New or Used Car Loans

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Once you've decided to buy a used car instead of a new one, you've got the challenge of buying a good used car for a good price. These tips can help.

Do your research
Consumer Reports publishes an annual auto issue that has excellent general information about the quality, reliability, safety ratings, ballpark insurance rates, and recalls of any car. You can also access these articles online for a monthly subscription fee.

Where to look
Some places to look for a used car:

  • Online car sellers
  • Local newspapers
  • Used car lots
  • "For sale" signs in parked and passing vehicles
  • Car rental companies
  • Corporation fleet cars – these cars have been professionally maintained, have low mileage, and since they're written off as business expenses, fleet cars are often offered at lower prices for quick sale.

Pricing
To find out the value of a specific car in your geographic area, you can use the Kelley Blue Book, which is the guide that banks typically use to value cars. You can also look through your local paper to get a sense of what comparable cars are selling for.

Evaluating used cars With a little knowledge, a lot of common sense, and maybe some professional help, you can competently size up the quality and mechanical health of a used car. But before you take the time to test drive a car that you think may be the one, check the title of the car. By checking the title, you can learn if the car:

  • Has ever been totaled in an accident or natural disaster (and then repaired and sold for a large profit)
  • Was returned as a lemon
  • Had its odometer rolled back
  • Has been in a serious accident (in some states)

These are all good reasons to walk away from a car even before taking a look at it. To check the title, go to Carfax.com to access their database of more than 750 million vehicle records (in the U.S. and Canada).

Finally, after you've checked out the title, inspected the car, and taken it for a proper test drive, invest the money it will cost to take it to an independent, trusted mechanic for a thorough check over. A mechanic will be able to perform a more thorough diagnostic, and spot problems that could cost you a lot of money down the road. It's a small price to pay for peace of mind.

In addition to this research, you may want to consider a vehicle history report, complete a Bill of Sale and get pre-approved with an online car loan application.

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