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 How to buy a used car

Buying a used car is one of the best ways to find a reasonably-priced car with low risk. However, it helps to know what you're looking for, or else you might end up overpaying for something that will break down in a few months!

In this post, we'll talk about how to decide if your budget is realistic and what steps you need to take once you've found a good deal. We'll also point out some warning signs that the seller may not be honest and show you how to test all of the car's features before buying it so that there are no costly surprises later on.

Pictured: Not a used car.

Used car guidelines

When buying a used car, it's important to stay realistic in your budget. If you are financing the purchase, avoid loans that are shorter than five years or take more than ten percent of your annual income. You won't feel the full effects of an economic downturn until after that first five-year mark, when you may lose your job and then possibly have to file for bankruptcy because of the unpaid loan payments on the used car!

For more information about how loans work, read more on our other blog post .

If you can't afford a used vehicle, consider buying a cheaper new car instead. You might have to spend extra money to have it retrofitted to your desired specifications, but it will likely be worth the cost compared to buying an expensive used car that soon becomes more of an issue than a pleasure.

In either case, know how much you're able to pay out-of-pocket and stick with it. If you don't have the cash available, you'll need to get financing so that if the car breaks down in just a few years, you won't be stuck with payments on something that's now effectively scrap metal.

For more information about how to pay for a used car , click here .

Additionally, remember that you can always save money by buying at the end of the month or by waiting for sales. If you do decide to buy during a sales event, remember to get everything in writing on a contract . The worst thing you can do is wind up paying too much for the vehicle because you agreed to waive your right to return it during the final negotiation and now can't get your deposit back!

When you know your budget, it's time to start looking for cars.

Budgeting

Before you start this search, know what you're willing to spend and how much time it'll take. If you aren't sure, write down a rough estimate from a few days before the sale and then add 10% to that number to allow for unforeseen problems.

Another helpful method of budgeting is to think about what each purchase has cost you in the past. Figure out how much money you spent on:

Material costs , such as buying paint brushes, sandpapers, and other equipment used for painting the car (assuming that most of these supplies were purchased at your work).

Labor costs , such as the time spent painting the car and transporting it to paint or offsite locations.

Specialty tools , such as those for removing the undercoating, glass work, or other jobs that required equipment that you wouldn't normally have on hand.

Markups , like what percentage you added to the hourly rate to pay yourself for your time as well as any overhead costs like paying rent on a warehouse while working on this car.

If you already have a car (or cars), think about how much that purchase cost you over the years in terms of repairs, fuel, insurance, registration, and similar costs and add another 10% to that. From there, you can create a budget for how much you will spend on each project.

What is not included in this? What should be included?

The budget should not include fees for parts or materials that are reusable (paint thinner and painting supplies). These materials can be reused on your other projects. Additionally, it doesn't include fees for parts or materials that stop being viable after the vehicle is painted (paint itself or finishing materials like polyurethane). These can only be purchased once.

Once you know how much you'll spend on the car, you'll need to decide on a budget. Is it $10,000? $5,000? $2,500? If it's going to be more than that, don't go any bigger -- because you can always cut as much as you need to in order to meet your desired price point. As long as that amount is less than the actual cost of the vehicle itself, it will allow for just about any job. If you want to be more efficient, you can also look at the current market value of the vehicle and try to find a few that are under that figure.

The difference between all of these numbers will be how much you'll get back when all is said and done. This may seem low in comparison, but remember that a lot of it is markup!

You don't need to buy parts in bulk amounts or paint everything at once -- do it bit by bit, as needed. If you do, try to work with a painters' supply store so that you get better prices.

If you're doing all the work yourself, make sure to wear non-slip shoes. It's also a good idea to wear gloves and safety goggles because now you'll be using paint for more than just the outside of your car. Also, make sure to do your prep work early in the day so that there are no delays that might result in someone getting hurt (or worse).

Newsflash! You need to ask the seller about any problems or defects and check out the vehicle before making your final decision.

Conclusion

The key to any used car purchase is patience and research. Not only do you need to make sure that you're able to afford the vehicle, but you also need to make sure that it's in good enough condition so that the purchase is worth your time and money. Think about how much it'll cost for each issue in terms of materials and labor, whether it makes financial sense, and how long that issue will last.

You also want to look at the bigger picture -- if you can't afford a used car now or if there aren't any reasonably-priced cars available at this particular point in time, then buying an expensive (and possibly high-maintenance) used car isn't going to cut it either.