Back to Blog

Best Practices for Buying a Used Vehicle

Young Couple Buying Used Car

You have made the decision to purchase a used car, but you’re not sure where to begin. You know you want something that will last a long time and you know you don’t want to pay too much (which is why you’re buying second-hand). But how do you find that winning combination of long life expectancy and low cost in a vehicle you can enjoy driving? When it comes to used cars, there are three keys to finding a great deal: knowing your needs and limitations, eliminating damaged and unsafe vehicles, and finding affordable financing options.


BEFORE SHOPPING: Determine Your Needs and Limitations

Cost: Unless you purchase a “beater,” you may be paying on your used vehicle for up to five or six years, so now (before you make the purchase) is the time to determine what you can afford. Conventional wisdom suggests that you should not take on a payment that is greater than 20% of your net pay (the amount you take home after deductions). If you are paying off a lot of other debt, you may want to plan payments far below 20% of your net pay. The best way to determine how much you can afford is to subtract your regular monthly expenditures (mortgage/rent, credit card/loan debt, utilities, food, etc.) from your net pay. What do you have at the end of the month, after you have paid for everything else? That is the amount you can afford to pay each month.


Woman Sitting In Car Smiling

Find Your Next Car with Ease

Discover available vehicles at dealerships near you with our convenient car finder tool.

Find your vehicle


Preapproval: Once you know what you can afford, get preapproval from your financial institution for a vehicle loan within your means. With preapproval, you can shop with confidence, knowing that you can purchase a vehicle within your means.

Needs Assessment: Prevent yourself from purchasing a vehicle for emotional reasons (for example, because it’s really fast or has a sporty look that you like), by outlining what you are looking for before you head to the car lot. Write down a list of needs the vehicle must meet; the list could include entries like “must have enough room to haul trash,” or “must have a good back seat for the dog.” Bring the list with you, and don’t buy anything that does not meet your needs.

Research: If you know the make and model of the vehicle you are going to look at, research the value of the vehicle online beforehand, so you have a starting point for negotiations. That price will indicate the likely value of the vehicle. However, the dealership may charge more if they have made improvements or repairs that increase the vehicle’s value.


AT THE LOT: bypass damaged and unsafe vehicles by inspecting the following:

Frame: When a vehicle body goes out of alignment, it is usually the result of an event (i.e., an accident), which could indicate deeper problems in the vehicle’s structural integrity. Walk around the vehicle and note whether the gaps around the doors and along the hood and fender look even and normal. If you notice uneven lines or inconsistencies in the seam widths, the vehicle may have suffered trauma in the past.

Body: Rust is like a hungry parasite that feasts on vehicles when given the chance to survive. Used cars often have some, so you will want to check underneath the car and around the doors and edges, where rust often develops. Check the floorboards (you can even lift up the rug to get a good look) and look at the ground beneath the vehicle to see if it is leaking fluids. Small rust spots may not be worth worrying about but large spots or areas where the body has been rusted through can present a safety hazard.

Interior: Check the interior of the car for stains, rips, unpleasant aromas, and broken accessories (like a glove box that falls open with the slightest touch or a large rip in the back seat that is conveniently hidden in a crease). Sit in all seats of the vehicle to determine whether it will be comfortable for you and your passengers. Also check for discoloration and mineral deposits on the seats and other interior fabrics, which could indicate water damage and potential mold and/or engine issues.

Odometer: As with people, you can often tell the mileage of a vehicle by the nicks and bumps it has sustained along the way. Odometers can be manipulated, so be wary if the reading on the odometer doesn’t seem to match the wear and tear you can see in its body.

Steering Wheel: When you take the vehicle for a test drive, make sure the steering wheel is working correctly. The wheel should not vibrate, whether you are cruising along or stepping on it for speed. You also shouldn’t feel like the wheel is doing a sloppy job of steering, which could indicate damage to the vehicle’s steering components.

Brakes: The brakes on a used car should not vibrate, squeal, or scrape when you use them. Brakes can be costly to fix, so it’s wise not to purchase the vehicle unless the seller agrees to reduce the price by the estimated cost of brake repair.

Suspension: your suspension is a system that includes your tires, springs, shock absorbers, and the all of the connections that enable your wheels to move smoothly as a unit. Poor suspension can put you at risk because it opens up greater potential for the vehicle to roll over. Vibrations in the steering wheel can indicate problems with the front suspension, while vibrations in the driver’s seat could indicate a rear suspension issue. You can test the suspension by pushing the car down; if the car does not spring back easily, or if it bounces a lot, it could indicate that the suspension is in bad shape. You can also tell when a vehicle’s suspension is in trouble if the vehicle leans to one side.

Engine: Even if you’ve never spent much time looking at engines and feel intimidated by them, open the lid of the used car to check its condition. Are the hoses and belts in good working order or do they look cracked and old? Is the transmission fluid a healthy pinkish red or is it an unhealthy black?

Warnings: When you start the car, make sure there are no warnings on the dashboard. Note whether the gas and other gauges are in working order.

Accessories and Other Moving Parts: Do the speakers work? The CD player? How about the air conditioner or the heater? Are the mirrors in good working order? Do the doors open with ease or are they a little squeaky? Does the glove box latch correctly? Open doors and boxes, move seats, fiddle with mirrors and make sure that everything is in working order.


AFTER THE FIND: Find affordable Financing Options

Negotiations: If you’ve done your vehicle research, you have a fair idea of what the vehicle should cost. Now that you’ve inspected the vehicle, you also know what the vehicle’s issues are. Use the information you’ve collected to negotiate a price that is fair and affordable. Begin with a low offer and don’t let the dealer convince you to pay more than you can afford.

Financing: If you’ve been preapproved for a loan, go back to your financial institution to apply for the loan. If you haven’t been preapproved, work with the dealer or your financial lender to obtain a loan that you can afford. Don’t feel like you must rush your decision. Research your financing options and don’t be dazzled by offers of “0% financing” or “no down payment.” Do the math (or request help from you financial institution) before you accept any deal.


Worried about Your Credit?

This eBook can help you improve your score.

Download the eBook

About Christine Davidson

Christine Davidson is a former employee of VSECU. She has two children and lives with her husband in Northfield.
Reading on Phone

Stay informed

Stay up to date on financial tips, tricks, and tools that will build your financial literacy and help you live a more prosperous life.

Subscribe now!