The Basics of Buying a Used Car

Buying a brand-new car right off the lot is expensive. Given how rapidly a new car depreciates in value, it is largely seen as a poor investment. In contrast, buying a used car is a chance to make a great deal that saves you a lot of money. But you have to deal with the fact that you can never truly know how well a used car was maintained by the previous owner. 

Making sure you haven’t missed any critical steps when buying a used car can save you from expensive automotive headaches down the road.

We here at Car Digest now how hard it can be to buy a used car, especially if you haven’t done it before. To make the used car buying process as straightforward as possible, we’ve created this comprehensive guide to buying a used car. By following the steps we outline, you can acquire the car of your dreams in no time.

Important Tips for Buying a Used Car

Buying a used car can be a daunting job, but following a few important tips will reduce the stress.

• Find a used car that’s actually right for you. Don’t rush into anything.
• Be realistic about your budget. Don’t buy a car you can’t afford.
• Research the car thoroughly. Test-drive and inspect it before you make an offer.
• Be prepared to negotiate to get the best deal possible.
• For additional protection, consider getting a certified pre-owned car or purchasing an extended warranty.

1. How Much Car Can You Afford?

Your first priority should be to figure out how much you can afford to spend on a used car. Ideally, you should not even start looking for used cars online or heading to a dealership before creating a budget. Otherwise, you risk falling in love with the car of your dreams even though you can’t really afford it—a dangerous game to play. With a price ceiling in hand, you can avoid considering any cars that may inspire financial excess.

When buying a car, you have two main options: paying for it in full or taking out an auto loan from a bank or credit union. If you plan to pay for it outright, you need to know how much money you can afford to shell out all at once for the car.

If you plan to take out a car loan, you need to figure out how much you can afford as a down payment and how much you can afford in monthly payments. The interest rate and loan term will have a big impact on the size of your monthly car payment.

Compare your income to your expenses to figure out how much you can comfortably spend every month or how much you can spend to buy the car outright. Never put yourself in a difficult financial situation just to get a car.

Keep in mind that the price of the vehicle is not the only thing you have to pay for. You must also pay for insurance, annual registration fees, fuel, and maintenance and repairs. Make sure your budget takes such expenses into account. Then make sure you stick to your budget once you’re looking at cars.

2. Run a Vehicle History Report

When you are looking at a car, examine the vehicle’s history before you sign any paperwork or pay any money. Car dealerships, salespeople, and private sellers may very well be honest with you. But don’t just take their word for it regarding the quality of a used car, and don’t consider only how it looks from the outside.

Review the vehicle history report for any used car that interests you. Dealerships sometimes routinely offer you this report. When and if they don’t, obtain it from a site like CARFAX. The only information you need in order to find the report is the vehicle identification number (VIN).

If you’re buying from a dealer, he will probably be able to obtain the report for you if the report is not already on hand, since the dealer wants to earn your business. If you’re buying from a private seller, you will probably have to obtain the report yourself.

A vehicle history report tells you everything documented about the vehicle over the course of its history, including accidents, odometer discrepancies, and title status (clean, salvaged, lien, etc.). Knowing this background will give you peace of mind and help you make an informed decision about whether to buy the vehicle.

3. Consider Buying a Certified Pre-Owned Car

The prospect of buying a used car as is and with no warranty protection can be scary. But the thought of paying sky-high prices for a brand new car can be even scarier. Thankfully, there’s an option that may offer you the best of both worlds: buying a certified pre-owned (CPO) car.

A CPO car is car that has been owned before, so it is a type of used car. Certified vehicles are vehicles that have been sent back to the dealership or manufacturer and have been extensively inspected and refurbished in accordance with standards designed by the original automaker. Once the vehicle has passed this vetting process, it can be sold as a CPO.

What’s great about buying a CPO is that these cars are usually sold with comprehensive warranty coverage from the original manufacturer that you would not receive for a standard used car. At the same time, they are much cheaper to buy than a brand-new car (although they also tend to be more expensive than a comparable non-CPO used car). So with a CPO, you get the ideal combination a used car and a new car at the same time.

4. Test-Drive the Car

When you are buying a used car, it is very important to take a likely candidate for a test drive to see whether you like how the car functions and whether all the systems and gadgets of the car work as they are supposed to. 

The test drive is your chance to see whether this is really the car for you. Observe how it reacts in a wide range of conditions. Try to drive the car on a route that includes cornering, straight driving, hills, and maybe even some rough pavement.

During the test drive: 

• Make sure that the breaks are responsive and that the car decelerates and stops properly.
• Look around you to check visibility, and check your mirrors for any blinds spots.
• Turn the radio off and listen for any grinding, screeching, or vibrating that may indicate a problem with the car.
• Test all the lights to make sure they work properly.
• Cycle through the HVAC system and controls to make sure that the heat and the air conditioning work properly.

5. Get an Independent Mechanical Inspection

If everything looks good and you don’t feel or hear anything that was out of place during your test drive, you may be inclined to think that everything is good to go. Maybe. But not necessarily. To be safe, have an independent vehicle inspection done by a shop or your mechanic of choice.

Most service shops will do a used car inspection for around $50 to $100 or so. If you’re considering spending thousands or tens of thousands of dollars on a used car, this inspection is more than worth it. Here are some of the things that a mechanic will check out for you during the inspection:

• Brake pads, rotors, and calipers.
• Suspension components.
• The condition of the tires, including indications of suspension problems.
• The HVAC system.
• Headlights, brake lights, and turn signals.
• Fluid levels.
• Dents, dings, and scratches.

A good mechanic can find problems that you may have missed and can also estimate how much the repairs would cost. You can then take that assessment with you to the negotiating table.

6. Always Negotiate

If you’ve performed all of these steps and have decided on the perfect used car for you, it’s time to make a deal. Everyone in the used car market knows that negotiations are part of the process. So don’t hesitate to haggle for a better price.

Before you get to the negotiating table, make sure that you’ve done your homework on the car you have in mind. That could mean looking into everything before you get to the dealership, or being willing to walk away and spend some time coming up with a game plan. Either way, you want to be prepared so that you can get the best deal. Consult a source like the Kelley Blue Book to learn the market value of the vehicle and determine how much you’re willing to spend in order to leave with the keys. 

Don’t start with a ridiculously lowball offer. This tactic is frowned upon. If you try it, you won’t seem serious, and the seller will be much less interested in trying to do a deal with you. Be respectful and have a legitimate target price in mind. Then work with the seller to get there, not against him.

7. Get the Paperwork Right

Once you’ve agreed on a price, you’re nearly done. All that’s left is the dreaded paperwork. Try not to let the excitement of the purchase cloud your judgment. Pay attention to everything you are signing and make sure you are doing the paperwork correctly.

The three big-ticket items you will be dealing with are the contract, the insurance policy, and any additional costs. Make sure that the contract documents everything accurately, from the odometer reading to the final price.

Also make sure that you contact your insurance company and have coverage on the vehicle before you leave the dealership. If you get into an accident without having insurance, you could be liable for all associated costs. 

Finally, pay attention to any extra costs like warranties, car-wash packages, and service plans. Make sure that you are paying only for things that you truly want or need. 

Then go out and enjoy your new used car.

Conclusion and Recommendations

Buying a used car can be daunting, especially if it’s your first time doing so. You want something in good condition that you like and can afford. And you want to make sure that all the paperwork and other details are in order. If you follow our advice on how to buy a used car, you’ll have no problems when the time comes.

The used car market in Canada is huge. Dealerships and private sellers all over the country are selling used cars every day. So don’t rush into anything. You have plenty of options. If you are patient enough to take your time and really devote yourself to finding the perfect used car, you’ll be happier with the deal in the end.

Take it slow, make sure you can afford the car you buy, and get the best deal possible. We’ll be here with you every step of the way to make the process as stress-free as possible.

Frequently Asked Questions

Can you return a used car if it has problems?

Unlike some other countries that protect the purchaser of a defective vehicle, Canada has no lemon laws. But if you unknowingly buy a vehicle with problems, contact your local consumer affairs office to see what options you may have. The possibility of being in this situation is why it’s so important to get an independent inspection before you buy the car. Make sure you know exactly what you’re getting into.

Is mileage more important than age?

Problems with a vehicle can arise because of either mileage or age, and each situation is different. You could find a newer car with lots of miles but stellar maintenance records. Or you could find an older car with very few miles that has also been well-maintained—our own preference. You can also find examples of both newer and older cars with very poor maintenance histories.

The important thing is to do your research. If you make sure that the car has been maintained as the owner’s manual suggests and that the car really is in good condition, your only surprise will be what a great bargain you made.