Need a new car? Here's how to get the best deal on a used vehicle

Are you in the market for a used car?

Separating the genuine bargains from the costly pitfalls can be difficult. Finding the best deal on a used car ultimately comes down to doing your research and balancing affordability with reliability.

Below, I’ll outline what to look for when used car shopping and offer some practical tips to help you get the best deal on your next set of wheels.

What to look for when buying a used car

Today’s used car prices are higher than ever as increased demand and short supply take their toll. Still, buying used is more financially responsible than purchasing a brand-new car that can depreciate as much as 20% after the first year.

The key is making the most of your money.

Here’s what you should look for and consider as you navigate the used car market.

Mileage and fuel consumption

A vehicle’s mileage is one of the key determinants of its price. Most gasoline engines and modern transmissions are expected to last between 200,000 and 300,000 kilometres before requiring considerable repair, a rebuild, or replacement, which are all very costly.

It’s not unheard of for well-built engines to last longer, especially if they’ve been well cared for. Unfortunately, this can be difficult to determine with used cars.

The mileage isn’t everything, though. Since odometers can’t be reset, you may find a used car with 300,000 kilometres on the dash that has a recently rebuilt engine and/or transmission. This could turn out to be a very good deal, especially if the rest of the car has also been cared for.

Negotiate and use the Kelly Blue Book value

Kelly Blue Book has an excellent free tool that you can use to determine a vehicle’s value based on the model, year, mileage, condition, and postal code. This is a great way to determine whether a vehicle is fairly priced and may give you leverage for negotiation.

One of the best parts about buying a used car is that there’s usually more room for negotiation, especially if you’re buying from an individual or a privately owned used car lot.

This editorial piece by Harvard University is worth looking at if you want to learn more about haggling for used cars.

Accident history

Even after the fender is replaced, there could still be underlying damage to the vehicle’s frame, suspension, or other components. If possible, try to find a used vehicle with a clean accident history. If it’s been in previous accidents, look for detailed repair records indicating that it was thoroughly inspected and repaired.

You can purchase a vehicle’s accident history through CARFAX for as low as $46.95, and many used car dealers provide CARFAX reports up front.

Maintenance records and ownership history

Well-maintained vehicles typically have a longer lifespan and encounter fewer mechanical problems. Look for vehicles that come with owner or dealership-maintained records indicating:

• Regular oil changes
• Scheduled fluid changes (transmission fluid, coolant, etc.)
• Regular tire rotations
• Routine brake service
• Routine engine maintenance (spark plugs, ignition coils)

Without records, it’s hard to prove how well the car was cared for in the past. The seller may clean it up, change the oil, and take care of repairs right before selling it in an effort to hide a history of poor maintenance or aggressive driving.

It’s also a good idea to look for a vehicle with fewer owners (preferably just one), making verifying the vehicle’s previous maintenance easier.

Commercial use

Vehicles that have been used commercially may not be as reliable as non-commercial vehicles. Examples include:

• Work trucks and cars
• Decommissioned police vehicles
• Cars used for Uber, Lyft, and other rideshare/delivery services
• Rental vehicles

These vehicles tend to be driven far more and have greater “wear and tear” than personal-use vehicles. They can still be good cars (especially if they were well-maintained), but you’ll want to test drive them and have them inspected by a mechanic before buying.

Interior and exterior condition

Cosmetics aside, a car’s interior and exterior condition can tell you a lot about how well the car was cared for. Dents and dings could indicate rough driving or unreported bump-ups.

In Canada, rust is the number one killer of cars. Salt, ice, and water from the roads cause the frame and suspension components to prematurely rust and degrade, which can lead to costly repairs.

Rust-proofing is the best option to prevent this. Make sure to look for a used vehicle that’s been properly rust-proofed and shows little to no signs of excessive rust build-up.

Check engine lights

If a car’s check engine light is on, there could be an underlying maintenance issue or costly repair that needs to be taken care of. Occasionally, a check engine light may be faulty or simply may not have been reset after a repair.

Either way, getting the code scanned by the dealer, a mechanic, or a local repair shop is a good idea to identify what’s causing it.

How it sounds and feels

When it comes to used cars, the test drive is one of the most important parts of the process.

Drive it slowly, at a moderate pace, and fast so you can feel how it handles at different speeds and in different gears. Ideally, it should drive straight, shouldn’t wobble, and have smooth steering and responsive breaks.

During this process, I recommend keeping the music off and windows down so you can listen for any strange clicks, clunks, or squeals that could indicate mechanical issues.

Balancing affordability and reliability

The most reliable used cars often aren’t cheap, and the cheapest used cars often aren’t reliable. The trick to getting the best deal on a used car is finding the perfect balance.

Start with thoroughly researching the make, model, and year of each vehicle you’re interested in. Get its KBB value, compare prices in your market, and search through internet forums to read other drivers’ experiences with the car.

By combining this knowledge with the tips above, you’ll stand a better chance of finding a great used car that fits your budget and will be better armed if the opportunity to negotiate arises.

Written for Daily Hive by Christopher Liew, a CFA Charterholder, former financial advisor, and the creator of Wealth Awesome.