As exciting as shopping for your "new" used car can be, we know it can also get seriously overwhelming. Not only do you have to decide on the right car for your needs, you also have to make sure it fits into your budget. The process of buying a used car comes with the added stress of making sure the car is in tip-top shape and there’s nothing ugly lurking in the vehicle's history.

All it takes is some solid planning and patience. You don’t want to find yourself in the worst case scenario where you buy a used car only to get stuck with repair bills that cost more than the car itself. Follow our easy steps, and you'll be on your way. 

Why Buying Used Is Smart

new vs used hyundai santa fe exterior and interior
Sometimes used (2016) and new (2018) don't seem all that different except for the price.

Don’t worry, we’re not here to scare you out of buying a used car. In fact, if you’re in the market for a used car, you’re in good company! According to Cox Auto Inc, there were 39 million used vehicles sold in 2017. This is two and a half times the number of new cars sold in the same year. Buying a used car comes with many financial advantages and more and more people are passing up new cars for used ones. Why are so many more people buying used? Less depreciation, lower insurance costs and reduced price tags (average new vehicle cost is $35,152 vs. used at $22,900) all make a very strong case for taking this route.

Once you’ve decided that a used car will be in your future, it’s time to get the process rolling. If you’re feeling a little intimidated, you’re not alone. First of all, used car salespeople aren’t exactly known for putting you (the customer) first. There are also many different ways to buy a used car which can be confusing. We want to make sure you are equipped with all the tools you need to not only go into the process with confidence but also walk out with a great deal.

To help you navigate the used car market, we broke down the buying process into 7 simple steps:

  1. Decide on a Budget 
  2. Research Cars
  3. Get Financing
  4. Locate Cars Near You
  5. Get a Vehicle History Report
  6. See it in Person
  7. Close the Deal 

Step 1: Decide On a Budget (and Stick With It)

Car Payment Budgeting

The best place to start when buying a used car is to decide how much you’re willing to pay. If you are taking out a loan for the car, you’ll want to plan for a down payment of at least 10% and also budget for the monthly payments. Most financial experts recommend the 20% rule when budgeting for a car. This means no more than 20% of your take-home pay should go towards owning the car. This includes the monthly car payment along with gas, insurance and maintenance costs.

Once you calculate how much car you can afford, you’ll be able to use that amount in your search and filter by the price when looking up cars online. It’s important to stick to your number and not be tempted to upgrade to a car you’ll be struggling to pay for in the future (you'll thank us later).

Step 2: Research Cars

Toyota Review

This should be the fun part. Just like buying a new car, it’s important to look at reviews and overviews of multiple brands, models, and body styles. Watching review videos will give you a good 360 degree, inside and out impression as well.

Models and Features

Maybe you’re loyal to Ford but need help deciding between the F150 or F250. Or are you looking for a small SUV and are open to exploring many different brands? Reading reviews will let you compare, narrow your search and make a short list of 3-4 cars to consider. Make sure to prioritize features important to you. For example, we rate cars based on driving experience, technology, styling, comfort, safety, storage, fuel economy, and audio.


Take a look at what the price ranges look like for the cars you're interested in and make notes to reference when you're ready to buy. This will come in handy for step 7. Once you have your list, you’ll be ready to find financing options and start looking for available cars near you.

Step 3: Get Financing

used car lot with interest rate

Unless you’re paying cash for your used car, you will need to determine your financing options. It may come as a surprise that we recommend this step before finding cars to buy. However, it’s important to determine what your interest rate and monthly payments will be so you know which cars you’ll be able to afford. Otherwise, you may get your heart set on a car that will not work out for you and waste your time and energy.

If you have good credit, you’ll be able to apply for a loan and get pre-approved at most banks and credit unions. If your credit score has taken a hit recently, you can still apply for a loan through other lending companies. For example, our network of lenders specializes in providing loans for those with distressed credit.

Apply for a Used Car Loan

Step 4: Locate Available Cars Near You

Used car listings

Now that you’ve narrowed down your options and have financing, you’re ready to find available cars in your area. Unlike new cars, used cars can be sold in several different ways. You’ll have the option to buy from

  • A dealership
  • An independent used car lot
  • A chain used car lot 
  • A private seller

There are pros and cons to each of these. Buying from a dealership gives you more peace of mind. There, you’ll have the option to purchase a certified pre-owned car which often comes with a warranty. Plus, all the paperwork will be handled by the salesperson. The downside is you’ll likely pay a higher price than if you buy from a used car lot or a private seller. In fact, if you go to a dealership, you may not see much of a difference in price between some used cars and brand new cars. 

If you want to see all available cars in one place before going in person, your best bet is to start your search online. You’ll be able to view used car listings in your area, filter by distance, miles, year or price and request more info on the car. You'll have access to all this information before ever stepping foot in a dealership or used car lot.

Find Used Car Deals Near You

Step 5: Get a Vehicle History Report

vehicle history report sample

When you think you’ve found “the one”, you’ll want to obtain a vehicle history report using the car’s VIN number. This provides you with valuable information that can either reinforce or make you rethink the decision to buy. A vehicle history report will provide you with a car's:

  • Registration and inspection information
  • Sales information
  • Service history
  • Title information
  • Accidents and other damage 
  • Recalls

When you look at our used car listings, you’ll see the option to request a free vehicle history report for many of the available cars. We highly recommend that you don't skip this step. It will save you time and hassle later. 

Step 6: See It In Person

woman looking through car window with for sale sign
Buying sight unseen is a bad idea, especially when it's used. Check things out.

Once you’ve looked up used cars online and narrowed down your options, you’ll need to see the car in person. We'd equate this to meeting up with someone you met on an online dating site for the first time. You're anxious to see them but also reasonably cautious.

Take it for a Spin

You'll want to take the car for a test drive and know what to look out for. When you test drive a car, focus on these features:

  • Seat comfort
  • Visibility
  • Acceleration
  • Braking
  • Infotainment and navigation
  • Roominess in the cabin
  • Cargo space

Know the Warning Signs

It's important to watch out for warning signs like rust or dents, chips in the windshield and worn tires. It's a good idea to make a checklist of what to look for and bring it with you so nothing slips through the cracks. If you're not certain about the car's condition after the test drive, you should get it inspected by a professional mechanic.

Step 7: Close the Deal

couple shaking hands with car seller
You can have peace of mind because you did your car shopping homework.

You made it to the last step! You've found a car that fits your needs and budget, took it for a test drive and verified that it's in good condition. Now it's time to seal the deal (and get a good deal too).

Land on a Price

Very few people actually enjoy the negotiating process, so you're not alone. The good news is that you have come prepared. Pull out the pricing notes you took in your research phase and stick to the price you're willing to pay. If the seller knows you've done your research, you'll walk out with a better deal. Under no circumstances should you share the price you're willing to pay right away. Start with a lower number and expect the seller to counter. It's important to not let emotions get the best of you. There are many other great used cars out there and if you don't like the final price offered or how the seller treats you, it's a good time to walk away.

Complete the Paperwork

If things go your way and you agree on a good price, you'll then have to complete the paperwork. This part is perhaps the only thing even less enjoyable than negotiating, but you're almost there! Buying from a dealership makes this step easier. You'll be directed to F&I (Finance and Insurance) where you'll sign off on the contract and learn about additional items like a warranty plan. Certified pre-owned cars will often come with a warranty already, but an extended warranty is a good way to get peace of mind for a non-certified car.

If you're buying from a private seller, you'll need to get the title and registration transferred. Autobytel outlines the steps to make sure the transfer is completed correctly. Unfortunately, the process involves the DMV. You'll need to show the DMV:

  • A bill of sale with the purchase price
  • Proof the title has been signed over
  • The vehicle Identification number
  • Current odometer reading

Having found "the one" perfect used car at a great price, you'll be ready to drive off into the sunset without any buyer's remorse. Here's a snapshot of the steps for you to reference as you begin the search. 

Used car infographic

Find Your Used Car Today