The Ultimate Used Car Buying Guide

The Ultimate Used Car Buying Guide

Thinking about buying a used car? Smart move.

Here at instamotor, we think of used car shoppers as some of the wisest and most fiscally responsible consumers in the market. As new car prices continue to climb — with an average purchase price of $45,000, buying a used car is often the best way to get more (better options, nicer model) for your money vs. buying a brand new vehicle.

Whether you’re going to purchase from a dealer or a private owner, we’re here to help you do your homework and figure out what to look for throughout the car buying process.

I. Car Buying Basics

If this is your first time buying a car, it’s important to follow the steps we already outlined in our piece on how to buy your first car.

Set a budget and find the right car

To set a realistic budget we recommend using a combination of auto loan calculators and pre-qualifications to figure out what you can afford, and how big of a loan you will get approved for. Once you’ve set a budget, take a look at what types of cars fall within that range and target a few you are interested in.

Once you’ve figured out the financial piece and the car you want, it’s time to start your shopping process and hopefully check out the cars you're interested in. This is where you’ll assess and drive the car to see if it appears to be in good running order and if it’s right for you. You can also ask to have your own certified mechanic look it over—whether you’re buying it from a dealer or a private seller. If the dealer tells you that it’s been certified by their mechanics, ask to see the inspection reports and ensure that it’s in good running order. It pays to have a trusted third party look over the mechanics of the car and it will save you in the long run.

II. Factors to Consider

Your Commute and General Traffic

According to a study by Inrix in 2015, Americans spent an average of 50 hours in traffic. Do you live in a driving city such as LA or Dallas? With all the extra time spent driving, whether you’re looking for a good car to commute in or one that’s great for weekend getaways, good gas mileage is an important feature to consider. Also consider the importance of the interior comfort of the vehicle and additional features (such as bluetooth, satellite radio) that could help ease the pain of being stuck in traffic.

The Color Factor

When deciding what kind of car to buy it’s best to consider the terrain you’ll be driving in. Do you live somewhere warm and sunny? Perhaps you should think twice about getting a car with black exterior and interior.

Color is also a huge factor when it comes to resale value of your vehicle should you sell it down the line. White, silver or grey colors will have better resale value. These colors show fewer dings and scratches, and are generally popular with most demographics. To learn more about how color affects your car's resale value, read our article here.

Your Lifestyle + Passenger Factor

Besides your day to day commute, your lifestyle plays a big factor as well. Do you need to transport other family members around? Do you like to take your furry friend out for a hike on weekends? Take some time and evaluate who else might be spending a lot of time with you in your new ride and what their needs might be. That will help you narrow down your options.

Keep in mind there are a lot of aftermarket enhancements you can make as well, such as tinting your windows, roof racks for your kayaks and camping gear, or ramps for your doggy to get on and off the car. So even if the used car you’re eyeing doesn’t have all the bells and whistles, there are definitely ways to accommodate additional needs.

III. Shopping For A Used Car

Best Place to Buy, For You

When buying a car, you can start by searching based on a specific car you have in mind, or by searching for a dealership that works for your living and financial situation.

When buying a used car, you have 3 options:

1.) Online dealer
2.) Traditional dealer
3.) Private party

Online Dealers

We admit it, we're biased, but we believe buying a car online is a great option for today's car shopper.

If you’ve targeted a specific year, make and model, some areas may have a glut of them while others don’t. Buying from an online dealership means that you have access to cars that may not be local to you.

Additionally, online means you can bypass some of the things that people find uncomfortable about car buying. You can shop on your time, easily compare vehicles, you won't feel pressured to make a decision without the information you need, you won't need to haggle, and you get to skip the trip to the finance office.

We believe that auto loans can be a great way to build your credit, and our online platform offers us the ability to provide you with all the transparency and information you need to find both the right car, and the right deal for you.

Traditional Dealers

At a traditional birck and mortar dealership, you have the obvious advantage of being able to test drive your vehicle before you buy. However, most online retailers have money back guarantees in the event you are not satisfied with your purchase. Here at instamotor we offer a 7-day, or 250 mile return policy, and we also include a 30 day limited warranty, which is more robust than you'll typically get at a traditional dealer.

Another advantage of a traditional dealers can be Certified Pre-Owned cars. CPO vehicles usually cost a bit more, but might be worth it. What you're really paying extra for is the extended warranty.

Don't let the term CPO restrict your options. Most of the advantages of CPOs are provided by reputable online dealers. For example, all of our vehicles have clean titles and go through a 115 point inspection by a third party inspection service. If necessary we do any reconditioning before delivering your vehicle. We also offer extended warranties, should you feel the need to further protect your purhcase.

The last thing to consider is that if you buy from a traditional dealer and end up not being satisfied, it can be very hard to get out of your deal once you have signed your paperwork.

Private Seller

You may be able to get a better deal by purchasing a used car from a private seller, but financing can be more challenging, and you will have fewer protections should something go wrong.

Additionally, finding deals from private sellers takes some legwork. You’ll need to check out a few different sites to see what’s out there and what condition it is in. Take a look at Facebook Marketplace or eBay to see what may be in your area.

Research Before You Take the Next Steps

Before you decide to buy or even test drive, we reccomend you check some car research sites like Kelley Blue Book and Edmunds.com to see if the price that is advertised is realistic for what you are looking at purchasing. These sites will also give you a good idea of what sort of specific options you should look for in the car you are targeting. Do you need the safety package to get the upgraded airbags and safety systems? Should you look for a used car with the technology package in order to get the adaptive cruise control? These are important factors that can affect the price of a car. Armed with this information you know what you are getting into and what a reasonable price might be fore the car you want.

Becasue we value transparency we added a 3rd party Value Insights tool to each of our vehicle listings. This tool shows you the options on the car you are looking at, along with the value these features add to your car. This helps give you a better understanding of why each vehicle is priced the way it is. The Value Insights tool, also tells you if the car you are viewing is priced below market, by comparing it to similar vehicles in the same area.

IV. Checking The Used Car You Want to Buy

Get a Vehicle History Report

Gather as much information as possible about the car. Contact the dealership or the seller and see if you can get the VIN number of the specific car you are interested in. Have the dealer run the Carfax or AutoCheck, or do it yourself for a small fee to see what the history of the car has been.

If you’ve targeted a car that is being sold by a private seller on Facebook, Craigstlist or Ebay, reach out to the owner and find out the car’s history and ask for any available maintenance and service records with the VIN. If you're shopping on instamotor.com, vehicle history reports are provided for free--just click the AutoCheck icon on every vehicle listing.

From either Carfax or AutoCheck, you’ll get a Vehicle History Report. For help understanding what you are looking at (and looking for) check out our story, here.

Using these services you can tell if a car you are looking at has a “branded” title. That means that it’s been in some sort of accident or had some sort of problem earlier in its life. That includes the possibility that someone was texting or playing Pokemon Go while driving and rear-ended someone.

Avoid a Salvage/Branded Car

We suggest staying away from any car with a branded title because it can be a tremendous headache down the road. It is one of that main reasons why on Instamotor, we reject all branded/salvage title cars. Be extra thorough in your vehicle history research if you're buying on other private party sites such as Craigslist. If you are concerned about dealing with any kind of mechanical issues or service issues that may come up with your car, it might make sense to limit your choices to those at used car dealers. Generally dealers that sell only used cars are better than those that sell new and used cars as they will give your used car better attention since it is their main income stream.

Know, however, that it takes more than just getting a Vehicle History Report. You still need to have the car checked out physically. Especially if you're buying from a private seller, request to meet at a mechanic for the test drive to get the car checked out inspected. It pays to have a trusted, certified mechanic check out any used car you are looking to buy. A trained mechanic can see if the car has been repaired in some way that makes it less reliable or if there may be some expensive fixes coming down the road. For more on why it’s crucial to have your potential purchase checked out by a certified mechanic check out our story, here.

Know Where The Used Car Came From

If you’re purchasing a car from other areas of the country it’s important to take the climate into consideration. Cars from the Northeast can have rust issues because of salt and sand that’s applied to roads in the winter time. Cars from places like the southeast could see flooding from storms and some people may try to sell them for a deal. Learn how to spot flooded cars and avoid them. In California the biggest problems you’ll likely face in a used car will come from past accidents simply because people drive everywhere. The more time spent behind the wheel, the more likely that a car will have an accident on it’s Vehicle History Report.

The Freeway Test

Whether you test drive or you buy with the option to return, get a true feel of how the vehicle handles both on local neighborhood streets and on the freeway. Do you live in a big city? If so you're most likely going to spend lots of hours on the freeway with your new ride. How does it accelerate on the on ramp? How does it handle bumper to bumper traffic? It's important for you to make sure you are test driving similar to how you would normally drive in your day to day life.

For more tips on what to look for in a test drive, read our other post here.

V. How to Negotiate For a Used Car

Negotiating your used car price can be tricky business. Buying online means you can bypass this step. Remember car dealers can be astute negotiators and use known tricks of the trade to get you into a deal that benefits them. In general, car dealers are much better at selling cars than you are at buying them so as the buyer you are generally at a disadvantage. To turn the tables, separate every part of the negotiation process.

Many times a dealer will focus on the monthly price to get you to pay more than you want to. But you need to consider the total price, then financing, followed by extras like warranties and the value of your trade-in, if you have one. If you tackle it this way, you’ll be able to break the process down into bite-sized pieces and make it much more manageable. This why we provide an order summary so you can break down every part of your deal and find a monthly payment that works for you.

The other trick is to keep your fair market price in the back of your mind. Remember all that research you did over at Edmunds and KBB? Use it to your advantage. Start slightly below the fair market price and work your way up from there. Also—it pays to play different dealers off each other. Never name your price first, always make the salesperson work to start the negotiation off and always have a max price in mind. Stick to your guns, too. Remember each penny is coming out of your pocket.

Negotiating with a private party seller is usually far easier as you are generally dealing with someone who has only done this a few handful of times. If you know what you want to pay—and have an idea of how high you want to go start at the bottom and go up. Know what issues are present in the car you are looking to buy and use those to your advantage. Does it need new tires? Does it need some new brakes? Use those items you found in the service details, CarFax or in the notes from your mechanic, to your advantage and negotiate the price down.

Also be aware of why the seller is selling. People’s situations often change which is why they decide to sell a car—did they recently have a baby? Are they looking to upgrade to something else? Use this knowledge to your advantage when negotiating with a private seller. These same tips can be used when negotiating with someone online as well as in person.

Last but not least, you should also determine what the KBB trade-in value is for the vehicle, and use it as the bottom price in your negotiations. If you offer a price that is below market trade-in value, just know that you are low-balling the seller and the deal would most likely fall through. There would be no point for the owner to sell the car to you if they could save themselves the trouble and get the same amount at a dealership. So do your research and negotiate fairly.

VI. Financing Your Used Car

Once you’ve found some great cars in your area, and narrowed it down to the one you want, it’s time figure out how you want to finance that car.

Whether it’s through a private party loan, through traditional financing at a bigger bank or credit union, the process is relatively the same and pretty easy to do provided that you have all your paperwork in order. Check out local credit unions and smaller banks for really good interest rates on used cars.

Part of the process of getting financing will include running your credit. The better your credit the better your interest rate will be. If you’ve got some time to clean up your credit before you decide to go for a loan or purchase a car, it can be worth the savings. Here are some tips to get your credit in tip-top shape before you buy a used car. You can also take steps to protect your credit while shopping for a car loan, too. For more on those steps to take to prevent loan applications from dinging your credit, check out our story, here.

VII. Title Transfers

Once you’ve secured financing it’s time to get the title transferred and set up in your name. Ideally the seller will have no remaining loans on the car you are buying and the title can be transferred cleanly. If not, you might have to go to the bank or use a representative to close the deal. If you are financing the car many lenders will help you transfer the paperwork for you if you ask them. For the specific forms and details check out the local DMV website to ensure you have all the forms you need.

If you are buying from a dealer the title transfer can be easier, but you should be aware of what your rights are. Different states have different regulations. Be aware of the DMV fees that a dealer charges you and ensure that they are not overcharging you for the transaction. Basically, when in doubt, double check with the DMV.

Also be aware you have a limited time to get the transaction completed and the title of your used car transferred. You’ll need to have the seller sign the title (also known as the pink slip). For certain states, you’ll also need a copy of the SMOG certification. Also—particularly if you live in a busy area, make an appointment ahead of time to finalize the transaction at the DMV. Don’t expect to just be able to show up and get it done as you might have to wait a long time or be turned away.

VIII. Insurance for Your New Used Car

Once you’ve taken possession of the car you’ll also need to put it on your insurance (even before you have the title in your hand). Car insurance is required for you to take your new used car out on the road legally.

Car insurance requirements isn’t the same in every state. Each state has different liability minimums, and also different penalties in the lapse of coverage or driving without a license plate. Make sure you are familiar with the requirements and get sufficient coverage.

Do not drive your new used car without insurance. It can cost you more than you could imagine should something happen. According to Geico, driving without insurance could put the cost of a simple traffic violation up around $1,000.

Shopping for the best rates

According to CarInsurance.com, the average car insurance rate in California is $1,433. Your location, age, driving record, type of vehicle, how often you drive, the length of your daily commute, are all factors that can affect your insurance premium.

So remember to take a little time to do your research and find the best deal on your car insurance when you purchase your new or used car.

For more on the particulars of how to buy a car in each of the locations that Instamotor services, check back at Instamotor on the regular. We’ll provide you with everything you need to make your used car purchase easy, fast, and efficient and take the hassle out of the car buying experience.

Buying Tips
The Instamotor TeamThe Instamotor Team

Not your typical used car salesman. Our team is here to provide honest and transparent advice about car buying and selling.