Buying a Used Car 101 - What You Need to Know Before Spending

Buying a used car is a great way to save money, especially when compared to new car sticker prices that come stacked with import fees, dealership taxes and shipping.

However, the venture of purchasing a used car can also come with a few consumer risks. If you're thinking about bringing home a used car, keep reading for 5 great tips that will teach you what you need to know to help save money and avoid being ripped off.

1. Research the Vehicle You Want

Before you step on a used car lot or start surfing through your local classifieds, have a clear idea of the type of vehicle you're looking for. Even if you can narrow it down to two or three choices, you'll be able to easily pinpoint your search.

When researching a used car, try checking consumer report reviews and online customer reviews to find a vehicle that not only meets your needs, but has a history of standing up as a reliable, fuel-efficient, and safe vehicle.

Thanks to their reliability and durability, popular used car makes include Toyotas, Hondas, Subarus and Volvos. You can also check a car's fuel efficiency by visiting fueleconomy.com, a U.S. government website that lets you compare cars by fuel consumption.

2. To Dealer or Not to Dealer

While private sales often offer lower prices, you may find the benefits of warranties and direct financing available at local dealerships. If you're buying privately or without a warranty, always have the car inspected by a third-party, independent and certified mechanic.

An additional benefit of working through a reputable dealer is the potential time savings and avoided hassles from not needing to call individual owners who sometimes aren't familiar with their own car, plus the often lengthy drive to their home simply to view it.

3. Get a Car History Report

Whether you do a title search or obtain a car history report from a service like CARFAX, these options let you see the car's sales history including odometer registrations and even major accidents or incidents where the vehicle has been in a flood.

4. Always Test Drive

If the car is road-worthy and safe, always take it for a test drive. You'll get a feel for the vehicle, but also be able to notice any peculiar sounds or feelings. Pay attention to the brakes, the exhaust sounds, the overall functionality of the vehicle, and make sure the transmission smoothly shifts into all gears, including overdrive.

When buying privately, also look at how well the car has been maintained, both aesthetically and mechanically. Ask to see any and all maintenance receipts, and pay close attention to how well the car has been treated by its previous owners. If the owner does not have maintenance records, this should raise a yellow flag in your mind about purchasing the vehicle.

5. Know the Blue Book Value

Before you buy any used car, always check its Blue Book value. You can do this right on the Kelley Blue Book site at http://kbb.com. By knowing the car's base and resale value, you will be more aware of price points and better prepared to negotiate once you've determined your interest level in the vehicle.