Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florid...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Aug 30, 2021

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We can all agree not everyone can afford a brand new automobile.

The high price tags and the quick depreciation on new vehicles doesn’t make it easy either for many consumers.

That is why the option of used cars appeals to many buyers instead.

A sound financial strategy is not to buy a brand new vehicle. With a used one you can save a ton of money by avoiding the highest depreciation which is the 1st, 2nd, & 3rd years. 

Buying a used car at the lot. Note: If you are in the market for a used automobile try not to be in hurry. If you rush into buying a vehicle you may miss damaged parts, etc. When you take your time you are in control and not the dealer or seller.

Although it might seem like a sensible option of investing in a used automobile, buyers need to be cautious in their selections.

It’s because of the many unknowns in a used car as compared to buying a new one.

Purchasing a damaged one can become a costly problem for an unsuspecting buyer.

With these transparent pointers, you will avoid the pitfalls of buying a used automobile and hopefully get what you’re looking for.

The best strategy for buying a used vehicle is try not to be in a hurry. Plan ahead and take your time. The end result is much better. 

1. Choosing the Vehicle You Want

It can be overwhelming for a buyer deciding on a specific make or manufacturer when selecting your vehicle.

There are just too many aspects to consider such as:

  • Budget

The most vital thing to consider when buying is the budget.

After all, the vehicle you choose is subject to what you can afford.

You need to think about all the costs the vehicle will incur, e.g., tax, fuel and insurance, so that you don’t feel a pinch every month end.

Some websites allow you to key in whether you’re purchasing from a private seller or dealer.

You can enter your details to find out the average sales price of the car you want.

U.S. News & World Report has a very good used automobile list by rankings for most models and price. 

On average a vehicle will lose 60% of its total value over the first five years of its life.


  • Speed/Performance

You have to be sensible when finding a suitable engine.

People will argue, the faster the car, the less efficient it is.

So you might need to sacrifice the enjoyment of your new vehicle.

You may need to think in the lines of a little less performance.

It might save you money on fuel, insurance, and maintenance.Mercedes for sale by color.Note: From a financial perspective, try to buy a vehicle which is 3 to 4 years old. It has depreciated the most during this time and most vehicles can look new.

  • Usage

You need to consider this, what are you using it for?

Assuming you’re a city person and need it for commuting and running errands like shopping, a small city automobile could be a perfect choice.

The best time to buy a vehicle from a dealer is at the end of the month or year. 

You need to consider the size too if you live in an area with tight parking spaces.

If you live in the outskirts of the city and the weather conditions are mostly bad throughout the year, you might need to consider buying an SUV.

  • Bodystyle

It is a factor to consider because you need to think about what you’re going to use it for what you’ll carry.

Is it for the family?, will you be taking your kids to school with it?

Do you have a dog?

2015 Honda Civic Note: CarGurus has rated the 2013 to 2016 Honda Civic as one the best small compacts to buy. Me personally, if I was to buy a Civic, I would buy one which is in really good shape and 5 years old.

Well, you need to plan for such scenarios, and a van can be the right selection since it has extra space.

If you have babies or elderly relatives, an SUV can come in handy because of the extra cabin space and height making entry into it less hectic.

  • Fuel

It is another essential factor to consider.

If you’re a city person, it’s recommendable to avoid the additional cost of diesel and get a cheaper gas option, saving money on the purchase price.

2015 Toyota CamryNote: The IIHS claimed the Camry didn’t do so well in crash tests. The 2012 to 2017 Camry is on CarGurus list of top mid-sized sedans of used vehicles. I would be on the look out for a 2014 Camry. Most of the depreciation is gone and the 2014 performed better in crash tests.

A lot of people think that when they buy a diesel one, they get a better economy, and this is true to some extent.

However, to cover the extra cost of the vehicle, you’ll have to do lots of miles yearly.

Most of the time, perspective buyers do not take into the consideration the cost of owning a vehicle say, over the next three years.

Below I have provided a table with the cost of owning a vehicle by state.

The costs are for a new vehicle, but you can expect about 50% of the total amount or more for a used one.

I have included a search feature so you can type in your state to find the first time expense, one year cost, and three year cost. 

StateOne Time PurchaseAnnual CostTotal Cost for 3 YearsStateOne Time PurchaseAnnual CostTotal Cost for 3 Years
District of Columbia$2,039$3,841$13,561.06North Dakota$1,682$3,065$10,878.60
New Jersey$2,408$3,692$13,484.11Wyoming$1,357$3,167$10,859.14
Rhode Island$2,400$3,499$12,895.61Iowa$1,702$2,993$10,681.65
Nevada$2,746$3,316$12,695.68New York$1,392$3,079$10,627.63
Washington$3,000$3,204$12,612.92South Carolina$1,692$2,978$10,625.40
Louisiana$1,360$3,487$11,822.62South Dakota$1,347$2,986$10,303.56
Massachusetts$2,171$3,191$11,745.74New Mexico$1,011$2,971$9,923.26
West Virginia$1,687$3,218$11,340.77Virginia$1,352$2,750$9,602.97
Kansas$2,953$2,724$11,124.29North Carolina$1,058$2,797$9,447.94
Illinois$2,527$2,838$11,041.66New Hampshire$25$2,691$8,098.00
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2. Checks Before Buying

The following will give you a general overview of what to look out for:

  • Tires

You can kick the tires to check for defect and quality, but it’s better to go down on your knees and inspect them properly.

They need to have enough tread which is about 1.6 mm as a legal minimum.

2015 Chevy ImpalaNote: One of CarGuru’s pick for a family-size vehicle is the 2012 to 2016 Chevy Impala. For a Chevy model vehicle I would pick one which is 3 years old. Although new ones last a long time, I would play it safe with Chevy and buy one 3 years old compared to 5 years for Honda or Toyota.

If they are below that, know you will incur the cost of changing them soon.

  • Dents and Scratches

It’s crucial to inspect the car in broad daylight as this gives you the chance to see everything.

Check the body works and any signs of kerbing on the wheels.

If you see small dents and scratches, do not be put off as they can be fixed cheaply; instead, use them to negotiate.

  • Fluid Levels

You need to open the bonnet to check all the levels of oil, steering and brake fluid.

If you find them low, it might mean that the car maintenance is wanting.

  • Under the Oil Cap

If you see a white mayonnaise-like substance, the cause could be condensation.

Coolant mixing with oil is what usually creates it, and it’s a sign that the head gasket could have failed.2012 Jeep Wrangler

Note: CarGurus ranked the 2007 to 2017 Jeep Wrangler as the best used SUV to buy. If you are looking for the most depreciation in a Wrangler your best years to buy would be 2013 to 2015. I would keep my options open for a good deal on a 2012 Wrangler as the one illustrated above.

  • Electrics

You need to wind the windows up and down, test the air conditioning, switch on the radio, etc.

Although such faults can be quickly repaired, you need to negotiate if something is not working as it should.

  • Wear and Tear

You will find all secondhand automobiles with wear and tear, but it should be consistent with the mileage.

If you see heavy wear on the seats, steering wheel and pedals on a car with low miles, proceed with caution.

If you are going to finance a vehicle go through the bank first. Then shop. Never get financing through a dealership. 

3. History Check

It’s important to find out as much information as possible about the history of the car you intend to purchase.

You need to:

  • Read Owner Reviews

You will get a better sense of what flaws are and what it would be like to own it for a long term.

  • Check the Vehicle Identification Number (VIN)

You can get the VIN check from the federal government free of charge through the National Insurance Crime Bureau.

You can also run the history report through Autocheck or Carfax.

It will show you a report on the vehicle’s current state, if it has been in an accident, and got reported.

You will also learn whether the vehicle has a salvage title.

It means the insurance company has declared it a total loss.

It will also show the brand history and finally if the automobile’s odometer was rolled back.

2014 Ford F-150Note: Probably the best selling truck of all time is the Ford F-150 as illustrated above. CarGurus ranked the 2009 to 2014 Ford F-150 as the best used truck to buy. If I was in the market for a truck I would eye a 2014 F -150 with less than 50,000 miles.

4. Go for a Test Drive

If it doesn’t start properly, it could mean that you might need to change the battery or alternator.

It’s highly recommended that you take the automobile to both local and highway roads.

This way, you’ll get to see the performance of the vehicle in different environments.

Turn off the radio so that you can note unusual engine or break noises and whether all electronics in the car are working or not.

See how it feels when you take sharp turns and the condition of the brakes.

Taking longer drives makes you realize if the position is comfortable.

5. Have a Mechanic Perform an Inspection

It is essential to have a mechanic perform a check (for just $100) as it could save you a ton of money on repairs down the line.

6. How to Get the Best Deal

Do your research first before going to see the automobile.

How does it compare with others on the market? Also learn how much it’s worth.

When you know this, you need to set your budget and stick to it.

If you see the vehicle and think it’s overpriced for the condition that it’s in, don’t buy it if the seller won’t allow you to negotiate.

The seller might make a counteroffer if you walk away and realize that you’re not willing to pay more money.

Try to get some extras thrown in free, if you buy from a dealer, for example, ask for a full tank of fuel or service.

Don’t buy a car from a private owner in a public place. Go to their home to confirm if the address matches the logbook.


Even a used vehicle is a significant investment.

Therefore, you need to ensure that the choice you settle on will keep your vehicle on the road longer.

You don’t want to get stuck with a lemon, so take time to do thorough research and negotiate for the right price.

If you have more tips to ensure that you get a good deal on a car, we welcome you to share suggestions with us in the comment box below.





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