This is Part 1 in a series of used car buying tips.

Do your research. This can be time consuming, and boring, but it can also save you loads of time (and trouble) down the road. Here’s some tips I found helpful in my recent used car purchase:

1. Edmunds is a good resource for true market value, pricing, unbiased consumer and expert reviews, and expert advise on how to get a fair deal. The consumer reviews were particularly helpful for me. I had scheduled a test drive for a particular year and model of a vehicle and after reading consumer reviews on Edmunds, I learned very quickly this model and year had serious electrical problems. I canceled my appointment and saved both the seller and myself some time.

2. Kelley Blue Book is a good resource for checking the trade-in, retail, and private party value of a particular vehicle, depending on the condition and the amenities of the vehicle. Knowledge is power. Never go look at a car without having a clear idea of the market value.

3. Know how much you can afford. The KBB website has a financing calculator on that lets you enter in the requested loan amount, interest rate, and term of the loan. The calculator will generate an average monthly payment and the total cost of the loan. This may prompt you (as it did me) to consider a 3 or 4 year loan, as opposed to 5+ years. Check out Jeremy’s post (Generation X Finance) on why car loans over five years may be a bad idea.

3. Once you know how much you can afford and have decided on certain makes and models you are interested in, there are other factors to consider. Sports cars usually have higher insurance rates. SUVs are often gas-guzzlers. Certain cars require only premium gas. Other vehicles are notorious for higher maintenance costs. Maybe the price of the vehicle is higher because it is four-wheel drive or all-wheel drive, and you don’t really need this feature. These are all things to consider.

3. Before testdriving a car, be sure to get the VIN# and run a Carfax report. Many dealerships provide these upfront. You often have to have ask private sellers for the VIN though. A Carfax report will tell you how many owners the vehicle has had, any repairs that have been done on the car, whether the car has been in any accidents, has been salvaged, stolen, flooded, or damaged by fire. This detailed vehicle history report is invaluable. Get the VIN# before even looking at the car. I recently looked at several vehicles, one of which seemed too good to be true. The car was beautiful on the outside, seemed to run well, and was well under KBB price. I wanted to drive it off the lot. But after running the Carfax report I found that the car had been “salvaged beyond repair” and was resold at an auction. Thousands of cars were virtually destroyed in Hurricane Katrina and have been rebuilt (on the outside) while water damage corrodes the innards of the vehicle. Carfax reports also tell you how many owners the car previously had. If a dealer or seller refuses to give you the VIN, don’t bother even looking at the vehicle. Huge red flag.

4. Be patient. Reading automobile reviews is not the most engaging reading for most people, but it does pay off. No part of the car-buying process should be rushed, especially the research.

Happy hunting!

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