Buying a used car with confidence

What should you consider when purchasing a used car?

There are many things to consider when purchasing a used car. The best way to get the most for your money is to assess your transportation needs, research your options, avoid potential problems, and know what you can afford before finalizing the deal.

To decide which car is best for you, think about how the vehicle will be used, who will be driving the car, what features are on the top of your list, and what safety features are the most important to you. Once you’ve narrowed down your top choices be sure to research the pros and cons for each, including the retail value, performance, and repair issues. Helpful resources include your local library, Consumer Reports magazine, and For information on a variety of car safety topics including crash tests and recalls visit the National Highway Traffic Safety Administration website or call 888-327-4236.

When test driving a car, allow enough time to thoroughly review the vehicle and have a mechanic provide an inspection. Some things to look for include: auto body parts lining up, paint matches, even tire wear, leaky hoses, worn belts, working warning lights and gauges, intact seat belts, smooth shifting, straight steering, and braking without pulling to the left or right.

There are potential problems associated with buying a used car. To reduce the risk of purchasing a car with problems, make sure the name on the title matches the name on the seller’s driver’s license, ask questions about the vehicles past and get a detailed vehicle history from the seller. Low-mileage used cars are often popular, but this does not guarantee that the car is in good shape. The National Highway Traffic Safety Administration estimates that consumers lose billions of dollars every year due to odometer fraud, so beware. In addition, you may want to avoid vehicles with "Damage Disclosure," "Salvage" and "Rebuilt" titles, since these vehicles have endured damage due to one or more incidents. Also, be aware of vehicles with Flood Damage titles: these are issued when a vehicle has been in a flood or experienced major water damage. There is always the risk of purchasing a car that was covered by the Lemon Law. This references a brand new vehicle that had extensive problems, which the auto manufacturer was required to buy back from the consumer.

Lastly, when deciding how much you can afford, it is recommended that your monthly auto loan should not exceed 20 percent of the money you have left “after” paying your monthly living expenses such as rent (or a mortgage), utilities, food, and credit cards. Do not forget to include these additional costs: fuel, auto insurance, license and registration, and property taxes. If you pursue an auto loan, plan on putting down at least 10 percent, and more is better to reduce your monthly payments. If you have credit problems, you may want to consult a consumer credit counselor or financial advisor to assess all of your options. Loans can be pursued at banks, credit unions and with auto dealers, however rates can vary so be sure to compare them before making your final selection. To attend a money management class from Michigan State University Extension, visit

Did you find this article useful?