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The 5 things you need to know when used-car shopping

A little knowledge and planning can help you get the car you want

Finding a used car starts simply. You figure out your budget, what sort of car you want (sedan, SUV, etc.), maybe even narrow it down to two or three makes and models.

(When I did this at 16, my must-have list was shameful: I just wanted a sunroof. And then got majorly side-tracked by a digital speedometer in a Buick Reatta.)

So, now what?

These five considerations will guide you from that vision toward the reality of a new (to you) car.

  1. Private seller vs. dealership—You can go to a dealership to buy a used car—where someone does the heavy-lifting for you, and you can complete all the purchase paperwork the same day.At a dealership, there are three things you can negotiate: what you pay for your car, what the dealership pays for the car you trade in, and the interest rate on the loan. So bring quotes from other dealerships (you can use Progressive’s Car Shopping Service to do this), calculate the trade-in value of the car you have on your own, and be sure to read tip 4 below.Your other option is to buy a used car from a private seller (through eBay, AutoTrader.com, a forum, etc.). This requires a little more know-how and effort. But, done carefully, it could get you bigger savings on your car. That’s because private sellers might have more room to come down on price.
  2. Mint condition vs. a minor accident history— Just because a car has a few marks on its record doesn’t mean you should nix it from your list. Just look out for any significant issues. Two things help you understand the “health” of your used car:
    1. A vehicle history report is exactly what it sounds like—you’ll see if your car has been in any accidents, and how extensive they were.
    2. Service history helps you understand how well a car was maintained…oil changes, tire rotations—all of those things that keep a vehicle running smoothly.
  3. Certified pre-owned vs. used—Buying a certified pre-owned vehicle can give you some extra peace-of-mind, because it means you’re getting a used car that comes with a dealer’s vote of confidence and a warranty.Otherwise, you’ll want to schedule an inspection yourself—in addition to giving the car a once-over. (And when you do this visual check, make sure it’s daytime and clear.)Also, look at the tires—and if they’re worn, account for that in one of two ways: negotiate a lower purchase price, or budget for new ones.
  4. Dealership loan vs. bank loanInterest rates are one of the areas in which dealerships can turn a profit, and interest rates for used car loans tend to be higher than new car loans. So, this is an ideal time to shop around. If you buy from a dealership, secure a loan or two in advance, and bring those with you.
  5. First owner vs. second ownerHaving multiple owners lowers a used car’s value. So before you become the second (or third, or fourth) owner, you may want to check the resale value.

BONUS! A few additional tips

  • Consider the model year—the same model that’s had glowing reviews the past couple of years may have had issues in years prior.
  • Call Progressive or your agent to get an insurance quote with the cars you’re considering—some makes and models are more expensive to insure than others.
  • If you’re looking for something really specific, tell a dealership. Some will look for it when they buy used cars for their inventory.
  • Go to PerkShare® to access Progressive’s Car Shopping Service (you can shop pre-negotiated rates), and get discounts on vehicle history reports and car maintenance.
  • Ask for two sets of keys right away. (It can be an expensive thing to get later.)
  • And, think about whether it makes sense to extend or supplement whatever warranty the car has with a mechanical repair plan. This helps you prepare for the unexpected.

Now you know your stuff—and what you don’t know, you’ll figure out as you go. So go in, be confident and enjoy the ride (pun intended). And if you find a nice Buick Reatta, maybe with a sunroof, think of me.