How To Buy A Used Car

How To Buy A Used Car

One frequently touted tenant of the FI community is that you should never buy a new-to-you car if you can help it. Since most of us know that beyond safety and the ability to get you from point A to point B, cars are mostly status symbols on wheels that aren’t a great return on your investment.

Any new car that has bells and whistles or a fancy brand name are essentially mobile trophies that people use to brag about their status in life, whether or not it is rooted in reality. So, if you’re FI aligned and you’re simply trying to find a set of wheels that gets you where you need to go, (and safely so), read on.

Set A Budget, Then Research Thoroughly

As with anything, your budget should be a good starting point to inform all you do–and a good rule of thumb is that $7,000-$8,500 is about what you need for a good used car, and you’ll still have plenty of safety features and a good 100,000 miles before it needs to be put out to pasture. Of course, this may vary–but it's a good starting point.

If you have no idea where to even begin and aren’t already set on a specific make or model, check out and do your analysis in their Car Research section to learn more about what’s available. Here you can sort by MPG, user reviews, or even known issues with that model which wouldn’t be covered by a warranty.

As a person who personally drove a 2012 Ford Focus that was well known as the “problem child” of Ford for some time, take some time to thoroughly Google “X Make X Model Year known issues.”

My Ford Focus, before it was thankfully put out of its misery by my insurance company due to hail damage, had a serious transmission issue. I took it back to the dealership no less than six times, but the mechanics said there was nothing to be done.

Getting off the line, even with a light push of the gas pedal meant the whole car would shudder as it accelerated forward. Yes, you’ll want to avoid those well-known issues when you buy used!

Related: How To Get The Most Mileage Out Of Your Car

Go To A Dealership, But Buy From Craigslist

If you’ve successfully narrowed down your search to one or two cars that fit your needs for MPG, family size, or really, whatever cool factor you’re willing to pay for–you may want to take some time getting familiar with this car in person.

I’ve seen many personal finance bloggers recommend buying a car direct from the seller, as a middleman (used car dealer) will likely have a steep markup, and isn’t necessarily transparent about issues with the car either! You can run your own CarFax report before you buy using a VIN number, for about $39.99.

While you may want to buy directly from a seller, you can still spend some time visiting car dealerships to take a car for a test drive and spend some time with the type of car you’ll want to buy.

While a Craigslist seller will let you test drive, they probably don’t want you hanging out in their driveway for hours as you make a decision–so spend some time at a lot to get comfortable with the make and model.

Related: Longest Lasting Cars On The Road Today

Access, Aim, Pull The Trigger

So, you’ve researched which car to buy–but if you were to look under the hood you’d have no idea what you were seeing. Before you go to buy a car, cozy up to a friend who knows his or her way around a vehicle and bring them along.

While a CarFax report will tell you a lot about the car’s history, a wise friend or family member can tell you about the car’s future. When you look–when will the tires need replacing? How does the transmission look? Was the car cared for and maintained? A car enthusiast will know how to spot red flags or areas of neglect under the hood and their careful eye is well worth the price of lunch or a six pack of beer!

When your savvy friend has given you the thumbs up, you can see if you want to negotiate off of the listed price. Being armed with facts of upcoming replacements or identified issues will help you get money off of the asking price–but be prepared to walk if you’ve identified big issues that even a few dollars off the top won’t solve.

If you’ve ever bought a used car, we’d love to hear from you to share more tips with the ChooseFI community to shop smarter and save money along the way!

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How To Buy A Used Car

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5 thoughts on “How To Buy A Used Car”

  1. I bought my used car in 2008, it is a 2004 model. Still going strong. I paid about $16K for it and it had around 50,000 miles.

    Just do your research to make sure it is a reliable model and that you’re not overpaying for things you don’t need.

  2. I bought a used car about a month ago, after getting into an accident.

    I’d narrowed my search to base trim Japanese or Korean economy cars under 3 years old, and under $10,000 out the door, which basically left me with The Toyota yaris.

    I bought it from a car rental agency. The price was fair, and they had a $300 coupon for members of their rewards program.

    It’s mileage was about 45,000 for a 2016 model Toyota Yaris.

    The price was fair, lower than kbb suggested for private party sales of the same vehicle. after the coupon it was $8200, $9100 after tax, and it came with the remaining manufacturer’s power train warranty.

    If I had been more patient, i’m Sure I could have found a bigger, better deal, but i’m Content.

    I like the Yaris well enough, it’s plenty big enough for taking me to and from work, and feels well made, it has Bluetooth which is nice, I don’t think i’ll Ever get used to touch screens for head units though, my last car was made in 2002 and had a tape deck.

    the new car smell is gone. Being 2 years and being a rental knocked a little more than 50% off the new car price.

    So i’d Just like to add consider used rental cars

  3. I can hardly believe I’m reading this on an FI web site… 7000 bucks to buy a used car?! That almost defeats the purpose of buying used!

    Here what I’ve been doing for ~15 years now. Get a < $2,500 car instead. I personally prefer cars that are about 12 years old: for many people, 10 years is a mental limit when they buy (or sell) a used car, so cars of up to 10 years old tend to be relatively expensive. At 12 years, they have plenty of driving left in them, while still being modern enough feature-wise.

    If you're lucky (or just skilled at picking cars), it'll outlive the $7000 models suggested above. If repairs get too expensive, sell it and get a new cheap car. You can do that at least two times (for three cheap cars in total) before you get close to the $7000 budget mentioned above. This way, you'll hit those 100,000 miles easily. As an added bonus, if you want to teach yourself some DIY mechanic skills (fun and frugal!), cheap cars are great to start on, because if you break something while you learn, you at least don't break the bank.

    Worried about the safety of an older car? Take some defensive driving classes. Costs a fraction and is way more effective in the long run than buying a gas-guzzling tank of a car.

  4. Can someone write an article on the actual process of buying the car? E.g. transferring the title, transferring the money. All that jazz? I realize that this will vary from one location to another because of local laws, but just a general process?

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