The hot car that was out of your price range just a few years ago may be much more affordable today--preowned. Here's how to buy a used car from a dealership or a private party.
Follow Steps 1 through 3 in How to Buy a New Car. Browse the Kelley Blue Book for used-car pricing (see Resources).
Search car ads from as many sources as possible, including dealer ads in newspapers and private ads in print and online classifieds to find out what's available in your area. Many dealers offer manufacturer-certified preowned cars; they generally charge more, but may offer a limited warranty.
Make a list of the features that you want, along with acceptable mileage limits and condition of the car you're willing to buy.
Set up appointments to see your top choices in person, and bring your most car-savvy friend. Take notes.
Ask for maintenance records and inspect cars closely. Fear rust. Web sites such as Cars.com and AutoWeb have used-car buyer's checklists that can be helpful (see Resources).
Ask the seller questions in order to rule out lemons (see How to Avoid Buying a Lemon). Check the car's history using a service such as Carfax, which can list a car's actual mileage, number of title changes and if it's been wrecked or salvaged (see Resources).
Test drive the car. Does it feel good? Take it on the freeway to check for alignment issues. Accelerate from zero to 60 mph (97 kph) to see how punchy it is. Brake sharply and see if the car pulls. Turn everything on at some point and have your friend walk around and see that they're all working: brake lights, headlights, tail lights, hazards, turn signals, dome light, wipers, fluid lights, radio, heater and AC/fan. Test all the doors, windows and the horn. Check that the tires have good tread since new tires can put you out hundreds of dollars (See How to Choose the Right Tires).
When you've found the car you want, take it to your mechanic and have it checked out for about $60.
When you've agreed upon a price with a dealer, you'll get the necessary forms, including a bill of sale and the car title (or pink slip). If you're financing, you won't get the actual title until the car is paid for. Some dealers handle all the paperwork, including tax.
When you've agreed upon a price from a private seller, you may not get a bill of sale, but you can find samples in car-buying books or online at Edmunds (see Resources). Or agree to meet the seller at the DMV to fill out sales forms there.
