How to Buy Your First Used Car

By Randy Stern
Last Updated 06/24/2015

Buying your first car could be one of the biggest steps in your life. It could also be a challenge with the lessons learned during the process. If you are a first-time car buyer, these tips will help ensure that it's an easy transaction when you sign the paperwork and drive off the lot.

Know What You Need

"Want" is one thing – we all want something. Think of a vehicle in terms of "need," meaning that you should focus on what you need a vehicle to do for you. This requires analyzing your daily driving habits, and including the people you take along for the ride. This may determine the kind of vehicle you would need. For example, a sedan might not have enough space for a family of five, while a three-row crossover or SUV would work better. Meanwhile, a commuter that drives over 25 miles each way might need an economical car with good fuel economy and space for everyone in his or her car pool.

Next Steps: Car Buying Guides, How to Buy Cars Online

Do Your Research

Each vehicle has a history. Sometimes, cars receive good marks from an independent consumer group. They may have impressive ratings in crash tests conducted by the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS). On the flip side, there could also be a history of recalls on the car you are considering. Know which vehicles you are interested in and find out more about what to affects these models since the time they first went on sale.

Next Steps: Understanding Crash Test Ratings, CARFAX Car Recall Check

Check the Condition of the Vehicle

A seller – whether it is a dealership or a private party – should allow you to take the car you are considering to your mechanic. Ideally, your mechanic is a trusted source that knows how you drive and can determine if the vehicle is not only sound, but also easy to work on for you. Before you do that, do a very comprehensive look at this vehicle. That means looking underneath for rust and corrosion, as well as on the outside. Interior, tire and rubber parts wear and must be inspected to ensure longevity. Otherwise, there is the potential to replace parts immediately after purchase. You could have the seller take care of the work prior to sale, if agreed upon.

Request the vehicle identification number (VIN) and pull a Vehicle History Report from CARFAX. A dealer can also provide you with a report, and if you're car shopping online you can get a free report with CARFAX Used Car Listings. Knowing the vehicle's history from an independent source will help provide some assurance during the buying process.

Next Steps: Used Car Buying Checklist, When to Get New Tires, CARFAX Vehicle History Reports

Take it for a Test Drive

How does it drive? Does it drive right for you? Going around the block might not be enough drive time to determine whether this vehicle is a perfect fit. Ask for an extended drive to allow for highway and freeway driving, along with some testing around town in stop-and-go traffic. Listen for unusual sounds, such as rattles, squeaking or anything that might not sound right to you. Make notes where those sounds come from to determine whether additional work would need to be done before buying.

Next Steps: How to Test Drive a Car

Negotiate the Deal

If everything checks out to your satisfaction, let the negotiation process begin! Part of your research would also include pricing for the vehicle you are interested in. having that information ready would determine how much you need to spend on this vehicle. Find out about financing and extended warranties from a dealership, but you should also check with your bank or credit union to see if you can get a better rate. If you are buying from a private seller, you'll need to pay cash or secure your own financing ahead of time.

Next Steps: Best Used Car Deals, Understanding Used Car Prices, Buying a Car with Bad Credit