What to look for when buying a used car

What are the advantages and disadvantages of buying a used car?

One of the biggest perks of buying a used car is the lower sticker price compared to a brand-new car. And since used vehicles have a lower value, they typically cost less to insure against physical damage. On the other hand, a used car may have less features or older safety equipment. When deciding between a new or used car, you should consider your budget and what you need out of your next ride.

Learn more about buying a new versus used vehicle.

Do your homework when shopping for a used car

Before you head out to the dealership or start shopping for a car online, narrow your focus by writing down your necessities, like room for kids or cargo. Then make a list of nice-to-have features important to you, like heated seats or all-wheel drive. If safety is of utmost importance to you, check sites like Consumer Reports or IIHS-HLDI for safety ratings and go from there.

If you've got your heart set on a particular make and model, check your local dealerships for certified used cars, which are usually inspected and come with warranties. You could also consider buying a used car online. Check online car-buying services to see if they have the make and model you're looking for, some of which may offer warranties too. Private sellers can be a good option too; just make sure you have the vehicle inspected by a mechanic before buying.

What to check when buying a used car

Run the VIN to review the vehicle's history

One way to check a used car before buying it is to run its vehicle identification number (VIN) through a service like CARFAX or Kelley Blue Book. The VIN unlocks a vehicle history report that tells you the car's ownership history, whether it's been damaged in an accident or flood, or if it's been auctioned or stolen. Cars with multiple accidents or flood damage on their report might have ongoing problems despite having been repaired.

Checking the VIN with the National Highway Traffic Safety Administration will tell you whether the car has had a safety recall by the manufacturer. If a recall pops up, you'll want to ensure the issue has been taken care of before you purchase the car.

The VIN can also confirm other valuable details like the country of manufacture, the engine size, body style, and model series.

Research used car ratings and rankings

You should also research the make and model's general history. One of the benefits of buying a used car is having historical data at your fingertips that can help you understand how a vehicle has fared over time. Sites like Consumer Reports and US News and World Report have extensive rankings and reviews that give you an accurate picture of a used car's potential issues. Has it held its value over time? Has the year, make, and model of the car you're considering had specific issues that have cropped up continually? This information can let you know what to look out for when test driving a specific car.

Give the car a quick look for issues

Before buying a used car, give it a quick hands-on visual inspection. This is a big purchase, so don't rush yourself. Be ready to get your hands — and clothes — a little dirty. It could help in the long run. Here's what you should look for:

• Check the body for imperfections like gaps, dents, or discolored paint. These could be signs of reconstruction after an accident.
• Inspect the windows for chips and cracks, the tires for uneven wear, and the tailpipe for black grease.
• Get under the vehicle and check the wheel wells and underbody for rust, which could lead to future problems.
• Make sure the doors are working well and don't show signs of heavy use.
• Look under the hood for obvious signs of wear. First, make sure the engine doesn't appear to have fluid leaks dirtying the block. Do a quick oil check to see that it isn't murky, and also inspect transmission fluid levels. Feel any rubber hoses and belts to make sure they aren't cracking or super stiff.

Take the car on the road for a test drive

It's important to take a used car on a test drive — and to know what to look for before buying a used car. Here are some of the things you should check during your test drive:

• Listen for odd sounds: Any unusual noises coming from the engine, brakes, or transmission should be checked out by a mechanic. Rough transmission shifts are also a red flag.
• Check for water damage: If the interior has a musty smell, it could be a sign the car has flood damage or leaky windows.
• Test the A/C: Ensure the air conditioning cools quickly, and the heater warms you up.
• Test other electronics: The windows should go all the way up and down with no gaps. The headlights and brake lights should all work properly. Ensure the dashboard instruments light up when you start the car as well.

Paying attention to all of these details can help you make an informed decision on whether to buy the car or look for a better option.

Inspecting a used car with a trusted mechanic

Now, don't fall in love with the car just yet. It's a prudent next step to get an evaluation from a trusted mechanic. The cost of a pre-purchase car inspection can vary, but it can be well worth the expense. A mechanic can get deeper into the quality of the vehicle, covering everything from brake pad wear to trouble codes and spark plug deterioration to any number of issues you can't see from an on-the-lot inspection.

Have a plan before buying a used car

Do you plan to find potential cars online before inspecting them in person? Or will you visit dealers first and research the vehicles later? To make a practical used car purchase decision, have a plan for researching and assessing the vehicle before you finalize the deal.

Avoid falling in love with a car's looks and features before you've done your homework. A little bit of patience and perseverance can help ensure you love your car inside and out for years to come.

Used car market trends

A "hot" used car market is one where the demand for used cars is high, driving prices up. Demand for used cars can increase due to factors like an increase in buyers, a shortage of vehicles in general, price increases for new cars, and more.

Pay attention to used car price trends on sites such as CarGurus to help you decide when to buy (and the best time to sell your car). It's better to go in with a plan for your purchase ahead of time. Learn more about negotiating the best deal on a used car.

What to do after buying a used car

After you've bought your car, you'll need to add it to your car insurance policy. Most insurers offer a 7-to-30-day grace period where your new car is covered the same way as your old one. Typically, you just need the VIN, license plate number, and make and model in order to add a car to your insurance. Learn more about adding a car to an insurance policy.