Whether you’re 16 or 60, buying a used car can be an exciting experience. But it can also be a big financial commitment, with some industry reports estimating that the average price of a used car is close to $28,000. The more you know going in to the dealer, the better you'll feel driving out. For example, dealers have to put a Buyer’s Guide on every used car. You’re also entitled to a Buyer’s Guide if you buy a used car online. The Guide will tell you if a car has a warranty, or is being sold “as is.” You’ll also want to get a vehicle history report and get the facts about independent inspections, payment options, and what to do if you have a problem after the deal is done.
Before you start shopping for a used car from an auto dealer in person or online, do some homework. It may save you serious money. Consider the kind of car you need, how you’ll use it, and your budget. Don’t forget other costs like registration, insurance, gas, and maintenance. Research models, options, repair records, safety tests, and mileage.
Once you have a car (or cars) in mind, ask for the out-the-door prices in writing from dealers before you visit. Use those quotes to
Then, find out about the dealer before you visit. Contact your state and local consumer protection agencies to find out if any unresolved complaints are on file about a particular dealer. Also check out a dealer’s reputation by searching online for the company’s name with words like “scam,” “review,” or “complaint.”
Dealers have to display a Buyers Guide in every used car they offer for sale. They also have to give it to buyers after the sale. This includes light-duty vans and trucks, demonstrators, and program cars. Demonstrators are new cars that haven’t been owned, leased, or used as rentals, but have been driven by dealer staff. Program cars are low-mileage, current-model-year vehicles returned from short-term leases or rentals. Dealers don’t have to display a Buyers Guide on motorcycles and most recreational vehicles.
Dealers in Maine and Wisconsin display their own version of the Buyers Guide.
Add-ons are optional products and services offered by the dealer, like gap insurance, Vehicle Identification Number (VIN) etching, and rustproofing. Often, add-ons can cost thousands of dollars and are mentioned only at the end of an already difficult and time-consuming day at the dealership. Other times, dealers may try to include these and other add-ons in your deal without ever discussing them with you, and without your knowledge or approval. You can usually buy the vehicle you want without any add-ons, and you can buy most add-ons from independent retailers. If you want an add-on from the dealer, be sure that you ask how much you’re paying for each add-on and what you’ll get, and get answers in writing.
A vehicle history report is not a substitute for an independent vehicle inspection. A vehicle history report may list accidents and flood damage, but typically it will not list mechanical problems. That’s why it’s always a good idea to pay for an independent mechanic to conduct a mechanical inspection of a used car. A mechanical inspection is a good idea even if the car has been “certified” and inspected by the dealer, and is being sold with a warranty or service contract. You’ll have to pay the inspection fee, but it can help you avoid paying for a car with major problems.
A mechanical inspection is different from a safety inspection. Safety inspections usually only focus on things that make a car unsafe to drive.
If the dealer won’t let you take the car off the lot, maybe because of insurance restrictions, you may be able to find a mobile inspection service that will go to the dealer. If that’s not an option, ask the dealer to bring the car for inspection at a facility you choose. If a dealer won’t allow an independent inspection, consider going to another dealer.
Ask the mechanic for a written report with a cost estimate for all necessary repairs. Be sure the report includes the car’s make, model, and VIN. If you decide to buy from the dealer after seeing the inspection’s results, you can use the estimated repair costs to negotiate the price of the car.
When it comes to paying for a car, you have two choices: pay in full or finance over time.
Financing increases the total cost of the car because you’re also paying for the cost of credit, including interest. Consider how much you can pay as a down payment, the monthly payment, the financing period (such as 60 months), and the annual percentage rate (APR).
Low monthly payment offers may be tempting but often have longer loan periods and higher interest rates, which means they’re much more expensive overall. So make sure you know the total cost with financing — not just the monthly payment amount.
Dealers and other places that offer financing — like banks, credit unions, and finance companies — offer a variety of financing terms. Shop around, compare offers, and negotiate the best deal you can.
If you decide to finance the car, make sure you understand the financing agreement before you sign any documents.
Before you buy from a dealer, ask about the dealer’s return policy, get it in writing, and read it carefully.
The Buyers Guide must show any changes you negotiate in the warranty coverage. It will override anything in your sales contract. So as you negotiate, be sure the dealer makes any changes to the Buyers Guide, as well as in your contract. For example, if the Buyers Guide says the car comes with a warranty and the contract says the car is sold “as is,” the dealer must give you the warranty described in the Guide.
There are several types of warranties. It’s important to know their differences.
As Is - No Dealer Warranty means the dealer won’t pay for any problems or needed repairs. You’re assuming the risk of anything that goes wrong after the sale. There are several things to know about “as is” sales:
Implied Warranties are unspoken, unwritten promises from a dealer to the buyer. If a used car doesn’t come with a written warranty, it’s still covered by implied warranties — unless it’s an "as is” sale. Here are some common implied warranties:
If you have problems that aren’t covered by a written warranty, see if there’s protection from one of these implied warranties. Implied warranty coverage can last as long as four years, although the length of the coverage varies from state to state. A lawyer or a state consumer protection office can tell you more about implied warranty coverage in your state.
Full and Limited Warranties
Dealers may offer a full or limited warranty on all or some of a car’s systems or components. Most used car warranties are limited and their coverage varies.
If you have a full warranty, it will include these terms and conditions:
If any of these statements doesn’t apply, the warranty is limited.
A full or limited warranty doesn’t have to cover the entire car. The dealer may specify that only certain systems are covered.
Warranty Documents
If you buy a car that comes with a warranty, make sure you get a copy. Review it carefully and know what’s covered. The warranty gives detailed information, like how to get repairs for a covered system or part. It also says who’s responsible for fulfilling the terms of the warranty.
Unexpired Manufacturer's Warranties
If the manufacturer’s warranty still is in effect, the dealer may note that in the “systems covered/duration” section of the Buyers Guide. To make sure you can take advantage of the coverage, ask the dealer for the car’s warranty documents. Verify the information (what’s covered, expiration date/miles, and necessary paperwork) by calling the dealership. Make sure you have the VIN when you call.
A service contract is a promise to perform (or pay for) certain repairs or services. Sometimes called an “extended warranty,” a service contract is not a warranty. You can buy a service contract anytime. They’re sold by car manufacturers and dealers, and independent companies. Prices and coverage vary widely.
To decide if you need a service contract, consider these questions:
If you buy a service contract from the dealer within 90 days of buying a used car, the dealer can’t remove implied warranties on the systems covered in the contract. For example, if you buy a car “as is,” the car normally is not covered by implied warranties. But if you buy a service contract covering the engine, you automatically get implied warranties on the engine. These warranties may give you protection beyond the scope of the service contract. Make sure you get written confirmation that your service contract is in effect.
If you have a problem that you think is covered by a warranty or service contract, follow the warranty or contract instructions to get service. If a dispute arises, and you can’t work it out with the dealer, you still have some options:
Learn more about buying and owning a car at ftc.gov/cars.