Buying a used car can be both exciting and overwhelming. It’s a big decision. In this guide, our team at American Auto Insurance breaks down what to look for when buying a used car. We’ll help you spot the good deals, avoid the lemons, and drive away happy with your purchase.
Understanding the Benefits and Risks of Buying a Used Car
The big draw of used cars is that they cost way less than new ones. With a preowned car, you get more bang for your buck and dodge that massive first-year drop in value. Plus, your insurance will usually be cheaper for a used vehicle, and you’ll find tons more options in your price range than when shopping new.
But buyer beware. Problems might lurk under that shiny paint job. The used car market is huge, with around 36.2 million vehicles sold in 2024 across the United States. With so many cars changing hands, doing your homework matters.
Conducting Essential Research
Before you start shopping, set your budget and stick to it like glue. Most buyers put down about 16% of the purchase price, so plan your budget with this figure in mind. Research which models tend to be reliable and which ones have frequent issues. Read reviews from actual owners, not just the fancy car sites. Some cars look great on paper but turn into money pits fast.
Use tools such as Kelley Blue Book to determine what you should pay, and consider whether to buy from a dealer or a private seller. Private sellers usually offer better prices but fewer guarantees, while buying a used car at a dealership typically costs more but might offer some protection. Remember that, on average, most cars rack up 10,000 to 12,000 miles yearly. So, a 5-year-old car with 80,000 miles on the clock is about right. But one that’s done only 25,000 miles might indicate that it’s either sat unused (which isn’t ideal) or someone’s hiding something.
Essential Questions To Ask Sellers
Always ask sellers why they’re selling. This simple question reveals a lot. Also, ask how many people owned the car before, as fewer owners usually mean it’s been better taken care of. Don’t tiptoe around asking about the vehicle’s accident history; ask directly and watch for any signs of hesitation. Don’t forget to ask about any current issues, too. A good seller mentions small problems upfront; a dishonest one often claims perfection.
Request service records, as they tell the real story of how the car has been treated, and make sure to check for any loans against the vehicle that could affect your ownership. Always insist on an independent inspection, as the seller’s reaction to this request can speak volumes. If a seller becomes evasive when questioned, take it as a warning sign to walk away.
Inspecting the Used Car Thoroughly
Start your inspection outside by checking for rust bubbles under the paint and feeling the edges of the body panels for rough tape lines from repaints. If different colors are visible between panels, it may indicate that the car has a crash history. Pay attention to the tires, too. A good tread depth is 6/32 to 8/32 of an inch.
Inside, check for musty odors that might signal water damage. Test all the controls, and look under the hood to check for fluid leaks and corroded terminals. Underneath, look for bent parts or fresh undercoating. Then, make sure to test all the lights, as small electrical issues can grow into big problems fast.
Conducting a Test-Drive
When conducting a test-drive, start the engine from cold and listen for any rattles that vanish after warming up, which could indicate a problem. Test the car on various roads, and observe how it handles bumps and if it pulls to one side. Make sure that the brakes work smooth and straight without any pulsing. Hit the highway, too, to ensure the car accelerates smoothly and cruises steadily.
Be mindful of transmission warning signs. Shifts should feel smooth without clunks or jerks. If you notice burning smells, it’s best to walk away. Also, watch for whining sounds during shifts, slipping gears on hills, red fluid leaks, or shuddering, as these may indicate future costly repairs. And never, ever ignore dashboard warning lights.
Professional Inspections and Assessments
Your eyes miss things a mechanic won’t, so it’s worth every penny to have a pro look at your vehicle before you buy. Good mechanics will check systems you can’t see or test properly, such as computers and sensors, and they’ll also look for hidden structural damage. Expect to pay $100 to $150 for this service. Some dealerships may charge more for a comprehensive four-hour inspection, but standard checks will be sufficient for most cars.
Don’t skip getting a vehicle history report. Reports from CARFAX and other similar services will show any history of accidents, flood damage, odometer rollbacks, and ownership changes. Although these additional checks involve spending money on a car you haven’t even bought yet, shelling out $150 now beats finding a $2,500 transmission problem later on.
Negotiation Strategies To Get the Best Price
Make sure you know the car’s market value before beginning negotiations. Let the seller name their price first, if possible. If not, start below market value but not excessively low — we suggest around 10% under. If you’ve got a mechanic’s report showing issues, use it to negotiate a better price. Always be willing to walk away if necessary.
Understanding Legalities: Warranties and Contracts
Always understand what you’re signing and read every line of the contract. Warranties differ greatly with used cars, with certified preowned vehicles typically offering the best coverage. Different warranty types cover different parts of the car. For example, a powertrain warranty covers just the engine and transmission, while a bumper-to-bumper warranty protects most components. Be cautious of as-is sales, as you shoulder all the risk. Some states even ban these types of sales above a certain price.
Postpurchase Checklist for Used Car Buyers
Once you’ve got the keys, it’s time to handle the paperwork. Make sure you transfer the title promptly — each state has different rules on this, so check local guidance to find out more. Also, make sure to sort out insurance right away. Most companies will give you a short grace period where your new ride gets the same coverage as your old one. But it’s still best to call your insurer the same day you buy.
Book a maintenance checkup soon after buying, even if you had a prepurchase inspection. It’s important to fix any small problems now before they get bigger. Familiarize yourself with all the car’s features, and ensure you keep every document related to your purchase safe in case you need them. If you plan to keep the car for a long time, consider extended warranty options, but always weigh up the cost against the likelihood of repairs for your specific model.
Protect Your Used Car Investment With American Auto Insurance
Successful used car buying involves research, inspection, and patience. Don’t rush the process. Take your time testing different vehicles, and ask tough questions.
Once you’ve found the right car, don’t forget to protect it with proper insurance. At American Auto Insurance, we specialize in policies for folks like you. We provide personalized coverage to fit your needs and budget, including SR-22 quotes and comprehensive coverage options that go beyond basic protection, including road assistance. Getting a quick quote takes minutes — just call 773-286-3500 today.
Friendly Car Dealer Showing the Contract to a Customer by Gustavo Fring is licensed with Pexels License
