Your Go-To Used Car Buying Guide

Set a Budget

This is the most critical step. If you’re paying cash, your budget is set. But if you’re taking out a loan, you should get preapproved for one. Remember to put 10% as down payment and not let the loan term be longer than three years. Also, your total monthly car expenses should be less than 20% of your take-home pay.

Choose Right

Figure out how you’ll use the car. Prioritize safety and cargo space for family, and choose other features if it’s for work.

Check Reliability and Costs

Choose a model for its dependability, not how fast it can go. Some cars are cheap to buy but burn a lot of cash later. So ensure you understand the total cost of ownership.

Find a Good Car

Search online on various sites for good used car listings. Check their inventory in detail. You could also visit used car lots, but don’t rush into buying anything.

Price the Cars

Ideally, find used cars online, and check comparative prices online. Assess price based on age, condition, mileage, and options.

Check History

Once you have a shortlist, run a vehicle history report. Ensure the car has a clean title, no salvage title, no accident history, and has received scheduled maintenance.

Speak to The Seller

Once you narrow down to about three cars, speak to the seller over the phone. Verify the information in the advertisement and then get more information about the vehicle.


If everything seems alright on the car, schedule a test-drive. Check everything and take your time with it. Schedule three test-drives back-to-back so that you can compare. Hire a mechanic to inspect the cars too.


Once you have your information and the mechanics report, you’ll know which car to buy. Use the information to negotiate a fair price for the car. Read up on negotiating with dealers. Ideally, insure it yourself and don’t include that price in the loan.

Drive Home

After agreeing on a price, ensure all the paperwork is in order, and the finances are complete. Ensure that the title is transferred to you too. Check up on state sales tax, documentation fee and registration fees. Then drive home and celebrate.