Tips on the Purchase of Used Cars

Buying a car is a process that requires planning and thoughtful consideration, especially if you want to save money in the process. Since new cars depreciate so quickly, you can find some of the best deals by opting for a used car that's still in excellent condition. But buying a used car presents new risks that new car buyers don't have to worry about.

Know the Warranty Status

The biggest risk of buying a used car is the chance that it will need repair sooner than a new model would. Some used cars still have the manufacturer's warranty, which may last for five years or more from the original date of purchase, or until the car reaches a certain mileage, whichever comes first. Used car dealers may offer additional warranties or extensions that make buying a used car less risky. Compare warranty options and know what you are, and are not, covered for before you buy.

Do Your Homework

Before you look at cars in person, do some research to determine what you want and what you can afford. Your local newspaper's classifieds give a good indication of what particular models are actually selling for in your area. The "Kelley Blue Book" is a useful resource for determining the typical value of a used car based on age, mileage and overall condition. Once you identify a car you like, ask the dealer for a vehicle history report. If the dealer won't provide one, consider buying one yourself. This report will let you know if the car has been rebuilt or involved in a major accident, which should raise red flags about its reliability.

Take a Test Drive

Before you buy a used car it's always a good idea to take it for a test drive. Whether you're buying from a dealer or a private seller, you'll never know how a car handles and what it feels like to drive until you get behind the wheel. This is also a time to be attentive for any strange noises, warning lights or inconsistent behavior from the car. Even if the car is in excellent condition, you may feel uncomfortable if you're used to a much larger or smaller vehicle.

Make a Large Down Payment

If you don't have money saved up to make a large down payment, a used car might be your only option. But if you do have some savings, a large down payment can save you money on a used car. The more money you pay up front, the less you'll need to finance. This means that you'll pay interest on a lower principal amount, and less interest will compound to add to the amount you owe each month. Even if a large down payment means you need to finance for a longer period of time you might still save money. Be sure to compare not only the monthly payment amount, but also the total payoff amount when you look at the financing options your dealer offers.