Knowing what to look for when buying a used car can help you make the right purchase. You should assess the vehicle’s condition, mileage, safety ratings, and more.
7+ years writing insurance and personal finance content
Contributor to top media, including USA Today
A passionate personal finance advocate, Sarah’s writing has graced the pages of many of the personal finance and insurance industries’ top web publications.
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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The average used vehicle costs $27,177, which is much more affordable than the average new vehicle cost of $47,542.[1]
The biggest downside of used cars is the possibility of buying a vehicle with issues. But with a bit of diligence, you can find a reliable vehicle to suit your needs and budget.
Learn more about what you need to look for when buying a used car, including how to secure a loan or lease, and buy car insurance coverage.
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What to consider when buying a used car
Start the process of searching for a used car by considering what type of vehicle you want to buy. Make a list of your non-negotiables to help narrow down your choices. For example, a family with multiple children might need more seats than a couple with two dogs. Plus, you can consider your planned usage, like whether you need storage or towing capacity.
Once you decide on the type of vehicle you want, start looking into specific vehicles for sale to find the right one for your household. Explore the following points when buying a used car.
Review the vehicle’s history using the VIN
A vehicle identification number (VIN) can provide relevant information about the car’s history. Once you have the VIN, start by seeing if the vehicle has had any recalls. A car with one or more safety recalls is a potential red flag. At the very least, you’ll want to make sure the owner or dealer has already addressed the recall before you complete the purchase.
You can also use the VIN or license plate number to track down a vehicle history report, which details ownership history, previous accidents, previous flood damage, and potential title problems. Some dealerships offer a free vehicle history report, but you might have to pay for this document.[2]
Consider mileage and vehicle age
Used cars often have plenty of miles on the odometer, so it’s a good idea to assess the mileage for each vehicle you consider. Generally, drivers add 10,000 to 12,000 miles per year to their vehicles. You can try finding one with lower mileage than is typical for its age.[3]
For example, if you compare a 4-year-old vehicle with 60,000 miles to a 4-year-old vehicle with 20,000 miles, selecting the lower-mileage option makes sense.
Before buying a used vehicle, you should review ratings and rankings from industry organizations and take note of driver opinions about the vehicle type you’re considering.
Perhaps most importantly, you can often assess what common issues arise with a particular make and model. For example, you might find that a specific model year’s engine contains an unwelcome flaw. Or you might learn a certain paint color peels off due to a mistake at the factory.
Additionally, you can check the car on Kelley Blue Book to see how its value has changed each year. You never know what you’ll uncover about a vehicle’s general history. But taking this step can help you feel more confident about your purchase or push you to seek out other options.
Have the vehicle inspected
Inspect both the interior and exterior of a vehicle before finalizing the purchase.
Start by looking over the outside of the vehicle to spot potential scratches, rust, and dents. Although small dings might not bother you, larger patches of damage might be a concern. Open and close each door, the hood, and the trunk to confirm everything is in working order. Also, consider getting underneath the vehicle to check for signs of leaking or rust.
Next, hop inside to take a good look at the interior wear and tear. Try to use all the electronics, like the windows and dashboard lights, to make sure everything works. If you detect a musty smell, check for signs of water damage.
Beyond a visual inspection, you’ll want a trusted mechanic to inspect it as well. A mechanic can assess the shock absorbers, spark plugs, and other key components to determine if anything needs repair.
Although you typically have to pay for a pre-purchase inspection, it’s worth getting a professional opinion. If the mechanic spots a major issue, you can decide not to purchase the car, which can save you time and money that you would have eventually sunk into the vehicle.
Take the car on the road for a test-drive
After the vehicle inspection, you should take the last step of test-driving the vehicle on the road. Throughout the ride, listen for odd noises, test the A/C, test the headlights, and make sure you feel comfortable in the driver’s seat. If everything checks out, you can feel confident driving off the lot with the used vehicle.
Most private sellers and car dealers will let you take a test-drive. It’s typically a bad sign if a seller wants you to purchase a vehicle without ever driving the car.
Certified pre-owned (CPO) vs. used cars
A certified pre-owned (CPO) designation indicates that a used vehicle is in excellent condition. Not all used cars have a CPO label. Essentially, it signals that a manufacturer backs the reliability of a previously owned vehicle after a pre-purchase inspection. Although the standards for a CPO designation vary based on the manufacturer, these vehicles are generally just a few years old with less than 60,000 miles.[4]
In some cases, CPOs come with warranties, which offer peace of mind to anyone purchasing a used vehicle.
But this extra layer of trust comes at a cost, as car dealers generally charge more for a CPO vehicle than a standard used vehicle.
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Applying for a loan or leasing a vehicle
When financing a vehicle, comparing car loan options across multiple lenders can help you find the most affordable option for your situation. As you apply, lenders may present you with loan offers, which should include the interest rate and fees involved with financing.
After you find the right car loan, make sure to read all the fine print before signing on the dotted line. Once you finalize the purchase, you’ll start making monthly payments to your lender. At the end of your loan term, you’ll own the vehicle if you’ve kept up your monthly payments.
Keep in mind that many car dealers offer car loans. But you’ll typically find better interest rates with a car loan you obtain outside of a dealership. Plus, getting your financing locked in pre-purchase can help you stick to a budget and potentially streamline working with a private seller.
Leasing a vehicle is another option. Generally, leasing involves a contract with a down payment and specified monthly payments for a predetermined period of time. In some cases, a lease restricts your mileage per year and involves charges for miles over the limit. After the lease is up, you might be able to buy out the lease or choose to lease a new car.[5]
Whether you lease or opt for a car loan, you’ll drive off the lot with the vehicle title and a monthly payment attached unless you can afford to purchase the vehicle outright. Generally, used-car owners drive away with a smaller payment than new-car owners.
Once you find the right used car, you’ll need to get appropriate insurance coverage. Use the steps below as a guide:
1. Consider your insurance requirements
Most states require drivers to carry a minimum amount of liability coverage. But most lenders and dealers require drivers who finance or lease their vehicle to purchase a full-coverage policy, which includes comprehensive coverage and collision coverage.
2. Shop around
Every car insurance company offers drivers slightly different rates. Compare quotes from multiple insurance companies to find the most affordable option for your situation.
3. Look for savings
Beyond shopping around, you can find a discount or increase your deductible to lower your insurance premium. In the right circumstances, the savings might be worthwhile.
4. Finalize your coverage
Purchase a policy that suits your needs.
5. Bring proof of insurance to the dealership
Most dealers require you to provide proof of insurance before you can drive the vehicle off the lot.
Buying a used car FAQs
Below, you can find answers to common questions about what to look for when buying a used car.
What is important to consider when buying a used car?
When buying a used car, consider the vehicle history report, safety recalls, exterior condition, interior condition, mechanical condition, mileage, vehicle age, and vehicle ratings. You’ll also want to take a test-drive before you buy a car.
How much mileage is too much for a used car?
Generally, well-maintained modern cars can cross 200,000 miles. A maximum mileage limit is a personal decision. If you plan to drive the car for many years, you might seek out a lower-mileage vehicle.
What should you bring when buying a used car?
When you buy a used car at a car dealer, you’ll need to bring financing documents, your driver’s license, and proof of auto insurance.
What should you consider when buying a pre-owned car?
When buying a pre-owned car, you should consider the vehicle history report, safety recalls, exterior condition, interior condition, mechanical condition, mileage, vehicle age, and vehicle ratings. It’s also useful to consider possible warranty details for certified pre-owned vehicles.
Sarah Sharkey is a personal finance writer who enjoys helping people make savvy financial decisions. She covered insurance and personal finance topics. You can find her work on Business Insider, Money Under 30, Rocket Mortgage, Bankrate, and more. Connect with her on LinkedIn.
Sarah has been a contributor at Insurify since September 2022.
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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