So, you need a new set of wheels but you can't afford to shell out more than $20,000 - the average cost of a new car. And you don't want to drive around in an unreliable "old bomb" either. What are your options? The good news is that there are lots of great deals available on "previously owned" cars. But be aware that buying a great used car requires navigating through a few special steps to ensure that you will get the most reliable and safe car. Follow these tips and you'll be rolling down the highway with confidence.

Get the Facts

Figure out which car best suits your needs and how much you are able to spend. Use the internet to do your homework. Go online to find out the value of a particular model, scan online classified ads, and search car finance loans, among other things. Each car-buying site has a certain area of expertise.

Of course, you can do your research the old-fashioned way - at your local library. Look through popular consumer publications such as Consumer Reports for reliability and repair ratings, as well as general advice on the used car-buying process.

Places to look for used cars include: new car dealerships, used car dealers, private individuals, and auctions. Unless you plan to pay cash, get quotes from at least two financing institutions, so that you know what payment and interest rate options exist before you talk to dealers.

Avoiding Problems and Pitfalls

Try to find out as much as possible about the history of the vehicle. Ask the seller to provide you with copies of the repair records, if available. In addition, get a vehicle history report. The report includes such important information as to whether the car has ever been issued a salvage title (from being in an accident), a flood title, or a junked title, and if the odometer has been tampered with.

Depending upon the mileage and prior maintenance performed, a used car could require more repairs sooner after you purchase it than a new car would. There are several additional steps you can take before you buy to insure that you are not buying a car in poor condition. Consider paying a mechanic to look the car over first. This might cost up to $100, but if you are serious about the car, this should be money well spent to insure that you are buying one that's reliable and safe. Take the car for a test drive and check out the braking, steering, shifting, acceleration, engine noise, and how well the accessories work.

A Word About Certified Used Cars

Since the mid-1990s, dealers have been selling a special type of used car - the "certified" used car. Cars which have been leased or traded-in are evaluated to see if they qualify for certification. Vehicles that qualify are usually in very good condition, with low mileage. The dealers have their mechanics perform a detailed inspection and they offer various warranties. Certification can mean different things to different car manufacturers, so it's important to check with each dealer to get the details of their certification program. Review the warranties carefully to see which repairs are covered and which are not. You can check the websites for car manufacturers or contact dealers for information on their certification programs.

Buying a certified used car is a way to pay much less than you would for a new car, and still get recent models and features. The warranties should offer greater peace of mind because the dealers have taken the guesswork out of what condition the vehicle is in.

Check for Car Safety Features

One of the most important considerations when looking for a car is what safety features they have. You should be able to understand what they are and what they are worth to you. If you haven't bought a car in many years, you may not be familiar with some of the newest safety features. Some features are mandatory and some are optional. Safety features on many recent models include:

  • Front and side air bags.
  • Head injury protection such as head air bags (shield you from impact with the upper interior of the car).
  • Anti-lock brake systems (ABS).
  • 4-wheel drive with traction control (usually with ABS).
  • Automatic dimming rear-view mirrors (to reduce glare).
  • Daytime running lights.
  • New child seat attachment systems.
  • Built-in child safety seats.

Dealing with Dealers and Private Sellers

Once you have done your homework, know which car you want, and how much you want to spend, it's time to start bargaining with the sellers.

Finding private sellers is as easy as checking the newspaper classifieds or going online to the electronic "classifieds" at websites such as AutoTrader. Don't forget to check with your family and acquaintances to see if anyone is selling their car. When you buy from private sellers, you usually pay less than you would if purchasing from a dealer. However, you may not have as many legal protections. Therefore, although you pay less initially, you run the risk of getting lower quality as well.

When talking to car dealers, remember that it is very difficult to get out of a contract once you sign on the dotted line. Therefore, do not commit to buying or sign anything the first time you go in. Since you did your homework, take the information you gathered and show the dealer you are an informed person, so you can make the deal on your terms instead of theirs. Negotiate based upon the selling price - not payment plans - and be sure to get full disclosure of every charge involved. Don't take their word on promises made - get any proposal in writing.

Finally, follow your instincts - if you feel pressured or powerless when dealing with any seller or you sense they are playing games with you, LEAVE. There is always another good deal waiting for you around the block.

Tips for Negotiating a Good Deal

  • Regardless of who you are dealing with, a good strategy is to let them know you have "cash in hand" or pre-arranged financing.
  • If you have done your homework, you should be able to tell if they are asking for too much money for their vehicle. Let them know you have checked the prices at other sources and ask them to lower the price.
  • Notice the condition of the body, paint, and tires. If it needs work, this is a reason to ask the seller to lower the price.
  • If you have had the car inspected and found it needs mechanical repairs, inform them that the price should be lowered accordingly.
  • Try to find a balance between appearing uninterested and being too anxious to buy. If you seem indecisive and hesitant, the seller might respond by lowering the price. But, be careful because this could backfire. If you seem too hesitant, someone else might be close by with cash in hand to buy the car.