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Edited by John Leach
Last Updated August 8, 2022
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New vehicles aren’t always the best.
They’re more expensive than used cars, and you can only buy a new car through a car dealer. Plus, as a new car owner, you end up eating the cost of depreciation the second you hit the pavement.
As more and more people seek affordable car options, the used car market is picking up. People are looking for an affordable option to upgrade their rides, and there are more cars on the market, with car rental companies like Hertz going out of business and liquidating their lots.
But car buyers need to look out for more than mileage and a great price tag. There are two important considerations when buying a used car. The first is the reliability of the car brand and the model in question (including the year). Next, it’s important to understand the history of the vehicle in question before making any final decisions.
Whether you’re buying new or used, make sure you have the right insurance coverage for your ride. You can find the perfect policy at a great price by getting personalized quotes from Insurify. In less than 10 minutes, you can get real quotes from up to 20 insurance companies tailored to your needs.
Buyer Beware: Things You Should Look Out for When Buying a Used Car
Sometimes, a good deal on a used car is too good to be true. That’s why it’s so important to make sure you do your research before financing or putting cash down on your next used vehicle.
Here are some steps to make sure you buy the right used car for you:
Check reliability ratings for the car in question
A good first step in your used car buying process is to check out reliability ratings. You can find information on general car brands and even research specific makes, models, and years.
Reliability ratings are based on consumer data about common car problems. The most notable car ratings come from Consumer Reports and Edmunds. Whichever source you use, keep in mind these only consider vehicle failures, like engine or transmission issues. The ratings don’t consider the cost of parts for repairs that are related to an accident.
Consumer Reports Reliability Ratings: Every year, Consumer Reports conducts an auto survey to learn which cars are the most and least reliable. The result? Reliability ratings. This survey considers both major and minor issues that result in costly repairs and loss of use of the vehicle.
Edmunds Used Car Ratings: Edmund s ratings are a little different from Consumer Reports. Instead of looking to consumer data, Edmunds completes its own testing on a test loop. It’s a good tool to compare cars with one another for size and price.
It’s a good idea to consider both sources before making your decision. Balancing a fair price with reliability increases the odds that you’ll be satisfied with your used car purchase.
Understand the warranty
Depending on how old the used car in question is, there may still be an active manufacturer’s warranty on the vehicle. This is especially likely if you’re buying a used car from a dealership.
What’s most important to understand is whether an existing warranty is transferable. Some are only effective for certified pre-owned vehicles purchased through a dealership, while others can change hands to a new owner.
Don’t forget to take into account the mileage and year limits on a warranty, too. Even if the warranty can change hands, it won’t do you much good if you’re nearing the expiration date.
Two main types of manufacturer warranties can be purchased or transferred for a used vehicle:
Bumper to Bumper Warranty: This covers most parts and systems of a car, but not wear and tear items that are expected to need maintenance, like brake pads and tires. However, it does generally include electronic systems.
Powertrain Warranty: This type of warranty is a step below bumper to bumper and covers most mechanical parts of a vehicle, like the engine and transmission.
While a warranty is nice to have, it’s still important to take the reliability ratings into account. A vehicle issue that requires a trip to the dealership or repair shop may be free under warranty but still cost you your time, whether it’s an afternoon or a few days.
Take the car for a test drive
Like any car-buying experience, it’s important to take the used car for a test-drive. This is especially important if you’re buying a used car from an individual and not an established dealership.
While it won’t take the place of a mechanic’s inspection, starting off with a test-drive can help you catch any major issues with the car. You may find that it’s just not a comfortable fit for you, but you’ll also be able to sense issues like loud fan belts or misaligned steering that could end up costing you money right off the bat.
Test-drives are a given at dealerships, but it’s important to advocate for this when you’re buying from a private owner as well.
Understand the car’s maintenance history
One of the many benefits of buying a used car from the dealership is that you have a better chance of understanding the car’s true history.
You should look out for:
Don’t just take a seller’s word on this, though. Make sure you get a verified vehicle history. Car dealerships usually have this information readily available, but you can easily access this information online before you head to the lot or after you find a used car privately for sale.
Think twice about a salvage title
Salvage title vehicles can be really cheap used car options. After all, a car with a salvage title has already been declared a total loss. This means you likely won’t find one of these on a dealer’s lot, but instead for sale by the owner. They are some of the most affordable cars out there.
A salvage title is for any type of damage that caused the car to be declared a total loss. This could be a serious collision, fire or flood damage, or even out-of-service high mileage vehicles like taxis and police vehicles.
Get a second opinion from your own mechanic
Even if you dot all your i’s and cross your t’s, nothing can take the place of having a trusted mechanic look at a used car to figure out if anything has been left out of the conversation. A good mechanic will spot any signs of serious damage, even if the car doesn’t come with an accurate history.
When you’ve made it to this step, you should ask your mechanic for a pre-purchase inspection. The mechanic will check the interior and exterior of the vehicle and likely take it for their own test-drive to check the engine and transmission in action. Even if the seller says that a mechanic has checked the car out, it’s a good idea to get a second opinion from a mechanic you know and trust.
The Worst Used Cars to Buy
Now that you know what to look out for before buying a used car, let’s look at which vehicles you should avoid at all costs. We’ve put together a list of cars from the Consumer Reports “Never Buy” list that you should steer away from. The Never Buy list is based on information collected in the Consumer Reports Annual Auto Reliability Survey.
Sedans and Small Cars
Some small cars like sedans and sports vehicles are known for having high horsepower, but that won’t do you much good if your car is always in the shop.
Minivans and SUVs
Minivans and SUVs are great for when you have a large crowd to haul around, or even if you just like to be a little higher off the road for better visibility.
These are some of the vehicles Consumer Reports has included on its Never Buy list:
Dodge Grand Caravan
If you’re buying a pickup truck, you’re probably looking forward to great visibility and decent mileage. But well-known and trusted brands like Chevy and Toyota have some models that you should stay away from.
Consumer Reports advises against some years of these vehicles:
Despite the high price tag, luxury cars don’t have the best record for reliability and can end up costing a lot in maintenance. Another downside to some luxury cars is that once a manufacturer’s warranty has expired, parts can usually only be sourced through a dealership, which can be costly and time-consuming.
Consumer Reports has included some models of BMW, Audi, Mercedes-Benz, Cadillac, Fiat, Mini Cooper, and Porsche on its Never Buy list. Even some models of Tesla ’s electric cars should be avoided, depending on the year.
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Is Buying a Used Car Worth It?
Buying a used car instead of a new car makes a lot of sense for many drivers. For one, they are generally cheaper than the newest models. Not only that, but new cars depreciate in value faster than used cars, so you will most likely take less of a financial loss when you buy a used car.
But that’s not all. If you can find a used car with decent mileage on it, you get the benefit of time on your side. That is to say, a few years after a car is released, there tends to be more information available about that car’s reliability. Consumer Reports and Edmunds issue reliability ratings for specific makes and models for given years, so you’ll be able to avoid any problem years. Unfortunately, when you buy a new car, you have no way to know for sure whether your vehicle will hold up to the brand’s standard.
Used cars can also lead to lower insurance rates. A lot of information goes into your insurance premium, and one piece of that is your vehicle’s value. A used car will generally have a lower Blue Book value than the same car in a newer model year, which means the cost of replacement is cheaper for insurance companies.
For those who dream of luxury cars but can’t quite afford the newest model, buying used offers a chance at a lower price tag and possible better financing options. Just make sure to steer away from the luxury cars that made it onto the Never Buy list.
Make Sure Your New Car Is Insured!
New or used, you want to make sure your next car has the right insurance coverage to protect your investment. Believe it or not, the type of car you drive can impact how much you pay for your car insurance premiums. And depending on the value of the used vehicle, you may even reconsider how much coverage you want to purchase. When you’re ready to switch to a new (or new to you) car, compare personalized insurance quotes with Insurify to find the best coverage at the best price.
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Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.