Though you’ll generally pay less than you would for a new car, buying a used car is still a major purchase. But saving money on a used car doesn’t always mean spending less down the road. It’s important to know about a used vehicle’s past, its current condition, and its projected future maintenance needs.

What is the vehicle worth? If you know the type of vehicle you’re looking for, you can find out what it is generally worth through some quick and easy research. Several websites offer free online information on trade-in, private party and suggested retail values for used vehicles. Check the National Automobile Dealers Association’s (NADA) car prices guides at www.nadaguides.com, Kelley Blue Book at www.kbb.com, and Edmunds at www.edmunds.com.

Go beyond taking it for a spin. A test drive gives you at least a basic feel for how the vehicle handles on the road, its features, and any obvious problems. Beyond the test drive, it’s important to research a used vehicle’s history and current condition:

• Ask the owner or dealer for maintenance records. If it’s a dealer who says the records are not available, ask for the previous owner’s contact information.
• Seek information about past maintenance, repair and potential past damage through an online vehicle history check. The U.S. Department of Justice maintains the National Motor Vehicle Title Information System website that, for a small fee, provides information about a vehicle’s title, odometer information, and certain damage history. Go to www.vehiclehistory.gov. There are also commercial websites that provide various services for a fee. The National Insurance Crime Bureau allows you to run a vehicle’s Vehicle Identification Number (VIN) to determine whether it has been declared an unrecovered stolen or salvage vehicle. Go to www.nicb.org.
• Hire an independent mechanic to inspect the vehicle. Ask the mechanic for a written report about the vehicle’s overall condition and estimate for any necessary repairs. (Remember, a used vehicle is generally expected to have some wear and tear.) If a seller won’t allow you to conduct an independent inspection, walk away from the purchase.

Buying from a dealer? The Federal Trade Commission (FTC) requires used car dealers to place a large “Buyers Guide” sticker in all used vehicles for sale (though not for motorcycles or most recreational vehicles). The sticker must disclose whether the vehicle for sale is being sold “as is” or with a warranty, what percentage of the repair cost a dealer will pay under the warranty, and other important information for consumers.

• If the dealer sells a vehicle “as-is,” without any warranties, the dealer must check the “As Is” box. A vehicle sold “as-is” means that if you have problems with the vehicle after you buy it, you most likely will have to pay for any needed repairs yourself. The dealer generally has no further responsibility for the vehicle once you complete the sale and leave the dealership. But selling a car as-is does not mean the dealer can conceal material mechanical or other problems, such as past collision or flood damage.
• If the dealer offers a full or limited warranty, the dealer must disclose exactly which specific systems are covered (such as a drivetrain, brake system, electrical system, etc.), what percentage of the repair cost the dealer will pay, and the duration of the warranty.
• Make sure the dealer provides all warranty terms and promises in writing—don’t rely on spoken promises.

Buying from a private seller? Private sellers are not required to provide the “Buyers Guide” notice that a dealer must provide, so consider the sale “as-is” unless the seller provides you a written agreement that says otherwise. Depending on the vehicle’s age, it may be covered by a manufacturer’s warranty or third-party service contract. Ask the seller for any warranty or service contract documentation.

Buying online? Never buy a used vehicle sight unseen. Avoid sellers who ask for money up-front or demand funds through a wire transfer. Also be wary of a seller who claims that he/she and the vehicle are not in the same place--this may signal a scam.

Consider your loan options. If you plan to take out a vehicle loan, strongly consider getting pre-approval from FSB before looking at a particular vehicle. Knowing the rate you qualify for will help you arrange the best deal.