How to buy a car - Part 1: Used Cars

This is just my opinion, there are always exceptions to the rule, but I wanted to put my thoughts down on paper.......

Part 1 - USED CARS:

First - always look to buy a used car (from an individual) before buying new. This is the proven method for saving thousands of dollars. I am a big fan of AutoTrader.com, as it requires someone to be vested in selling their car ($50+ listing fee), unlike Craigslist where people can post without the real intention of selling. Check listings with a wide radius - checking prices from individuals across the nation gives you a good picture of what you should pay, and will help you negotiate.

Avoid CarMax - they charge a straight mark-up over the retail price of their cars. Avoid Used Car Dealers (i.e. Jim's Auto Discounters, or the used car lot at the local Chevy dealer) - questionable vehicle histories + markups = bad deals. If you choose either of these routes, you might as well buy a new car (there's some fun math here, but it's boring). Dealers selling used cars are trying to make a profit, individual sellers are trying to cut their losses.

Whatever route you take, check the car's retail value at Edmunds.com before making the purchase. If you are nervous about the seller, get a CarFax report with the car's history.

Be careful with the "engine only has 15K miles, car has 180K" statements - a new engine in an old car still equals an old car. Exceptions here are classic cars, like dropping an LS7 crate into a Nova.

Check for any serious recalls or Technical Service Bulletins (TSBs) on that model/year, and make sure the car is up-to-date. This could also be an indication of future problems...

That being said, there are times that a new car makes sense:

1) You need to finance the purchase - most credit unions have higher rates and stricter qualifications regarding financing a used car, so a new car might have the same end-cost given a lower finance rate.

2) A significant body style or feature change has just occurred, and no used models are available.

3) You take immaculate care of your vehicles and the mere thought of someone letting the car go over 3K without an oil change gives you a sick feeling in your stomach.

Buying new cars is where things get fun - I'll elaborate in Part 2....