How to Buy a Used Car from a Dealer

Used car

Let’s state up front that there’s no simple formula for success in buying a used car. Whether dealers call them “pre-owned” or “certified,” they are still and forever used, which means you need to uncover the car you want’s history and treatment as best you can.

We already covered some of the basics of dealing with dealers, car-selling scams, and some buying-and-selling tips. Today we’ll look at a plan of action for buying from a dealer and link you to some online resources and tips.

Let’s say you have decided to buy a two-year-old used Honda Accord, because: a) you can get a warranty from a dealer; b) you’ll save big on depreciation over a new car; c) there are several Honda dealers in your area with the model you want on their lots.

Here’s a plan of action:

1. Learn everything you can online and in conversations with knowledgeable car people about the model of your choice. Compare similar models and competing brands. Read reviews to enable yourself to choose the right car.

2. Get a feel for the local market for this car. Use the CarGurus DealFinder, Kelley Blue Book and NADA Guides to determine a ballpark price that you’re willing (and able) to pay. Print out specific deals and price quotes.

3. Shop for financing and get pre-approved before you go into any dealership. Affordability calculators are helpful.

4. Go shopping and visit several dealers. The best time to buy is usually the end of the month. The more inventory they have, the greater the pressure to sell to you.

5. Find out all you can about the car you want, including former owner history, service records, dealer inspection, VIN history, etc. Don’t even look at “as is” cars. Never reveal your bottom-line price to a salesman.

6. Do a thorough test drive and get a mechanic to inspect the car. Here is a good checklist of things to note. On the test drive, check braking, cornering and acceleration, ride, rattles and noises. Don’t overlook the transmission, one of the costliest elements in a car.

7. Negotiate only with a salesperson who makes you feel comfortable. Take your time, and don’t “lowball” for the car; know your limit and stick to it. Walk out if you have to. Don’t get distracted by special offers. You must control the process.

8. Unless a dealer can offer you a very special deal on financing, you are better off with a bank or credit union. Don’t let the Finance and Insurance person sell you on extras (extended warranties, alarms, insurance) you don’t need. Question any and all taxes and fees you don’t understand.

We may have made the process a little more adversarial here than it sometimes is. The most important thing you can do to set the tone in your favor is to demonstrate your knowledge of the car at hand, the market, and the financing process.

Have you bought a used car from a dealer recently? Please tell us about your experience.

—jgoods

Find Used Cars in Your Area at CarGurus

Used Honda Accord

4 Comments

  1. Good point. But there are still risky factors that you might need to consider. Mechanical problems are not easy to find out, even if you bring mechanics with you. It has to be tested out by running for at least 1 months, which is not easy to identify by first look. Another way of getting around this problem would be to ask the local dealer to offer limited warranty for any issues upon the vehicles and avoid any major repair costs.

  2. I bought a used Lexus from a Lexus dealer a little over a year ago. I had done a lot of research and knew about what the car I wanted should cost. The first few times I checked with dealer, they didn’t have what I wanted. Instead of settling, I waited and kept searching. It wasn’t long before the Lexus salesman called me to say he had a trade coming in that was exactly what I was looking for. It was… it was just priced about a thousand more than I wanted to pay.
    I began negotiating and stuck to my guns. The salesman actually said, “Most buyers here don’t negotiate like this. I’m not used to it.” (That says something about the typical Lexus buyer, which I am not!)
    I ended up getting the price down about $800. I paid $200 more than I wanted, but I got the exact vehicle I was looking for.
    For me, it was worth it.

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