Step #1 - Finding a Used Car
Search online used car classifieds and newspapers. This might seem obvious but don't just go straight to a used car dealership to start shopping. You can start with the local newspaper automotive classifieds section, but these are narrowly focused with limited market area. You want used car sites such as Cars.com, UsedCars.com, CarsDirect.com and Car.com which have thousands of listings that you can search. Many listings include the VIN numbers so you can run a Vehicle History Report.
Step #2 - Get a Vehicle History Report
Best Advice On This Entire Page For Buying a Used Car: DO NOT buy a used car without running a used car history search from CarFax to verify that there was no previous branding of the title, flooding of the car, odometer rollback, salvaged title or that it was reported stolen.
Step #3 - Get a used car loan
There are 2 basic types of used car loans. The first is when purchasing from a dealer. The second is when buying from a private party. Most banks will NOT lend money on a car that is more than 4 or 5 years old.
Step #4 - Do Your Research
Take time to do all of the research we recommend before starting the process.
Step #5 - Complete the sale
Once you and the seller agree on the price, discuss payment options. If you want any kind of traceability, get a bank draft, with the seller listed as payee. Cash is dangerous to carry around. With a bank draft, you have a record that you paid the seller money in case there are problems down the road. If the car turns out to be stolen, you can cancel the bank draft. But you can't cancel cash.
Step #6 - Protecting your used car with an extended warranty
It may be impossible to get a warranty for an older high mileage used car. In this case, it's even more important to have a mechanic check out that used car first. You don't want to inherit any surprise problems.
If you buy from a private seller, it's "As Is", you have no choice, so get an extended warranty. Have a good mechanic perform an inspection of the car. Why should you spend money on a mechanic? I'd rather spend a few dollars on a mechanic now, than $3000 on repairs later when the axle falls off. The mechanic is a great investment if it alerts you to a costly engine repair that even the seller was unaware of.
When buying a used car that is out of the manufactures warranty, you are at risk for costly repairs. That's why we recommend buying an extended warranty. If you buy a 3 or 4 year old used car, that's when the manufacturer's warranty expires and you will be on the hook for the repair costs. Unless you have an extended warranty, you are exposed to potentially large losses.