Used Car Buying Mistakes

Car dealerships, website and newspaper advertisements, auctions—used cars are for sale everywhere. For many, buying a used car is the most practical, cost-efficient option (which can even come with a few perks!). However, you must educate yourself on common used car buying mistakes before you fall in love with a car and start working out a deal with the seller.

Common Used Car Buying Mistakes

Whether you're shopping with a dealership or private seller, take care to avoid some of these top used car buying mistakes.

Not Shopping Around

When it comes to buying a car, shopping around is crucial—especially when you're looking at used cars. This is because there are typically more avenues to purchase a used car compared to new cars, such as:

  • Dealerships.
  • Private sellers.
  • Auctions.

Such a variety opens doors that merely browsing a few car lots can't.

Have a basic enough idea of what you want (a sedan? pick-up truck? family-friendly minivan?) and start your shopping by browsing:

  • Car lots.
  • Websites.
  • For-sale ads in newspapers.

Compare the vehicles you find in your browsing, and make sure they meet your needs and fit your budget. Eventually narrow your search to two or three options before going further.

Failing to shop around could land you with a used car you thought you wanted, only to find a better deal after you've already made the purchase.

Forgoing a Test Drive

When buying a car from a dealership, test drives are pretty common; however, we don't always think about giving that used car a spin before we buy from a private seller.

So, it's simple: always take a test drive. How does the car feel? Do you hear any funny noises? Are you comfortable handling it? Observe everything during your test drive, and always trust your gut.

Forgetting to Research Vehicle History

Used cars have had at least one other owner; this means there's history you need to know about.

Some used car sellers will provide you with basic information such as maintenance reports (e.g., receipts for oil changes and other necessary upkeep), but perhaps the best way to learn about a vehicle's history is to order a vehicle history report (VHR).

Such reports provide information such as:

  • The number of past owners.
  • Odometer readings, including readings at the time of ownership change.
  • Accident history.
  • Whether there are any liens on the vehicle.
  • If the vehicle has ever been categorized a “lemon."

Learn more about VHRs, including how to get one, in our section Why Run a Vehicle History Report?

Avoiding a Mechanical Inspection

Sure, it costs extra money up front, but a mechanical inspection could save you thousands down the road.

Whenever possible, hire a trusted, reputable mechanic to inspect any used vehicle you're considering buying. Remember, just because the seller isn't aware of any mechanical problems doesn't mean there aren't any. Your mechanic could find a minor issue or two that are fairly inexpensive to repair (considering how badly you want the vehicle), or he could find major issues that render the car not worth it.

NOTE: If the seller isn't willing to let a mechanic inspect the vehicle, move on. This is a surefire red flag, as there should be nothing to hide.

Overlooking Vehicle Maintenance and Repair

Let's assume you've ordered a vehicle history report and hired a mechanic to inspect the car and everything is to your liking.

Now it's time to think about what it will cost you to maintain and repair the vehicle.

For example, is it an older-model vehicle that might need a lot of repairs in the near future? A luxury-model car with expensive or hard-to-find parts?

Or it is simply your basic, everyday used car that'll require normal, easy-to-access maintenance and repair?

Consider these factors carefully, because while the upfront cost of the car might be within your price range, future costs could go way out of your budget.

Skipping the Extended Warranty

This one's a little trickier, because some experts advise against spending the extra cash on service contracts—commonly misreferred to as extended warranties—citing they generally aren't necessary in addition to basic factory warranties. However, service contracts could pay off when it comes to used cars.

Again, it comes down to considering the cost of repairing the used car. Did you choose a make and model that's within your budget to repair, or did you go with a luxury vehicle that might cost a bit more than you're prepared to pay? Given your budget, sometimes it's actually more cost effective to pay for the extended service contract now and save yourself some cash on repairs later.

Accepting the First Auto Loan You're Offered

Unless you've saved up the cash to buy a used car outright, you'll likely need an auto loan.

While getting an auto loan through the dealership might seem like the best option (it's easy, one-stop shopping, after all), it's not always your best bet. Plus, you might be shopping with private sellers.

Before you head to the dealership, consider shopping around for auto loans from banks or credit unions. Sometimes, these financial institutions can offer you much better rates than can the dealerships. Keep in mind that you don't have to use these loans, but it's beneficial to have something to which you can compare what the dealership offers.

We explain in all in our section on Bank Auto Loans and Credit Union Car Loans.

NOTE: A bank auto loan is also an excellent alternative if you're buying from a private seller but can't afford to pay the full cost out of pocket.