Used Car Buying Guide

1) Set Your Budget

How much should you spend on a car? Consider this before you start shopping—before you find yourself wedded to a car that’s a bit outside your budget.

While it’s entirely up to you how much you want to spend, there are a few rules of thumb you may want to use as guidelines. We recommend you limit your vehicle budget to between 10% and 50% of your annual income.

For many, 30% is a prudent number. It falls right in the middle of the range, giving you the freedom to buy a quality car and have an ample budget for fuel, insurance, and routine maintenance.

2) Choose the Right Car

In many respects, shopping for a used car is more challenging than shopping new. The reason? There are many more factors to consider—and many more options on the market!

If you’re picky, that last factor could be a good problem to have. You can shop pre-owned cars from many brands at one dealership since most dealers sell used cars from a variety of automakers (whatever was traded in by other shoppers).

Some factors you’ll want to consider include:

• Body style and market segment
• Condition
• Mileage
• Model year
• Features and specs

You may want to consider certified pre-owned (CPO) vehicles in addition to traditional used cars. These vehicles offer plenty of added perks, including extended warranty coverage.

3) Research, Test Drive, and Inspect

A used car is a major investment. Before you buy, you’ll want to do your research and confirm the car suits your needs—that it isn’t just an impulse buy.

With a used car, there are many elements to research. You’ll want to check the CARFAX® Vehicle History Report™—or a similar history report from another well-respected company—to confirm the car is in great condition.

Take some time to research the car itself as well. Learn more about the model year and the features available in the car. You can dive into reliability and safety research and see how the model has held up over the years.

Perhaps most important is the test drive. This is your opportunity for a little one-on-one time with the vehicle. Here are some things you’ll want to inspect when you get behind the wheel:

• Make sure the seat, mirrors, and steering wheel can be adjusted to your liking
• Check the back-seat space and cargo space
• See how the car drives in different environments (highways, stop-and-go traffic, etc.)