It’s true that used cars have gotten a lot pricier over the last few years. But before you start thinking about giving up cars altogether and walking everywhere on foot, hear us out.
Not every used car will cost you an arm and a leg. You can still find plenty of good deals on used cars out there—you just have to do your homework, know where to shop, understand what you’re looking for, and stick to your budget.
On top of all that, it’s even more important to ask the right questions these days—questions that give you the information you need to know if you’re getting a good deal, or if you should run for the hills.
So, no matter where you're buying a used car, make sure you get answers to these 13 questions.
Questions to Ask When Buying a Used Car
1. What is the car worth?
First things first: You need to find out how much the car you’re looking at is actually worth. After all, how will you know if you’re really getting a good deal on a used car if you don’t know the car’s value?
If the seller or dealer is asking for more than the car’s worth, you don’t have to walk away immediately. Instead, try negotiating with them for a more reasonable price. If they won’t budge, simply move on and look elsewhere—you won’t lose anything by trying!
2. How old is the car?
Because of depreciation, which is what happens when an asset (like a car) loses value over time, you need to know how old a car is before you buy it. Cars depreciate a lot—so much that most new cars lose 60% of their value in the first five years.1 So, if you bought a new car for $30,000 five years ago, it’s probably only worth about $12,000 now.
Make sure you do your homework and figure out how old the car is before you drive up to the dealership or meet with that seller from Craigslist. That way, you’ll know if the car’s value is still in for a steep decline, or if most of the damage is already done.
Plus, you can use the car’s age—and how that make and model loses value over time—to your advantage to negotiate a better price.
3. What’s the car’s mileage?
Mileage matters. The average person drives 13,476 miles each year, and that adds up to a lot of wear and tear on cars.2 Keep that in mind when you’re making your decision.
Some vehicles can pack on a crazy number of miles without skipping a beat (what’s up, Honda). Others? Not so much. Once you know how old the car is and how many miles are on it, you can figure out pretty quickly if the previous owner ran the car into the ground or only drove it on Sundays.
4. Is there a vehicle history report available?
A vehicle history report will give you some need-to-know info that’ll help you decide whether this car is for you—including accidents, open recalls, service history and the car’s previous owners. All of that can give you the upper hand when it comes to getting a better price too.
You can look up a car’s report online (it just takes a few minutes) or get one for free from most used-car dealers. You just need the vehicle identification number (VIN) or license plate number.
5. Are there any mechanical problems?
Before you sign the dotted line and hand over a wad of cash (and by the way, you should only pay cash for cars—no loans), you’ll want to make sure the car is free from mechanical problems. The last thing you want is to find out a week later that the engine is leaking fluid.
Dave's easiest money-saving tip: See if you're over paying for car insurance.
You could look under the hood yourself and check things out. But unless you’re a serious car nerd, it’s probably best to leave this to a professional. Ask the seller or dealer if you can have a mechanic perform a private inspection to make sure everything’s A-OK. If they say no, big-time red flags should go up in your head.
Take it from Randy G., a member of our Ramsey Baby Steps Community on Facebook: “Best money I spent and ‘lost’ was the $200 I paid for a mobile inspection of a used van I was going to buy. This guy drives out to the location, does the inspection, and then takes me over privately, giving me the full report of everything he can find wrong. Saved me from wasting $9,000 on a lemon Honda Odyssey, which are always highly ranked.”
6. Is there any damage to the exterior of the car?
We know looks aren’t everything, but they still count for something! Here are a few things to keep an eye out for:
- Bodywork, paint job and car frame: Look out for scratches, dents and rust on the surface of the car.
- Windshield, lights, rearview mirror and side mirrors: Are there cracks on the windshield? Do the headlights seem foggy or discolored? Are the rearview and side mirrors clear and working?
- Wheels and tires: Check each wheel for dents, and make sure they’re not bent. Take a look at the tires, too, to make sure they don’t need to be replaced before you buy the car.
While it’s more important to buy a car that’s in good shape under the hood, serious problems on the outside—like a rear bumper held together by duct tape or massive rust stains on the car door—can tell you a lot about how the owner treated the car.
For even more tips on what to keep your eyes peeled for when buying a car, check out our Ramsey Car Guide.
7. What does the interior of the car look like?
Now it’s time to climb in and look around. After all, you’ll spend a lot of time in there! Are there rips and tears from the family dog or coffee stains on the seats? Does it smell like a giant ash tray? Are there burger wrappers littering the floor? These are all things to think about and will tell you how well (or how little) the car has been taken care of.
8. Can you take the car for a test drive?
Once you get a good idea of what the car looks like, it’s time to see how it feels. The best way to do that is by taking a test-drive.
While you’re test-driving the car, pay close attention when you brake, change gears, and accelerate. If something feels—or sounds—off to you, it’s probably best to pass on that car and start looking in another direction. If possible, pick a route that includes some rough roads with hills, bumps and potholes so you can get a good idea of how the car handles those conditions.
9. Is the car under warranty?
Having a souped-up warranty plan isn’t as important as you may think, and buying an extended warranty from a used-car dealer is never a good idea. But you do at least want to know what you’re getting into when it comes to a car’s warranty status.
When a dealership or private seller is selling a vehicle without a warranty or “as is,” that means you’ll be on the hook for dealing with any flaws or defects that need fixing once you drive it off the lot.
Here’s some good news: Some used cars are still under the manufacturer’s warranty, which means the manufacturer or dealer is still on the hook for at least some of the repairs and replacement parts your car might need.
10. How would this car impact my car insurance premiums?
When you change cars, don’t forget about how it might impact your car insurance bill. If you’re turning in your hooptie for a much newer model, your insurance premiums will probably go up. That’s why it’s important to figure out exactly how much of a bump you’re in for.
The best way to get a true estimate is to get in touch with an independent car insurance agent, like one of our RamseyTrusted pros. They can shop tons of companies to help you find the best deal on insurance for your new-to-you wheels. Reach out to one of our trusted insurance agents today.
Questions to Ask When Buying a Used Car From a Private Seller
Passing on a dealership and buying from a private seller—like someone you find on Facebook Marketplace or Craigslist—is a great way to get a better deal on a used car. If that’s the route you choose to go down, you’ll need to ask the seller a few extra questions.
11. Why are they selling the car?
Sometimes the best thing you can do is ask the seller this question, then stand back and let them do the talking. This lets you scope things out, get to know the seller, and, obviously, understand the reason they’re selling the car.
Maybe their family just welcomed their first child and they need an SUV instead of that two-door coupe—their car loss is your gain! But if they break out in a sweat or quickly change the subject, little red flags should start waving around in your head. The owner might be trying to cut their losses with a car that’s been giving them headaches.
12. Do they have the title in hand?
Whether you’re buying from a private seller or a dealership, never drive off the lot or pay a single dime without having the car’s title in hand. No title, no deal!
Be sure to actually look at the title, too, before agreeing to buy the car. If it’s marked as a salvage title, that means the car was deemed a total loss and it’s illegal to drive. If the car has a rebuilt title, that means it was previously totaled but has since been repaired in some form or fashion. While there are some situations where it’s okay to buy a car with a salvage or rebuilt title, you do need to know what you’re getting into.
13. How long have they owned the car?
If someone’s been driving their car for a while without too many problems, it might be a sign that the car is pretty reliable. But if someone is trying to sell a car after owning it for only a year or less, they’re probably not happy with the car for some reason.
That’s not always the case, but you need to dig a little deeper to make sure the seller isn’t just trying to unload their clunker on you.
How to Pay for a Used Car
There’s one other important issue you’ll need to solve before buying a used car: how you’ll pay for it. Now, you could get a loan, but that’s definitely not the road you should go down. It’s a really bad idea.
Why? Because, when you finance a car, you wind up with big-time payments and a big-time interest rate. Don’t believe us? Let’s look at the numbers. The average monthly payment on a used car loan in the U.S. is $525, and the average interest rate with a credit score between 620–659 is 10.33%.3,4 Gross!
Instead of going down that road and chaining yourself to huge payments, buy a car you can actually afford with cash. Set aside a little bit every month in your budget, and before long, you’ll have enough socked away to write a check for your car. No payments. No interest. No stress!
As you go about saving the money for your next car, EveryDollar can be your best friend. It’s our free budgeting app that lets you set up a budget in minutes, and it’s a great way to stay organized as you work toward saving for a car or any other financial goal—no debt necessary.
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