How to Buy a Used Car for First Time Buyers

The process of buying your first car is exciting and frightening. You're happy that you will have your own car but nervous about making a car payment. If you are like many first-time car buyers, you plan to purchase a used vehicle. It is essential that you choose carefully before buying a previously owned car. Research is important to ensure that you purchase a safe used car and get the best deal on it.

Instructions

1




Saving for a down payment is beneficial.

Set a budget. Never try to purchase a used car you can't afford. Your budget will help you determine how much of a down payment you must save. According to Edmunds, if you pay 20 percent down on your used car, you can avoid owing more than your car is worth. Start researching the types of cars you're interested in. Take into consideration the estimated gas mileage and safety ratings during your research.

2




Make sure the dealership hasn't sold lemons.

Check out dealerships. Most dealerships have websites, so you can research their inventory in the privacy of your home. Make a list of vehicles and the dealership where they are located. Search the Internet for any negative reviews on the dealership. Have they sold vehicles with major mechanical problems, also known as lemons? Are the vehicles overpriced? Finding the answers to these questions will prevent you from making a bad choice when purchasing your first car.

3




Always take cars out for a test drive.

Visit dealerships. Always test drive before deciding on a used car. Examine the vehicles for any flaws and ask to take a look under the hood. If you don't know much about cars, take a car-savvy friend or family member with you to the dealership. Ask the salesperson if the vehicle is a certified used vehicle and if it comes with a dealer or manufacturer warranty. Write down the Vehicle Identification Number (VIN) of all the cars you like. You can research vehicle history online with the VIN (see Resources).

4




Make the dealer an offer based on your research.

Select a car. Search Kelley Blue Book and National Automotive Dealers Association (NADA) to figure out exactly how much the vehicle is worth based on the features and mileage (see Resources). Return to the dealer and make an offer on the vehicle. Don't be afraid to suggest a dollar amount that is less than what the dealer is asking for. In addition, ask the salesperson about purchasing gap insurance. If your vehicle is totaled and you owe more than it's worth, gap insurance will pay for the balance.

5




Speak to a representative at your personal bank about financing.

Pay for your used car. According to the Federal Trade Commission (FTC), you have the option of paying for the vehicle in full or financing. Speak to the dealership's finance department about credit options. The finance department might suggest you find a cosigner if you have limited or no credit. If you have a bank or credit union that you prefer, secure a loan with them.