Buying from a Dealer

Step 1: Find your Car
Every day, thousands of dealers across the U.S. advertise pre-owned car specials in local newspaper classifieds, weekly shoppers, consumer circulars and popular automotive publications such as AutoTrader.

Additionally, you can find a wealth of used car inventory by visiting dealerships in person most new car retailers across the country sell used cars too and there are a variety of independent used car lots that offer a broad range of good-quality, pre-owned cars.

In recent years, the Internet has created an entirely new pre-owned vehicle marketplace, with online information, products and services designed to assist consumers in the used car shopping and buying process. For example, offers a complete Dealer Inventory Search Feature that allows consumers to perform an online search of the new and pre-owned inventory available at local dealerships in their market area all from the convenience of their home or office. Additionally, certain retailers post their available pre-owned inventory at their own websites.

There are a variety of ways you can search for and find good-quality used cars in your area as well as the local dealers who sell those cars by doing a little bit of homework. Log onto the Internet or open your local newspaper. Your used car is waiting!

Step 2: Get a Value
Once you've found a prospective used car contender one that looks and sounds good and one you could definitely envision yourself owning and driving, now its time to figure out if the asking price is realistic.

To begin, you need to research the cars retail value by inputting the make, model, year, options and mileage information at the Used Car Information Center. This information is the fundamental foundation upon which all other assessments of value are built. Once you've inputted the make, model, year, options and mileage data, you'll be provided with a value report outlining several different values, including their descriptions.

The range of values listed on the vehicle value report is directly related to the year of the car you're interested in purchasing. Late model used vehicles are provided with two values average trade-in and average retail. Older used cars are provided with three values low, average and high retail.

When you're buying a used car from a dealer, you should research the vehicles retail value. This is the typical asking price of a vehicle sold on a dealer lot or the price a private party usually asks for the car on the open market.

Following is a complete description of what each valuation criteria means taken directly from the used car-pricing report.

Low Retail Value: A low retail vehicle may have extensively visible wear and tear. The body may have dents and other blemishes. The buyer can expect to invest in bodywork and/or mechanical work. It is likely that the seats and carpets will have visible wear. The vehicle should be able to pass local inspection standards and be in safe running condition. Low retail vehicles usually are not found on dealer lots.

Average Retail: An Average Retail vehicle should be clean and without glaring defects. Tires and glass should be in good condition. The paint should match and have a good finish. The interior should have wear in relation to the age of the vehicle. Carpet and seat upholstery should be clean, and all power options should work. The mileage should be within the acceptable range for the model year. An Average Retail vehicle on a dealer lot may include a limited warranty or guarantee, and possibly a current safety and/or emission inspection (where applicable).

Note: Vehicles with low mileage that are in exceptionally good condition and/or include a manufacturer certification can be worth a significantly higher value than the Average Retail price shown.

High Retail Value: A high retail vehicle should be in flawless condition. All power equipment should be functional. The paint should match and have a high gloss finish. The carpet and seat upholstery should be clean and have minimal wear. The engine should start quickly and run smoothly. The tires should be like new with a spare and jack. The mileage should be significantly below the acceptable mileage range for the model year.

Once you've determined your cars retail value by inputting its make, model, year, options and mileage information and by choosing which condition criteria most closely matches your specific car, you now have a solid numerical starting point to determine what it's worth. Now it's time to consider some of the other factors that could impact its value.

Step 3: Research the Car's Marketability
Pinpointing a retail value is the first step in determining what that car is ultimately worth. The next step is to determine the marketability of that vehicle, in essence, what other people are currently paying for similar cars with similar features in your local marketplace.

Its important for you to know how significantly a vehicles marketability affects its value. Think about it, a sleek sports car with low-profile racing tires is probably worth less money in a snowy climate like Minnesota than in a sunny climate like California. Further, certain vehicles are more desirable than others, depending on the city, county or state in which you live. Maybe a majority of local buyers prefer trucks and SUVs to cars, maybe more prefer four-wheel- or front-wheel drive to rear-wheel drive and perhaps even more want a car thats been modified, with aftermarket rims and a tricked-out sound system. At the end of the day, the market in which you live, the desirability of the vehicle you own and buyers mindsets ultimately determine a vehicles monetary value.

In order to determine the marketability of the car you want to buy, you need to do a little homework. A great place to start is with resources like Here, you can research prices of similar make, model and year vehicles in the same (or similar) condition and with comparable mileage as the car you're interested in purchasing. Additionally, you can research the marketability of similar vehicles in your local market area a good indication of local car-buyer mentality.

Whats more, you can review local newspaper classifieds, community bulletin boards and local flyers and circulars that run car ads on a regular basis. By combining the book value for your car with your local market research, you are finally getting closer to a realistic market value for your own used car.

Finally, don't forget to assess the specific features about the vehicle that, in essence, make it more desirable to potential buyers like yourself hence, potentially increasing its overall value. Is the car a hot-selling item? Does it have a sunroof, a comprehensive sound system, shiny aftermarket rims, leather seats, customized upholstery or any other unique characteristics that you would find appealing and would ultimately be willing to pay more for? has written several articles regarding add-ons and their potential to increase a vehicles value, including Do Add-ons add Value? published by various newspapers around the country.

Remember that while certain aftermarket accessories and vehicle customizations can certainly increase a cars value, they might also deter certain prospective buyers, ultimately decreasing its value in the process. Its up to you to determine what you'd be willing to pay for the added features the vehicle possesses and assess a value accordingly.

Step 4: Determine your Budget
Before you enter into the used car buying process, you need to determine what you can afford to spend.

If you plan to finance the car, you need to calculate what you can afford on a monthly basis (in the form of a monthly car payment) after taking into consideration all other personal monthly expenditures (i.e. mortgage, rent, utilities, etc.).

Once you've determined your monthly car payment allowance, now its time to figure out how much cash you can expend in the form of a down payment. Again, this will depend on your current financial status.

Finally, you need to determine an affordable used car purchase price. If you've already calculated what you can spend for a monthly car payment as well as any down payments applicable towards the purchase of the car, you've basically already determined what purchase price you can afford.

Step 5: Check for Guarantees
It's important to know ahead of time if the used car you're buying is covered under some type of warranty. In certain situations, the car may be covered under a manufacturers certification program. Other times, it may be covered under a dealer-backed warranty. If no warranties of this type exist (and for a little extra money) you can purchase an independent, extended warranty to cover the vehicle.

Warranty programs are important because they cover the cost of specific major repairs should something happen to the vehicle mechanically. Whats more, certified cars (ones that carry manufacturer warranties) go through a rigorous inspection process than standard used cars that don't carry a manufacturer-backed guarantee.

Vehicles covered under a manufacturers warranty (referred to as CPO, or certified pre-owned cars) typically cost more than standard used cars. In some situations, a CPO car may cost more depending on the make and model.

If you're unsure whether a guarantee exists for the vehicle you wish to buy, be sure to ask the seller ahead of time. It could very well impact the value of the car as well as the dealers willingness to negotiate price.

For more information about manufacturer-backed warranties, check out our CPO Center, an information hub designed to teach you almost everything you'd ever want to know about certified pre-owned cars, including warranty programs, the CPO inspection process, as well as an overview of various certified pre-owned programs available to consumers.

Step 6: Don't Buy a Lemon
Buying a lemon is probably the single biggest fear of most used car shoppers. While there are no guarantees when it comes to purchasing a used car, there are certainly a variety of guidelines you can follow to help ensure you're getting a reliable, mechanically sound vehicle at the end of the day.

In our Inspecting a Used Car section, we outlined the steps you should follow when personally inspecting a pre-owned car, including putting the vehicle through a comprehensive exterior, interior and mechanical appraisal. In addition to a handy checklist, we offer a variety of tips and advice to effectively appraise a used car from top to bottom.

What's more, we strongly suggest you solicit the help of a certified, reputable mechanic to inspect the used vehicle prior to purchase. Its always a great idea to get the vehicle inspected, especially if you're considering the purchase of an older vehicle with higher mileage or one that hasn't been routinely maintained or serviced.

Finally, we suggest you obtain a detailed, Vehicle History Report for the car based on its VIN number (the cars vehicle identification number) as back-up documentation about the validity of the vehicles title and mileage, in addition to determining if the car is salvaged or flood damaged in any way.

Step 7: Negotiate the Deal
Buying a car is one of the largest purchases a consumer can make. At, we understand the importance of negotiation as a tool to help car buyers get the best deal on a vehicle. Maybe you think the dealers asking price is over-inflated or perhaps you like knowing you're getting the best deal possible. Whatever your reason for bargaining, this section is designed to provide you with important information about when and how to use the art of negotiation to your advantage.

Before you enter into a negotiation process, be sure you're ready to buy nothing wastes more time than bargaining for a vehicle you have no intention of purchasing.

It also helps to do your homework ahead of time. Once you've researched the vehicles retail value at and once you've examined the marketplace to determine what similar vehicles with similar features are selling for in that marketplace, you should have a clear understanding about the vehicles current value based on its year, make, model, trim level, condition, mileage and market desirability.

Now that youve done your homework and you have a good idea about that used cars fair market value, its time to negotiate price.

Before you enter into the negotiation process, be sure to set a realistic low offer as well as a high price limit you would feel comfortable paying for the vehicle. Remember to keep in mind your budget and your price limitations when you enter into the negotiation process and be firm about those limitations. Most dealers understand that negotiation is a large part of the automotive purchasing process and expect the buyer to adopt some type of bargaining tactics before signing on the dotted line.

Start by making a low offer. Most times, the dealer will counter offer with a higher price than your initial offer, so be prepared to work up from your starting point to reach a selling price thats acceptable for both parties.

Be patient about the negotiation process it takes time to arrive at an agreeable selling price. Remember, be firm about your price limitations and dont forget to be realistic about your budget. Only you know how much you can afford to spend. For more information about bargaining tactics, be sure to read our Negotiating Strategies section, a comprehensive overview regarding how the art of negotiation can help net a better used car or new car deal, whether you're buying from a private party or a dealer.