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New cars typically depreciate and lose about 10-20 percent of their original value when they are driven off the lot. Most cars will lose an additional 10 percent in value during the first year. That’s up to a 30-percent loss in value during the initial year of ownership. Paying a lower initial purchase price for the same model used rather than new is a key motivator. But there are also many other factors at play when shopping for used vehicles.

1. Choose a Vehicle With Utility In Mind

It’s common advice to focus on the numbers: age of the car, mileage, etc. But you also want to focus on the features and attributes that’ll fit your needs for the duration of ownership. If you have a family to accommodate, you might want to re-consider that sporty two-door coupe. Just because it has 4 seats doesn’t mean they are all equally functional, especially rear seats with no headroom/legroom. If safety is of the utmost priority, check out the Insurance Institute for Highway Safety for crash tests. Narrow the field by making a list of must-have features. 

You want to make sure there’s enough room for you and whoever you’ll be carrying in the passenger seat. Inspect the cargo area. Will your snowboarding gear fit? Will your dog be comfortable in this car on long journeys? Beyond that, consider if it’s easy to see out of the vehicle, identify the blind spots, and so on. Don’t forget to trial and test the entertainment system’s functionality, whether it’s Bluetooth or AUX, as well as the quality of the system and speakers.

2. Determine How ‘Used’ You Can Go

Purchasing a used car is a foolproof way to gain options and features that are usually costly on new vehicles, for just a fraction of the price. Higher trim levels and option packages on used cars don’t influence the price as much as they do with new cars.

The older a car is, the cheaper it’ll be. Unfortunately, the older it is, the higher the chances for serious mechanical or electrical issues that will require repairs. We all have different comfort levels when it comes to what we’re willing to sacrifice and deal with. You’ll have to decide for yourself, and align your own shopping experience with that fact in mind. For reference, a general rule of thumb is that the average car is driven about 12,000 miles per year. You can find out your potential vehicle’s estimated yearly mileage by referencing the VIN history report or by dividing the number on the odometer with the age of the vehicle. A higher average could mean the car has experienced more wear and tear.

Although this is not the only way to estimate wear and tear. Another factor that’s important to consider is the usage case scenario the car experienced. For example, short trips themselves will not damage the engine. The possible damage occurs from the engine never reaching operating temperatures or not staying at operating temperature long enough. Repeated “short trips” in a cold environment can result in excessive condensation in the crankcase. Obviously, attempting to have the buyer divulge this information is not going to be easy, and you’ll be depending on the honesty and truth of his/her word alone. Nonetheless, it’s something to keep in mind.

As a used car buyer, you have to strike a balance between the age of the car, the mileage, and the price you’re willing to pay.

3. Make Sure Your Budget Allows It

It is wise to research the value of the car to make sure you’re not overpaying. Services like Carfax, Kelley Blue Book and Edmunds all have price appraisal tools online.

You can also compare similar vehicles listed on the market to get an estimate of the car’s value, but keep in mind, no two used vehicles will be the same due to how they were driven and maintained. Use all this information when you sit down to negotiate, and don’t be afraid to walk away if the price is not fair.

When you’re looking into budgeting for a car purchase, make sure you’re factoring in all the associated costs. Things like sales tax, insurance and getting the car registered all add up to a considerable sum. Use our Loan Calculator Tool to compute the best loan plan for you. Generally speaking, you should aim to put about 10% down and finance the car for three years. Ideally, the total of your monthly auto expenses shouldn’t be more than 20% of your monthly take home pay. Finding a balance that works for your lifestyle is key, it’s also the most difficult part.

4. Check Reliability And Ownership Costs

Every used car is different by nature. Cars define you, they establish your social status, they are the source of livelihoods, they are personal extensions of your identity. Each car has a different history because of the subjective nature of ownership. Some have been driven more, taken care of less, some have been abused, others have been babied, barely driven, and perfectly maintained. Due to these inherent fluctuations, you want to make sure you’re choosing models known for their dependability. This is the only logical decision making apparatus and control we have among all the variables, especially if you can’t accurately gauge the previous owner’s treatment of the vehicle. If you’re looking to build a complete picture of a car’s history, you can try using the services of Consumer Reports and J.D. Power. They both collect maintenance reports from owners and have a rating system for all used cars.

This brings us to the closely related issue of the total cost of ownership. Some cars are cheap to buy, but will cost more in the long run because of insurance, maintenance, repairs and depreciation. Several automotive websites, such as Kelley Blue Book’s Five-Year Cost to Own or Consumer Reports’ Cost of Vehicle Ownership, show estimates of these expenses.

Finally, another great way to determine a car’s reliability is to visit online forums. Specifically, visit online forums that are dedicated to discussing the car you’re looking at in particular. Many users will compile a list of “Common Issues” and similar data from their ownership experience. Use this to your advantage! Prepare a list of common issues you’ve found for the car you’ll be test driving, focus on what you’ve learned from other owner’s experiences. Learn the easy way, not the hard way.

5. Verify The History Of The Car

At times, just looking at and physically examining a car will give you some idea of its history.

But don’t just assume a car’s history. Getting the car’s history report using it’s VIN number, like through Carfax, is a crucial step when buying a used car.

You’ll have to purchase the report if you’re buying from a private seller, so wait until you’re seriously interested in a particular vehicle. If you’re buying from a dealership, the salesperson should provide a copy of the vehicle history report for free.

Keep an eye out for discrepancies with the odometer reading and if there’s a branded title, which indicates that the car has been significantly compromised in some way.

Severe accidents and instances where a car has been declared a total loss should signal the buyer to use caution. On the other hand, a small fender bender doesn’t always have to be a deal breaker, especially if the price is right.

6. Test Drive!

A test drive is essential. It can make or break a potential purchase. If you can bring a mechanic along with you, even better. 

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, especially while driving. See if the steering wheel stays straight when you drive down a level road. Does it pull to one side? Look at the tires to determine how old they are.

Don’t just look at the tread. Each tire should include a four-digit number marking the month and year it was manufactured. Tires older than six years can be dried out and need replacing.

For any used car purchase, especially if you’re buying from a private seller, you should have your mechanic inspect the vehicle before committing to buy. As long as rivalry exists, there will always be a conflict of interest, you can’t depend on the sellers word as a means to an end.

Remain Confident!

Car shopping is a necessary chore, but it can be made tolerable if you take the time to research and prepare yourself. 

Being acquainted with the ins and outs of used car shopping will make the whole process much less stressful and, most importantly, will almost always save you money.