25 Things You Should Always Do Before Buying a Used Car

Know how to handle finances and inspections to avoid regrets.

By Andrew Lisa May 18, 2021

If you’re in the market for a new set of wheels, you can save big money buying used because, after all, the original owner or lessee already paid the bulk of the depreciation. If you don’t know how to buy a used car, however, you can leave money in the dealer’s cash register that should be in your bank account or, even worse, drive home with a lemon. Do your research, think before you sign and follow these tips for buying a used car.

Determine Your Budget

Step No. 1, when buying a used car, is the same as the starting point for buying a new car (or buying anything, for that matter) — find out what you can afford. That includes the cost of the car itself, title, taxes, fees, insurance and the principal and interest that constitute your monthly payments if you’re financing. Auto sites such as Edmunds offer budget calculators and other tools to walk you through the process.

Factor In Long-Term Costs

When setting your budget, it’s important to understand the long-term cost of ownership. The cost of insuring a car can vary considerably from one type of car, model or even color to the next. Fuel economy can make a difference of hundreds of dollars a year and thousands over a few years. Then there’s the likelihood of unscheduled repairs and their average annual cost. Sites such as RepairPal offer tools and calculators to help you gauge these costs for all major brands and most models.

Check Your Credit Score

If you’re planning on financing, the process for buying a used car continues the same way it does for buying one that’s brand spanking new, and that's checking your credit score. Your score — and the financial history it represents — is what lenders use to assess the risk associated with lending you money. Free credit reports from the three major bureaus still don’t come with scores, but you usually can get your score from your bank or credit card company. If not, a free scoring service such as Credit Karma will give you a good idea of what your lender will see when judging your creditworthiness.

Get Preapproved

When you’re ready to buy a used car, it’s always a good idea to get preapproved for financing before you walk into the dealership. That allows you to negotiate from a position of strength. Preapproval lets you compare any offers from the dealer’s financing division against that of your financial institution so you can walk away knowing you got the best deal no matter which option you choose. As with some of these other steps, this principle applies when you finance a used or new car.

Never Fall For the Patriot Act Scam

It’s always advantageous for the seller to know your true creditworthiness. Unless you’re financing through the dealership or one of its affiliate lenders, however, you are under no legal obligation to submit to a credit check by a dealer. Consumer watchdogs warn that some unscrupulous car dealers — of both new and used vehicles — will claim the Patriot Act requires them to run every buyer’s credit. There is no such law, and any dealer who tries to trick you into thinking otherwise is almost always a shady broker who is attempting to undercut the financing you have in hand.

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