The Ultimate Used Car Buying Guide

So, you’re in the market for a new-to-you (used) car? You have plenty of company. According to Automotive News reports, the United States set a used vehicle sales record in 2021, with 40.9 million vehicles sold.

Buying used can be a smart choice. You’ll probably spend less money on insurance, registration and taxes—not to mention on the sticker price of a used vehicle vs. a new one. However, before you buy, it’s important to do a little research. With a little planning and forethought, you’ll be able to find the used car that’s the perfect fit for you. Our Ultimate Used Car Buying Guide can help.

Ultimate Used Car Buying Guide

• Set a budget. While it’s true that you’ll probably pay less to buy a used car than you would for a brand new one, you still should review your budget so you know what you can afford. Important factors to consider are price, insurance and maintenance costs, as well as other car-related expenses.
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• Decide what you want. There are lots of used car choices out there. Make a list of the features that are most important to you, and decide which are your “must haves.”
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• Choose a seller type (private or dealership). Now that you have the list of things you want, it’s time to decide whether you’ll look at cars listed by private sellers or go to a dealer. There are pros and cons to both, but no matter where you go, be sure to comparison shop.
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• Do your homework. There are some basic questions you should ask a seller to make sure you’re buying the best possible used car, and you’re not getting stuck with a lemon:
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  • Why they’re selling and the asking price
  • Its condition and mileage
  • Its service records and a vehicle history report
  • Whether it was inspected recently and the inspection report
  • Whether it has been in an accident
  • Whether it has had any major repairs
  • How many owners it has had
  • Whether anything has been replaced or updated (new tires is a plus)
  • Whether it has more options than the basic model
  • If it has a clear title (no liens, not a salvage or damaged title)
  • Whether the title is in the seller’s name and is available

Check the History Before You Buy

With a Navy Federal auto loan, you have access to up to two free CARFAX® Vehicle History Reports™.^{Footnote 1} You also can search the National Insurance Crime Bureau’s database for free to see if the car has been reported as salvage or an unrecovered stolen vehicle. Once you’re satisfied, make sure to test drive any car you’re considering and have a mechanic you trust check it out before you buy.

Negotiate a Good Deal

Whether you’re buying from a private seller or dealer, it’s important to understand how to get a good price and how to negotiate, so you can get the best deal for your money. 

• Focus on selling price. If you’re buying from a dealer, make sure you focus on the total selling price, not what someone tells you your payments could be. That’s because a dealer probably can match any payment you name, but you’ll probably be extending how long you’ll pay for the car—at a higher interest rate—which means you’ll likely pay more over time.
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• Compare financing rates. Many car buyers get a preapproval from their bank or credit union, so they know ahead of time how much they can finance. If you’re shopping at a dealership and they offer financing, you can compare it to your preapproval by using our Car Loan Comparison Calculator to help you decide which deal is best.
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• Save money with a trade-in. Although a private seller probably won’t take a trade-in, dealers may give you credit toward the purchase of a car you’re buying from them by taking your current car as a trade-in. They may not give you as much money as you might get if you sold the car on your own, but the convenience of someone else finding buyers and selling it may be worth the difference to you. Research how much your car is worth ahead of time so you know if they’re offering you a fair price and get quotes from at least two different dealers.

Take Care of Some New-Car Housekeeping

Now that you’ve purchased your new-to-you vehicle, be sure you understand your next steps, including making sure you have insurance lined up, registering the vehicle with your state and reviewing the manual to understand its features.

Frequently Asked Questions

Are there other tools that can help me?

There are a variety of tools to help you in your car-buying journey besides those we’ve already mentioned. In addition, Consumer Reports publishes reliability ratings on popular vehicles, and there are a number of popular forums online. Keep in mind, though, that the forums are people like you expressing their opinions. They don’t offer expert advice.

Is there a best time to purchase a car?

You often can find a great deal during holiday sales. Looking to buy a car in July? Look for 4th of July promotions. And, near the end of the year when the next year’s models become available, you’re likely to find a good deal on the current year model. Keep in mind also that sales reps work on quotas/goals, and so the end of the month (and especially the end of a quarter) are great times to shop.

How can I know if the car I’m buying is sound?

It’s important to have any car you’re ready to buy inspected by a mechanic you choose. It may cost a little money, but it could save you hundreds if problems are found.