17 Worst Used Car Buying Checklist Mistakes You Should Avoid


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A used car buying checklist isn’t something we were taught in school

Is it time to buy a car but you’re dreading the process? You know you should haggle to get a better price. And you know you’ll get more money for your trade-in if you sell it privately.

But it all seems like such a high-pressure headache, doesn’t it?

The key is knowledge. A used car buying checklist can make all the difference. You especially want to know what NOT to do. Having just taken these steps myself, I can help.

Personal finance in general wasn’t taught to me in school; be it a household budget or even balancing a checkbook (yes, I went to school when people still used to write checks).  It wasn’t taught.  So if your parents weren’t astute financially, it’s no wonder most of us don’t have a clue how to buy a car.

New, used, pre-owed, leasing.  What’s the difference?  Should you buy a car off Craigslist?  Do you pay more buying from a dealer? How do you know you’re getting a great deal?

We’ll get into all that and more in my used car buying checklist, so read on!

First, figure out how much you can spend on your car

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This is crucial!  You never want to blindly go into a car dealership having no idea what you can afford.

I know it’s tempting to log off, run down to the dealership without a used car buying checklist. You sign wherever they tell you to and then drive off!  But trust me; that’s NOT how to buy a car.

If you do that, you’ll pay later; literally and figuratively.

You must go into the process with knowledge in hand.  Knowledge is power and power gives you the advantage and leverage; things you need when going into the lion’s den that can be car dealerships.

OK, that was a little dramatic, but car salesman don’t get a bad rap for completely no reason.  Of course the way we buy cars, and thus the style of the salespeople is changing, and there are also a lot of great folks out there who sell cars.

But it still pays to:

  1. Know what you want
  2. Be informed on the average price for that model, year, mileage and condition
  3. Have a good idea of what you can afford

Don’t be a loan ranger!


For me, I don’t use credit or debt on anything other than our home.  Thus when we bought a car last (a few weeks ago as of this writing), we paid cash.  I don’t recommend debt to anyone else either.  That’s just not how to buy a car in our house!

If your family struggles with debt the way mine did, I highly encourage you to check out our story out of debt. These are the steps we took to better our lives and they can better yours as well. So check out my 5 Great Ways to Improve Finances & Save Your Future!

That being said, you run your house the way you want to and that’s OK.  Whether you use a car loan to buy a car or not, it’s still important to know what you can afford.

When I did have car payments (7+ years ago), I preferred a payment of somewhere around $200/month.  I feel like for a household making between $60,000 and $100,000 per year, that’s a manageable payment.

Don’t be fooled by low payments with long terms though.

As with any loan, the longer the term, the more interest you’ll pay over time.  Ideally get as short a term as you can afford; 3 or 4 years and certainly no more than 5.

I once had a car payment that was almost $500/month. My salary then was 6 figures. But even though I wasn’t married and was childless, it still hurt to write that check each month.

I didn’t know how to buy a car and I made most of the used car buying checklist mistakes I list below!

When you buy more car than you can afford, you’ll never truly enjoy the experience of being in that car!

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What I also know is that having a written budget each month is key to understanding how much car you can afford. If you are on a budget but struggling to stay consistent or just need help keeping your budget in line, I suggest you check out my post 5 Effective Household Budget Tips – Make Your Money Work Smarter!  Just some simple, actionable tips to make your finances work better!

New or Used – what’s the difference?

A new car loses 11% of its value the moment you drive off with it.

If you just paid $25,000 for that car, that’s the equivalent of throwing almost $3,000 right out the window!  That is NOT how you want to buy a car or spend your hard earned cash!

In other words, IT’S NEVER A GREAT IDEA TO BUY A NEW CAR!

Have tons of excess cash, no debt and just want that new car smell? Don’t care about wasting your hard earned $$? Go ahead.  For all the rest of us Middle Class Dads, that is NOT how to buy a car, no matter how you slice it.

A used car in most cases just makes way more sense.  THAT is how to buy a car. Someone else took that 11% hit for you.  If they kept up with maintenance and weren’t in any accidents, that car will be just fine. Pre-owned is just a fancy way of saying used.

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Should I Lease a Car?

Dave Ramsey, probably the world’s leading expert on personal finance, refers to leasing as “fleecing”.  For good reason too!

Make no mistake, when you lease a vehicle, it’s just another way of borrowing money to pay for the car.  But more like an interest-only loan; your payments never go towards the principal. And unlike traditional financing, you are typically required to put down more money as a down payment.

People get sucked into leasing because it typically allows them to drive a nicer car than they can really afford.

But is that feeling you get driving that new Lexus to work really worth all the cash you’re burning?  Is that really how to buy a car that makes sense for your family and budget?

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Leasing Extras – How to buy a car the expensive way!

You also have restrictions on how many miles you can drive.  Those extra miles you drove will be charged to you at the end of the term anywhere from 10¢ to 30¢ cents per mile.  Go 5000 miles over each of the 3 years of your term and that could be an extra $4,500 you hadn’t counted on paying!

You are allowed to have the vehicle get “normal wear and tear”.  But that’s a very subjective term and anything beyond that will cost you extra. Plus unless you pay additional money at the end to buy it, you never truly own the car.

Also, bear in mind that your insurance typically would cover the value of the vehicle; not what you owe on it.

Thus that brand new Lexus you just lost 11% on as you drove off is now worth $22,000.  But if you total it or it gets stolen and you still owe $25,000, guess what?  In addition to your insurance deductible, you also have to pay that $3,000 difference.  A costly mistake!

Have a lot of money to burn and want to be able to simply drop the vehicle off at the end of the term and walk away (after writing a good sized check)? STAY AWAY FROM LEASING; that is NOT how to buy a car!

Listen to Dave Ramsey explain the math on car leasing right here!


How to buy a car at the best price

My wife and I just bought a late model Mazda5 and we love it.  Thus, I’m in a great position to tell you exactly how we found it.  But you don’t even want to start this step until you know exactly how much car you can afford and where that money is coming from.

Once you know your budget then you need to figure out your needs.  For my family, we wanted more room.  We’re a family of 5 driving cars that can barely squeeze 5 into them.  Thus, trips with friends or in-laws always required 2 vehicles.

Your needs may be different.

Is it good to buy a used car with high mileage?

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Once you know the type of car, if you’re buying used, you want to figure out the max mileage you’re willing to accept.

For us, 80,000 miles was our threshold.  Anything significantly over that means potential large repairs in the near future.  But also consider that cars these days can go well over 200,000 miles if properly maintained.

We live in a culture that feels entitled to a new car every few years.  Thus, many of us sell or trade in our cars well before they have truly run their course.  They get 40,000 miles on them or the moment that 5 year loan is done and people get new car fever!

There’s no shame in buying a late-model car.  There’s also no shame in driving it 200,000+ miles.

But driving a car you can’t afford while in debt up to your eyeballs?  Well, there is shame in that!

Make no mistake, a used car at a great price will still save you a lot of money even if you have to put some repairs into it right away.  But you want to manage that process and have a little cushion before those expenses hit.  There are no guarantees but choosing a car carefully and getting it inspected can significantly minimize surprises.

I started on my used car buying checklist by looking on Craigslist.  Sure some scams go down there, but if you’re careful, it’s a great place to start.  Plus these days most car dealers list their cars there too.

But it’s a great idea to check multiple sites in your area and see what’s available and the range of prices.  You’ll want to look at a lot of cars and take your time!

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Check out the eBiz list of the 15 Most Popular Car Websites.  That’s a great place to start your search.

Once you see some cars that look appealing then it’s time to dig deep and look at the history of that specific vehicle and the true street value in your town.

Not sure, how to do that?  Read on!

How to buy a car you won’t regret

Kelly Blue Book (often referred to as KBB) and Safe-Vehicle are your friends here.

Kelly Blue Book allows you to look up the value of any car.  You enter specifics like your zip code, mileage, year, condition, etc.  Then it gives you the value if you are buying/selling from/to a dealer or individual, trade-in value, etc.  You don’t want to buy a late model car or sell your existing car without knowing the going rate in your zip code.

Safe-Vehicle, on the other hand, can give you vehicle history for almost all used cars and at a fraction of the price of CarFax and other VIN report companies.

How many owners.  Accident/repair history and much more.  Has it ever had a salvage title (meaning it was totaled)?  Many dealers these days proudly offer a vehicle history report.  Many that do even give you online access to the report from their website.

You will still want to get the car inspected by a 3rd party.  But the Safe-Vehicle report helps you to eliminate lemons before you pay for inspections. These guys are crucial for your used car buying checklist.

Can you take a used car to a mechanic before buying it?

You’ve selected a great late model used car and you’ve seen the CARFAX report. The next used car buying checklist step is to get it inspected.  Ideally, you have a regular mechanic who you trust. If so, that’s who you want to take it to.

I have to give a shout out to our mechanic who is fantastic (he drove to my house today while I was at work to take a look at one of our cars that had a mysterious fluid leak).  His name is Adam Potter of Potter Automotive.  If you live anywhere south of Austin, he’s well worth seeking out!

But if you don’t have a regular mechanic, then using Yelp, I would select a well-rate mechanic close to the dealer or seller.

If the seller won’t allow you to get it checked out or are insistent that their mechanics will check it out, RUN; don’t walk, and go elsewhere.

That’s a huge red flag; what are they hiding?  Is there something huge they don’t want you to know?  You absolutely need someone to look at it who both knows what they are doing and is impartial.

How much does it cost to have a used car inspected?

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You want what is often called a pre-purchase inspection.  It’s not an in-depth hours long inspection.  But it does check all the major components of a car and will give you a good idea of any work that will be needed soon or down the road.

A typical pre-purchase inspection will be anywhere from $75 to $100 or maybe a little bit more. This is crucial for your used car buying checklist.

Once you know what work may be needed in the immediate future, ask for that amount to be reduced from the purchase price.  Unless their asking price was rock bottom on the KBB value scale, they will likely accept that offer.

Also know that most of the time, you’ll pay the purchase price plus tax, title and license.  Those things will vary a little state by state with state sales tax being the biggest variable.  But in general, you’re looking at anywhere from an additional 6-12% of the sales price.

Use this handy auto loan calculator from calculator.net to factor your specifics.

What used cars NOT to buy?

You can find lemons from almost every manufacturer. That being said, Consumer Reports has compiled a list of the worst used cars to buy.

Surprisingly enough, you’ll see models from almost all the major makers:

  • Acura
  • Audi
  • BMW
  • Buick
  • Cadillac
  • Chevrolet
  • Chrysler
  • Dodge

and more!

Their handy report allows you to select the manufacturer and it will tell you what years of their cars represent the worst used cars to buy.

This one needs to be on your used car buying checklist for sure!

What is best used car to buy?

Edmunds compiled a list of the best used cars to buy for under $18,000:

  • Honda Civic (2014-’15)
  • Mazda 3 (2014-’15)
  • Honda Accord (2013)
  • Hyundai Sonata (2013-’14)
  • Kia Soul (2014-’15)
  • Honda CR-V (2012)
  • Subaru Outback (2010-’12)
  • Nissan Murano (2010-’13)

Your mechanic is also a great person to ask. After all, they know what keeps coming back for more. They also know what cars only ever come in for an oil change.  As an added plus, because they’re local, they also are aware of how factors like weather or your local roads can affect a car.


So what are my . . .

17 Worst Used Car Buying Checklist Mistakes You Should Avoid?

1. GOING TO A DEALER FIRST

  • They are counting on you coming in unprepared
  • When you’re not prepared, you’re more opt to make an emotional decision
  • An emotional decision will likely cost you thousands!

2. NOT KNOWING EXACTLY HOW MUCH YOU CAN AFFORD

  • Your budget is your key to success; in life, in marriage and in general
  • Not knowing what you can afford will likely mean you end up with something you can’t afford

3. NOT SAVING UP FOR YOUR CAR

  • Guess what you can do when you don’t have a $200-$500/month car payment?  LOTS OF THINGS!
  • Debt will slow your accumulation of wealth & slow your ability to retire on time and in style
  • Saving keeps your impulses in check and your financial future in tact

4.  NOT CHECKING YOUR LOCAL CREDIT UNION FOR LOAN INFO

  • If you do insist on debt, check your local credit union auto loan rates
  • My credit union is currently offering auto loans at 1.79% interest.  Chances are your local dealer will be much higher

5. GETTING A LOAN LONGER THAN 5 YEARS

  • Don’t get suckered in by a low payment
  • A $200/month payment doesn’t mean much at 5% over 7 years
  • That will have you paying a grand total of almost $30,000 for a $25,000 car that drops in value to $22,000 the moment you drive it off the lot!

6. NOT ASKING YOUR LOCAL MECHANIC FOR RECOMMENDATIONS

  • Your personal mechanic sees a lot of cars
  • They know what they have to fix frequently, what’s challenging to fix and what is easily fixed or rarely in their shop
  • Seek out their advice as they are the one who knows!

7. NOT CHECKING REVIEWS ONLINE

  • With everything readily available at your fingertips, there’s no excuse to not have looked at online reviews, groups and forums for the car you’re considering
  • That should give you a very good idea of what you’re in for if you purchase it; the good, the bad and the ugly

8. BUYING A BRAND NEW CAR

  • As I point out above, you might as well take 11% off the price of the car in hundred dollar bills and set it on fire
  • You’re paying an awful lot of money for that harshly chemical new car smell
  • For what you would save in buying a late model version of the same car you could take the family to Disneyland

9. NOT CHECKING KELLY BLUE BOOK FOR THE TRUE VALUE OF THE USED CAR YOU BOUGHT

  • We may be expected to buy medical treatment without knowing the price ahead of time, but for everything else we buy in this world, it’s pretty easy to figure out an acceptable price range
  • Know that range and stay within it
  • The KBB site is your friend!

10. NOT HAVING A USED CAR CHECKED BY A NEUTRAL 3RD PARTY MECHANIC

  • Getting the car checked out by someone who doesn’t financially benefit in the transaction is crucial
  • If you don’t have a regular mechanic you trust, use Yelp to locate a trusted mechanic near the seller
  • Never just blindly accept the dealer’s word that the car is clean or without issue

11. NOT MAKING AN OFFER BELOW THEIR ASKING PRICE

  • Some dealers may have the vehicle well priced so it moves quickly
  • If you did your KBB homework, you should know the price range on this vehicle with its exact mileage and condition in your zip code
  • Any offer in that range is perfectly acceptable and in a high supply situation (where the dealer has a ton of inventory) you may be able to dip a little below the bottom range
  • But do strive to be fair; you don’t win by making someone else lose

12. BUYING AN EXTENDED WARRANTY

  • Just  like at Best Buy, you don’t want extended warranties
  • This is where most retailers make their big bucks
  • They are counting on you either not remembering the warranty or selling the car before you need to use it
  • Often (especially if you bought a car using the above steps) you’ll come out much further ahead financially without this

13. BUYING EXTRAS LIKE UNDERCOATING

  • Unless you live in a salt marsh your car doesn’t really need rust proofing undercoating
  • Even if you do feel you need it, you’ll find it elsewhere for a lot less
  • Also skip the upholstery sealing; most car seats can easily be cleaned and your family’s health will appreciate the lack of those chemicals on the seat and in the air inside the car
  • These things, like the extended warranty, are often the highest markup things car dealers sell

14. TRADING IN YOUR OLD CAR

  • The car we’re about to sell is a 2006 Kia Spectra.  Not glamorous, I know
  • If I sell that car on Craigslist, with our mileage and condition, we can get about $1700 (priced using KBB’s “check my car’s value” page)
  • The trade-in value, however, ranges from $250 to $750
  • So while I know it’s easy to just drop off your old car and sign a few pieces of paper, you’re also setting fire to $1,000 or more of your hard earned dollars!

15. NOT CHECKING THE VALUE OF YOUR TRADE IN ON KELLY BLUE BOOK

  • As with step number 14, know the value of the car you plan to get rid of
  • If the dealer will give you close to the street value it might be worth the loss for the hassle-free action of trading it in
  • But if you haven’t checked the value (both trade-in and selling privately) then you don’t have enough info to make an informed decision
  • Not all cars are created equal in terms of what cars hold their value best. So its worth researching before your next purchase.

16. LEASING A CAR

  • Just another means of financing a car
  • Except it’s not really yours & you have restrictions on mileage and wear
  • Basically one of the worst financial ideas you can have outside of a 10 year car loan

17. NOT ADDING YOUR NEW CAR TO YOUR INSURANCE THE DAY YOU BUY IT

  • According to Insure.com, you have between 7 and 30 days to add a new vehicle to your existing insurance policy
  • It varies due to both state regulations and difference between insurance companies
  • Since virtually all auto insurance companies allow these changes online, the best practice is to add the vehicle the moment you get home and then print a new coverage card right then and place it in your new car!

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Was this the used car buying checklist you were hoping for? 

What could I have improved in it?

Feel free to comment here or email me with any questions as I am here to help!

If you like this post, please consider sharing on Facebook, because if it helped you, it just might help someone else!

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Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market.

4 thoughts on “17 Worst Used Car Buying Checklist Mistakes You Should Avoid

  1. My wife and I have been thinking about getting a new car but we aren’t sure where to start. I like that you suggest selling your old car online instead of at the dealership. This sounds like a great way to get the most from it and help finance the new car. Thanks for the tips!

    1. Thanks Derek

      I did a lot of research before we bought our last (used) car and figured it might help others to see what I learned so I’m glad you find it helpful! I think most folks just trade in their car at the dealer both because it’s quick and easy but also because most people are financing their cars and thus don’t really look at the dollars involved, especially the dollars they are losing. Others probably are just unclear on what steps need to be taken to sell a car to an individual (although that info per state is easily Googled). Others still might be cautious about excepting large payments from strangers and either being concerned about counterfeiting or bad checks. In that case meeting at their bank and getting (and then cashing) a cashier’s check right from the teller clears that up).

      Thanks for being here!

      Jeff

  2. Thanks for the excellent content. Wish to see even more shortly. Thanks again and keep up the great work!

    1. Thanks for the compliment!

      If you ever have any suggestions for posts you’d like to see, please let me know.

      Cheers, Jeff

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