The Ultimate Guide to Buying a Used Car
Posted Thursday, Feb 27, 2025
New cars keep getting pricier, with an average transaction price of $47,000, which indicates an annual increase of 1.6%. On the other hand, used cars offer a more affordable option, with an average price of about $23,000.
The variety of used cars available can be overwhelming. No need to worry, though — we're here to guide you through the buying process and help you make the best choice.
By keeping these essential tips in mind before heading to a dealership, you’ll be well-equipped to find the car that fits your needs and budget.
Here’s What You Should Keep in Mind When Shopping for a Used Car
Buying a used car is a great way to save money while also enjoying the comfort and ease of having your vehicle. Here’s a straightforward guide to help you through the process with confidence. Go bag the best deal on your next used car!
Determine Your Budget
A good rule of thumb for your used car budget is to keep your monthly payment around 10% of your take-home salary. Of course, this will depend on your other expenses, so feel free to adjust accordingly.
Paying in cash is the ideal option, but financing is more common. Research loan rates at your bank, online banks, or credit unions. Dealerships also offer financing, sometimes with special deals on certified pre-owned vehicles. Knowing your credit score gives you a better idea of the rates you may be eligible for.
Remember, the car payment is just one part of the equation. Don’t forget to include insurance, maintenance, and fuel costs in your budget. It's advisable to keep your total car expenses, including payments, insurance, and fuel, under 20% of your monthly income.
Identify Your Needs
The next step in buying a used car is to take your daily life and needs into consideration. If you have a family, a compact car might not cut it, and a huge SUV might be too much for solo trips.
Consider how far you drive each day, the weather you deal with, and how many passengers you'll typically have. Don’t forget to factor in your parking situation—whether you have space at home for a large vehicle or need something that fits into tight spots. If you need extra cargo space or towing power, add that to your list too.
Look for Reliable Models
Now it's time to explore your options online. Remember that not all used cars are created equal. Some models have better reliability records than others.
Use resources like Consumer Reports, Car Ratings, and online reviews to research the best-used cars. Look for cars with a reputation for longevity, reliability, and low maintenance costs.
Websites like U.S. News let you filter by body type and give you a clearer picture of what’s out there.
This helps you stay within your budget while checking off most (if not all) of the features you need. You'll get a sense of what model years and mileage fit your financial plan.
Make sure to research certified pre-owned (CPO) cars from dealerships. These vehicles have been thoroughly inspected and reconditioned to meet strict manufacturer standards. While they may cost a bit more than regular used cars, the added reassurance of their quality and condition can make them worth the extra investment.
Check Vehicle History Reports
Ask sellers for vehicle identification numbers (VINs) and request detailed history reports from trusted online sources.. These reports reveal essential details, such as past accidents and ownership history.
Most drivers in the U.S. put on about 15,000 miles annually, so take note of the car's mileage relative to its age. A higher mileage usually means a lower price, but it can also indicate more wear. Look closely at the maintenance and repair history for those higher-mileage vehicles.
Inspect and Test Drive a Used Car
Once you’ve narrowed it down to a couple of cars that fit your criteria, it’s time to schedule a test drive. Take this chance to inspect the car inside out. Ask about the features and ensure they match your expectations.
Check the tires for wear, and look for any dents or scratches on the body. Lift the hood and check the battery for signs of corrosion—this could indicate neglect. Inspect the interior for wear, especially the covering, gear shifter, and controls.
If you're dealing with a private seller, find out if they’re the original owner.
Here’s a checklist to keep in mind:
| Inspection | Test Drive |
| ● Exterior and interior damage | ● Acceleration and braking responsiveness |
| ● Tire condition | ● Engine noise and vibrations |
| ● Fluid leaks | ● Steering and alignment |
| ● Brake performance | ● Air conditioning and heating functionality |
| ● Rust or corrosion | ● Visibility and comfort |
| ● Working electronics |
If you’re not confident in assessing the vehicle, consider hiring a mechanic for a professional inspection.
Negotiate the Price
Most used car prices are negotiable, so don’t hesitate to negotiate with the seller. Use market pricing tools to determine a fair price range.
If the deal doesn’t meet your expectations, walk away. There’s always another opportunity, so take your time and stick to what’s important to you.
Secure Financing
Securing financing is often necessary unless you're paying with cash. Here's a breakdown of common options you can opt for:
- Bank Loans: Typically offer competitive rates, especially for good credit. The process may take longer and require more paperwork.
- Credit Unions: Offer lower rates and flexible terms. They focus on customer service and often offer more personalized loans.
- Online Lenders and Dealer Financing: Convenient, but often comes with varied rates.
Before you agree, compare interest rates, loan terms, and total costs to find the best used car.
Seal the Deal
Buying a car is a big deal, so it’s totally normal to have some questions or concerns. Take your time to go over everything — from the price to the paperwork. Don’t be afraid to ask for details or clarification on anything that’s unclear before you make it official.
Here’s a list of the paperwork you should review before you sign anything:
- Title transfer
- Bill of sale
- Odometer disclosure statement
- Warranty documentation (if applicable)
Ensure that all paperwork is legitimate and accurately reflects the agreed-upon terms.
Get Started with
Ready to hit the road? Whether you’ve already found your perfect ride or need some extra help, we are here for you. Reach out to Hyatt Cars of Lexington to buy a used car today!
