Buying a Used Car Quick Facts
- Determine how much you can afford to spend on a used car. If you plan to buy the car with cash, consider how much money you can comfortably pay.
- Be sure to read the expert reviews. A vehicle’s features and design can change drastically from one year to the next. Read the car reviews from the past several years to ensure you get the style and features you want.
- If buying from an individual, Kelley Blue Book’s Private Seller Exchange manages the process for the buyer and seller, including a verification process to ensure the sellers are legitimate. Also, the service eliminates fraud and spam by handling the exchange of funds and the car title.
Buying a used car can rank right up there with getting a root canal. But it doesn’t have to — and the savings are real.
Because of depreciation, you can buy a 3-year-old vehicle for significantly less than the same model new. With the average transaction price of a new car coming in over $50,000, that gap matters. Modern cars are also better built than ever, so a vehicle that’s several years old still has plenty of driving life left.
Here are the steps for buying a used car.
1. Figure Out How Much You Can Afford
Before you browse online — and absolutely before you set foot in a dealership — settle on a number. If you’re paying cash, decide what you can comfortably part with. If you’re borrowing, run the figures through our monthly payment calculator.
Budget for the Cost of Ownership, Not Just the Price
- Taxes and fees. Tax, title, license, and assorted fees add up to roughly 10%, depending on where you live. A $30,000 car is really about $33,000 — and if you finance, you pay interest on that extra, too.
- Insurance. Get quotes on your top choices before you buy and compare prices.
- Fuel and registration. Ongoing, predictable, easy to forget.
- Maintenance and repairs. Set money aside for both routine service and occasional larger repairs. Used cars need attention sooner, and unlike a new or leased car, there’s no factory warranty or complimentary maintenance to back you up.
Then fit the monthly payment into everything else you’re already paying — rent or mortgage, child care, utilities, groceries, student loans. Set the budget and stick to it.
2. Find the Right Vehicle for You
Once you know your number, build a short list. Considering several model years widens the pool considerably, which is a good thing. Whether you want a small SUV, a full-size pickup, a midsize sedan, or a convertible, something out there fits.
How to Narrow It Down:
- Start with Kelley Blue Book’s Car Finder. Filter by category and by must-have features — remote start, heated seats, whatever your nonnegotiables are.
- Read the expert reviews. Look at several model years, since features and design shift from one to the next.
- Check the specs against your real life. Horsepower matters, but so does whether it fits in your garage.
- Shop for three years from now. Planning to grow your family? This is probably not the moment for a 2-seat sports car. Expecting a third child? Look at a 3-row SUV or minivan rather than a smaller sedan.
RELATED: Best Vehicles to Comfortably Fit Three Car Seats Across
3. Find Used Vehicle Prices
With a short list in hand, check the price. Look up the specific make and model — a Ford F-150, for example — and check the boxes for the options you want, like 4-wheel drive (4WD) or a crew cab. Options move the number.
Should you go Certified Pre-Owned? We generally recommend it. CPO vehicles undergo a rigorous dealer inspection, meet condition standards, and come with a warranty. Dealerships first service and detail them inside and out. The idea is that a CPO car performs almost like new.
- The trade-off: CPO costs more than a comparable noncertified used car.
- The upside: you get depreciation savings and a warranty — the best of both worlds.
- Buying from an individual? Unless factory warranty remains or you buy an aftermarket one, you’re buying “as-is.”
4. Check Your Vehicle’s Price
If you’re putting your current car toward the next one, find out what it’s worth. Enter the make, model, features, and condition — and be realistic about that last one, because a buyer will haggle over every scratch and dent.
Once you know both the trade-in and private party values, pick your route:
- Trade it in at the dealership for convenience.
- Sell it yourself for more money and more work.
- Take an Instant Cash Offer. Dealers come to you with real offers based on your car’s value — no negotiating, no lowball texts from strangers.
PRO TIP: Kelley Blue Book’s Private Seller Exchange is a secure peer-to-peer marketplace for buying and selling.
5. Line Up Your Financing
With a budget set and vehicles in mind, research your options. Most dealers offer financing, but always price it against a loan from your own bank or credit union.
Getting Preapproved Before You Shop:
- Gives you flexibility instead of tying you to one lot or dealer
- Sets a rate the dealer has to beat, not match
- Hands you the upper hand when deal-making starts
If the dealer beats your rate, great — take it.
TIP: Don’t discuss financing until you know the final cost, including all fees and taxes — more on that in negotiations.
RELATED: Buyer Beware: How to Avoid Dealer Markups in 2024
6. Contact Sellers
Found one you like in your budget? Call first and confirm it’s still available — true for dealers and private sellers alike. This is also your chance to ask the questions that matter.
Ask a Private Seller:
- Why are you selling it?
- Are there any known issues?
- Do you have the title in hand, and is it clean rather than salvage?
- Can I see the maintenance records?
- Do you still owe money on it, or is there a lien?
A dealership will typically cost a bit more than a private party — you’re paying for the process.
PRO TIP: Kelley Blue Book’s Private Seller Exchange manages the transaction for both parties, verifying sellers and screening out fraud and spam by checking IP addresses, emails, and phone numbers, and providing ID verification through Stripe.
RELATED: Car Title Guide: Everything You Need to Know
7. Get a Vehicle History Report
Always check a car’s history before you buy. A vehicle history report is generated using the vehicle identification number (VIN) and includes accident, maintenance, and title information.
- Get one from AutoCheck or Carfax.
- Dealerships usually provide them free — just ask.
- With a private seller, a report heads off problems and gives you negotiating leverage.
8. Examine and Test Drive the Car
This is the fun part. Try to stay objective anyway — you’re still making a deal, so keep the poker face on.
Before You Get In:
- Look for balding tires, torn seats, and fading paint, which can be signs of neglect or something deeper.
- Watch for a lit check engine light.
- Bring a mechanic or a friend who knows cars, and ask the seller in advance. A legitimate seller will encourage it. If they refuse, walk away.
Once You’re in the Seat:
- Are you comfortable, and does the seat adjust to a proper driving position? You’ll spend years and thousands of miles here.
- Any nasty blind spots — and if so, does it offer blind-spot monitoring?
- Bring the child seat to test the fit, and bring the fast-growing teenager to test the back row.
On the Road:
- Ignore the fancy features and the chatty salesperson. Focus on how the car feels.
- Note spongy brakes, a vibrating steering wheel, or pulling to one side — all can point to bigger problems.
- With a private seller in particular, be alert to anything that suggests deferred maintenance. Don’t let someone else’s problem become yours.
RELATED: Why Do My Brakes Feel Spongy?
When Safely Parked, Run the Tech Test Drive:
Does your phone pair easily? Enough USB ports? Play your own music if audio matters to you. Check the trunk and cabin storage — will it fit your lifestyle?
Ask the Dealership to Bring the Car to You.
A test drive at home shows you how it fits your driveway and handles your local roads, and you can load suitcases or gear to be sure.
Meeting a Private Seller? Use Common Sense.
- Pick a safe, busy third-party location — a police station, shopping center, or DMV lot
- Daytime only
- Bring someone with you
- Talk on the phone first and trust your gut
PRO TIP: Kelley Blue Book’s Private Seller Exchange verifies a seller’s identity before they can transact.
9. Negotiate a Price
You’ve done the homework, and you know the Kelley Blue Book value. Use it.
Haggle if you enjoy it, but stay respectful — nobody entertains a complete lowball, especially in a tight market for older used cars. If you hate negotiating, a dealer with set pricing may suit you better.
The Rules That Protect You:
- Don’t answer the budget question. A salesperson may ask what you hope to pay monthly — that’s the setup for “payment shopper” pricing. They can usually hit your monthly number, often by stretching the loan term out.
- Get the total price first, including all fees and taxes. Talk financing only after that.
- Come in preapproved. Your own lender’s offer means you can take or leave the dealer’s.
- Treat the trade-in as a separate transaction. Settle the purchase first. Bundling the two adds complexity and takes your eye off your budget. Shop your car around to other dealerships and use competing offers as leverage.
- Question every line item. “vehicle identification number (VIN) etching” isn’t necessary unless you asked for it. “Vehicle reconditioning” is something any used-car buyer already expects — and the sticker price reflects it. Say so.
10. Do the Paperwork
One step left. You’ll sign the sales contract and loan documents, or pay outright — possibly with a cashier’s check from your bank.
When Buying From a Private Seller, Make Sure You Have:
- A bill of sale. Find a form online, at your state’s DMV
- The title and registration verified as legitimate and correct.
- Your state’s requirements checked. Emissions and registration rules vary.
- Insurance added before you drive away.
PRO TIP: Kelley Blue Book’s Private Seller Exchange handles the title transfer and payment securely for both buyers and sellers.
Paperwork done, keys in hand. Enjoy it.
Editor’s Note: We have updated this article since its initial publication.
