the vehicle’s age, mileage and price to find the right trade-off.
Purchasing an extended warranty or service contract can provide reassurance by covering certain repairs and maintenance.
5. Make Sure the Price Is Fair
Before agreeing to a price, check the car’s value so you don’t overpay. Tools from Carfax, Kelley Blue Book and Edmunds can help you estimate a fair price.
Compare similar listings to get a sense of market value, but remember no two used cars are identical due to differing histories and upkeep. Use this data when negotiating, and be prepared to walk away if the deal doesn’t feel right.
When calculating your budget, include related expenses like sales tax, insurance and registration fees.
6. Review the Vehicle History Report
Some visible signs — rust, worn pedals or mismatched paint — can hint at a car’s past troubles.
But don’t rely solely on appearances. Pulling a vehicle history report (for example, from Carfax) is a crucial step. You can look up a report using the vehicle identification number (VIN).
If you’re buying from a private seller, you’ll usually need to pay for the report, so wait until you’re seriously considering the car. Reports typically cost between $25 and $40.
If you’re comparing several vehicles, buying a multi-report package reduces the per-report cost.
Dealerships should provide a history report free of charge.
Watch for inconsistencies in odometer readings or a branded/salvage title, which indicates substantial prior damage.
“Severe accidents and instances where a car has been declared a total loss should signal the buyer to use caution,” he said. “That said, a small fender bender shouldn’t always mean that a buyer should walk away from a great deal.”
7. Always Test Drive
Never skip a test drive before buying. If possible, take a mechanic along for an on-the-spot inspection.
“Some general things you can do on your own without being super knowledgeable about cars is [to] turn off the radio [and] listen for any strange noises,” Montoya said. “See if the steering wheel stays straight when you drive down the road. Does it pull to one side? Look at the tires to see how old they are.”
For any used-car purchase — especially from private sellers — have your mechanic inspect the vehicle before finalizing the deal.
Why a Pre-Owned Car Is a Smart Financial Choice
Cars are depreciating assets: their value drops over time. The steepest decline happens in the first year of ownership for a new vehicle.
Jim Sharifi, previously a content editor at Carfax, notes research indicating a new car can lose as much as 10% of its value within the first month.
“In the first year of ownership, depreciation can continue, and that same car could be worth up to 20% less than its original sale price,” he said.
When you buy used, the initial depreciation hit has already been absorbed by the original owner, and the asking price reflects that loss.
Purchasing a pre-owned vehicle doesn’t mean settling for an ancient, unreliable model. Cars just two or three years old often appear on lots when leases end.
These vehicles frequently have low mileage, one previous owner and remain in excellent condition — sometimes still carrying a trace of that new-car scent.
Nicole Dow is a senior writer at Savinly. Former staff writer Carson Kohler contributed to this post.
