Why should I consider buying used?
In the past few years, the used-car market has boomed. A record number of new cars are being sold thanks to today's great incentives. That means people buying new are trading in their not-so-old cars. Additionally, the growing lease market means many low-mileage cars are coming off lease.

Used-car buyers are taking advantage of the great prices and wide range of choices.

Because of the sheer number of late-model cars for sale, finding a dependable used car in excellent condition is not that difficult. You may even get to transfer the original factory warranty. Plus, you can get a higher class of car for considerably less than a bare-bones new one.

Buying used also means you avoid the expense of a brand-new car and the depreciation costs that occur as soon as you drive it off the lot.

As long as you research and thoroughly inspect the vehicle, you're likely to drive off with a good car at a great deal.

The following steps are designed to help guide you through the car-buying process, so you can make the best decision for your lifestyle.

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Know your spending limit
First, decide on a maximum price of what you can afford. Take a close look at your budget:

• How much can you afford to spend on a down payment?
• What kind of payment can you handle on a monthly basis?

Unless you plan on paying with cash, it's a good idea to get pre-approved for financing up front. Then you'll know what you can afford. Keep in mind, the interest rate on a used car will most likely be higher than a new-car loan. See How do I get the best deal? below to learn more about your financing options.

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Research your options
Consider your wants and lifestyle needs when determining what type of car you should look for.

Think about different factors, such as:

• How many passengers will be riding in the car with you?
• How much driving will you be doing?
• What kind of driving will you be doing?
• How important is gas mileage to you?

Next, start your search online. Look for used cars in your price range by reading car reviews, safety ratings and buying tips (see I want more resources below for helpful research links). Select three or four models you like before you start shopping.

If you're concerned about potentially buying someone else's problems and want the security of a warranty and manufacturer's inspection, find out about buying a certified pre-owned car. Be aware, it will cost you a little more than a traditional used car.

Once you know what to look for, you're ready to browse used-car classifieds. You happen to be in the right place—visit our Find Your Auto listings to start. With more than 2 million used vehicles listed for sale by private owners, dealers and manufacturers, you're more than likely to find what you want.

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Test-drive the seller
If you find a car that looks promising, call the seller. Many times all it takes is one call to know if the lead is a good one or not. Find out as much as you can about the car on the phone before you even ask to see it. You don't want to waste your time test-driving a car that's not up to your standards.

In general, you want to find out about the car's condition and history. Many buyers look for one-owner cars that have service records and repair receipts.

Here are some types of questions you can ask the seller:

• What's the condition of the car?
• How many miles does it have?
• How is it equipped?
• Are you its original owner?
• Has it ever been in an accident?
• Do you have service records?
• Why are you selling the car?

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Test-drive the car
If you like what you hear, set up an appointment to see the car. Go on a long test-drive and get a good idea of how well it handles in a variety of driving conditions. Think about your comfort level as well. Because you're test-driving a used car, you'll need to pay attention to all aspects of driving.

Once under way, there are a few things you can ask yourself:

• Does the transmission shift smoothly?
• If you're driving a manual, does the clutch fully engage before you take your foot off the pedal?
• How well do the brakes work?
• How is the alignment? Does the car drift to the left or right?
• Do you notice any shuddering, vibrating, rattles or squeaks?
• Perform some turning maneuvers on a side street. What is the turning radius like?
• Are there any blind spots?
• Drive over bumps and dips. How is the suspension?
• Now get on the highway. Does it have the acceleration you need?
• Does the cruise control work?
• While you're driving, think about comfort:
• Does the seat offer plenty of support?
• Do you have ample leg and headroom?
• Check out more Test-Drive Checkpoints in our Used Vehicle Inspection Guide.

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Inspect the car yourself

Before you go to the expense of having the car professionally inspected, look at it yourself and make sure it's worth the investment. Check out the exterior of the car:

• Do a thorough walk around and look for scratches, dings and rust.
• Make sure the doors, hood and trunk seal well and evenly align with the surface of the car.
• Look for differences in color on the panels and paint on the rubber seals around body openings. These are signs the car may have undergone body repair work or been repainted.
• Take a look at the tires:
  • See if tread wear is even on all four tires. If not, they may not have been rotated regularly.
  • Make sure the tires have enough tread on them to be safe. (This could be a negotiating point if the car will need new tires soon.)
  • Make sure there isn't a mix of brands or sizes on the same axle.
• Open the trunk:
  • Sniff for a mildew smell and look for signs of water leakage.
  • Check the condition of the spare tire. Make sure the jack and other tools are there.
• Look under the hood:
  • Check for signs of leaking fluids, battery corrosion, damaged wires or cracked hoses.
  • Check all the fluids—are they at the correct levels? The engine oil should be a smooth dark brown or black. Transmission fluid should be pinkish and smell like oil.
  • If the engine is completely cool, remove the radiator cap and look at the color of the coolant. If you see a layer of oily film or what appears to be rust, there could be a problem. (Don't confuse rust with orange coolant. Many newer vehicles use orange coolant instead of green coolant.)
• Look under the car with a flashlight:
  • Look for signs of oil leaks, coolant or rust.
  • Check out the condition of the different parts. If you see any pristine sections, then the car may have been repaired.
  • Inspect the condition of the tailpipe. It shouldn't be overly black and greasy or heavily rusted.
• Inspect the interior of the car:
• Try every function, from electric windows and locks to the sunroof to lights. Play the radio and tape or CD player if there is one.
• Study the upholstery for wear and tear or sagging.
• Check the car's history:
  • Purchase a vehicle history report. You can learn about title information and whether it has ever been salvaged, damaged or reported stolen. You'll need to provide the VIN (Vehicle Identification Number) to conduct the search, so ask the owner for it.
  • Ask to see the title and compare the VIN on the title to the number on the car to make sure they're the same. (The VIN is located on the dashboard under the windshield on the driver's side.)

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Take it to your mechanic
If you're sure you want to purchase this car, now's the time to call in the professional to inspect it. Of course, you should stipulate to the seller that the sale is contingent upon the inspection.

Some of the things an inspector should check out are:

• General mechanics
• Body work, including paint and frame
• Odometer fraud
• Proper trim options and features

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Decide how you'll sell your car
If you're planning on buying a used car from a dealership and already have a car, decide whether to sell your car yourself or trade it in. If you sell it yourself, you may make more money on the transaction. Read our Selling Tips before you make your decision.

If you're ready to sell your car, you can place an online ad on our website. You get to post photos, give a detailed description of your car and even edit your ad later.

If you're less concerned about making money and are ready to get rid of it, trade it in. Either way, it's a good idea to tell the salesperson that you're not sure what you're going to do with your current car yet. Focus on negotiating a fair price on the car you're buying before you address questions about trade-in, financing or down payments.

Before you sell your car or trade it in, find out what it's worth. Remember, what you get from trade-in will likely be a little lower.

Buying a used car doesn't have to be a stressful experience. As long as you've done your homework, you should feel confident about your purchase. Just remember these few tips.

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Arrange your financing first
If you're buying from a dealership, you may decide to go with dealer-arranged financing. But comparing outside loans first ensures you get the best deal and gives you room to negotiate.

Start with your bank or credit union, and then go online. There are plenty of websites that offer loan information. Our loan resources can pre-qualify you and provide the four best offers from different lenders on the spot.

A good tip to remember is to put as much cash down as possible. Starting with a lower principal balance will do more to lower your payments than any great rate.

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Negotiate based on the car's value
Before you talk price, know what the car is worth. Visit Carfax.com and get a good idea of what your starting price should be.

Once you're ready to bargain, remember these pointers:

• If the car needs work, show the seller your mechanic's receipt to prove how much it will cost you.
• Make sure your first offer is lower than your established spending limit.
• Once you name your offer, don't speak until the seller responds. It's amazing what the power of silence can do in negotiation.
• Be firm and don't budge unless you absolutely have to.
• If you're willing to move up from your first offer, do so in small increments.
• When you hit your maximum spending limit, tell the salesperson this is your final offer and you can't go any higher. Don't be afraid to walk away. Hopefully, you won't have to.
• Ask for a detailed receipt—a bill of sale—that states whether the vehicle is being sold with a warranty or "as is" along with the seller's contact info. Be sure you know what's required in your state to transfer title of the car.

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Keep things simple and separate
If you're buying from a dealership, keep the purchase price of the car separate from trade-in or financing. Settle on a fair price before you begin discussing the other. The salesperson can easily juggle the figures by offering a great deal on one end while recouping his loss on the other.

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