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Better Than New: Buying a Great Used Car

Ah, the allure of that new car smell. But—hold on—isn’t the aroma of cold hard cash just as nice? By choosing to buy your next vehicle used, you could walk away with a high-quality car and a healthier bank account.

Not only are used cars handsomely discounted compared to their showroom brethren, but also the long-term reliability of vehicles in general has been on the rise for years, according to J.D. Power’s 2010 U.S. Vehicle Dependability Study. Using the power of the Internet to compare makes and models, find specific cars and check out their histories, you can increase your confidence of getting a used car that’s almost as good as new.

Ready to start shopping? Follow these tips to find a used car that fits your budget and your lifestyle.

Mind Your Money Matters
Step one is to determine how much you can afford. If you’ll be selling an old car, consider its cash value, any additional down payment you’ll make and what monthly payment fits comfortably in your budget. Get help with USAA’s auto loan calculator.

Websites such as,’s True Market Value tool, and USAA’s Car Buying Service can help you determine the selling price of your old vehicle and how much you can expect to pay for the used car you’re eyeing.

Getting a quote for auto insurance before buying can also help you understand the true cost to drive the car you’re considering. An added benefit of buying used is that costs for collision and comprehensive coverage are generally lower compared to new cars of the same style.

If you’ll be financing the purchase, look into auto loans through other banks that might offer lower interest rates than a car dealer might. Heading into your purchase with pre-approved financing also gives you a leg up in the negotiation process.

Find the Right Fit
When deciding on a make and model, prioritize the list of the features that are most important to you: styling, engine power, gas mileage, seating capacity, cargo space and so on. Be sure to base your list on your everyday realities such as highway commuting, not your daydream scenario like climbing mountain trails.

Be flexible. By remaining open to two to three models that would meet your needs, you’ll have an easier time finding a suitable vehicle at a good price. And for a real apples-to-apples comparison of different models, keep in mind that different vehicles in a given class might depreciate at different rates. In other words, give bonus points to a car that tends to hold its value longer, and thus costs you less in the long run. You can research depreciation ratings at

Forget driving all over town to wander around used car lots. Dozens of websites like and let you narrow down the universe of choices by searching classified ads and dealer inventories in your area.

Size Up the Seller
Who’s selling the car might give you some indication of the deal you’re getting.

Private Iindividuals
Newspaper classified ads and automotive websites can connect you to thousands of regular people looking to sell their cars for a fair price. This is typically the path to the best bargains, especially if you can find that holy grail of cars that was “only driven to church on Sundays.”

When buying from an individual, take extra precautions to protect yourself against theft and fraud. Arrange to test drive used vehicles only during the daytime in public places, and make sure not to carry large amounts of cash with you. Also, before finalizing the deal, double-check the vehicle information, especially the vehicle identification number, and ensure the title matches the seller’s name.

Sites like Craigslist and eBay are also good places to find cars, but be careful to avoid scams involving wire transfers or cashier’s checks. Unsuspecting buyers have been duped into paying for cars that are never delivered.

New Car Dealerships
Many big dealers also have used lots, where the cars for sale have often been professionally cleaned and inspected. For a guarantee of quality, Certified Pre-Owned cars put the dealer’s promise in writing that the vehicle is in trouble-free condition and is backed by a warranty. These services offer you more peace of mind, but come at a price.

Independent Used Car Lots
Like at any business, the salesman is looking to cover his overhead and make a profit, which could mean you’ll pay a premium for the car. But good deals can be found everywhere, so don’t overlook these lots just because they lack the sparkle of a big dealership.

Other Sources
Sometimes bargains pop up in less traditional outlets. For example, rental car companies often sell their retired fleet vehicles to the public. And auto dealers and other large employers sometimes sell vehicles that were once used as company cars. Repossession auctions held online or by local brokers could be another source. Investigate these cars the same way you would when buying from an individual or a dealership.

Do Your Due Diligence
When you view a used car in person, recheck the vital signs—model year, mileage, tire tread, etc.—to get an idea of how long the car will continue to be maintenance-free. Keep in mind that factory warranties are usually transferrable, so a late-model car could come with the protection of free repairs.

Test-drive any vehicle you’re seriously considering, turning on all the bells and whistles, to make sure it performs to your liking. Don’t limit your drive to neighborhood roads—hit the highway to properly test the car’s acceleration, handling, braking, and comfort. Consider taking two spins: one during the day, one at night.

Run a background check on the car using a service like, which can help you verify the ownership history, the mileage and whether the vehicle has had any major repairs. If the report reveals disturbing information that the seller didn’t disclose, walk away.

If possible, run the car by a trusted mechanic’s shop and have them perform an under-the-hood inspection with a trained eye. This should cost less than $100 and is likely to be money well spent.

Originally published on USAA