Used Car Checklist (The Genius Way To Buy and Inspect a Vehicle)

Buying a used car can be stressful. You don’t want to get stuck with a lemon that, more often than not, ends up costing you more than the vehicle’s price tag.

So how can you avoid this?

By using our Used Car Checklist of course! Click here to download (it’s free!).

At DriveTime, we complete a multi-point inspection process* to flag any potential issues before our vehicles ever hit our dealerships. But what if you are buying a used car from an individual seller or another dealership that doesn’t have our same inspection process? How can you be sure you are getting a good car at a good price?

We created this used car checklist to help you make the right decision if you find yourself in this situation.

Let’s dive in!

1. Do Your Vehicle Research

Once you are in the market for a used car, the first thing you’ll want to do is research the following:

• Year
• Make
• Model
• Trim

Here are a few things to keep in mind while doing your research.

What Is Your Price Range?

Before you begin your research, determine the price range you want to stay within. There’s no point spending hours looking into the Audi R8, if you have a maximum budget of $20,000.

If you are going to finance the vehicle, the 20% rule is a good rule-of-thumb. Do not spend more than 20% of your take-home pay on automotive related expenses. This includes car insurance, gasoline, registration fees, maintenance, and repairs.

What Features Do You Want?

Everyone is different when it comes to a car’s features. If you live in California, that sun-roof is probably a necessity. If you live in the Colorado mountains, all-wheel drive is likely a requirement.

Make sure you know what years, makes, models, and trims have the features you want. When you begin doing research, make sure you’re only looking into vehicles that meet your feature requirements.

Safety Rating?

You should do your best to prevent car accidents, but you can't always control the actions of other driver. The next best thing is to ensure you are in a safe automobile. All modern cars are rated by the National Highway Traffic Safety Administration (NHTSA), 5 stars being the safest.

Generally, the newer the car, the better the safety features are. Here are some of the safest cars on the market in 2018 according to the Insurance Institute for Highway Safety:

• 2018 Hyundai Elantra
• 2018 Kia Forte
• 2018 Kia Soul
• 2018 Subaru Impreza
• 2018 Subaru WRX
• 2018 Hyundai Sonata
• 2018 Kia Optima
• 2018 Subaru Legacy
• 2018 Subaru Outback
• 2018 Toyota Camry
• 2018 BMW 5 Series
• 2018 Genesis G80
• 2018 Genesis G90
• 2018 Lincoln Continental
• 2018 Mercedes-Benz E-Class
• 2018 Hyundai Santa Fe
• 2018 Hyundai Santa Fe Sport
• 2018 Mercedes-Benz GLC

To see what makes these the safest cars according to the Insurance Institute for Highway Safety, click this link.

Fuel Economy

Remember the 20% rule from above? If you live in a state with high gas prices, this can be a serious expense. You can counter this expense with a vehicle that has good fuel economy. Check out the most fuel-efficient cars according to Consumer Reports.

2. Know a Good Deal When You See One

Used cars can vary considerably in price. Some dealers will put a very high list price on their cars but are open to negotiation. So it’s important to know how much a car is worth. After all, you don’t just want your dream car, you want it at your dream price.

How do you find the market value of a used car?

Your first stop should always be something like the Kelly Blue Book pricing tool. KBB’s Fair Market Range and Fair Purchase Price are calculated utilizing a large amount of data and are considered the industry standard for pricing.

One of the main components of Kelly Blue Book’s pricing is the vehicles sales price at auctions and from dealers. Here are some of the main drivers of pricing:

• Make and Model
• Year
• Type (e.g. Sedan, Wagon, etc.)
• Mileage
• Engine size
• Safety options such as airbags
• Comfort options such as a/c and power windows
• In-car entertainment
• Wheels and tires
• Color

At DriveTime, we list the Kelly Blue Book Fair Market Range on our website, so you know the market value before you buy from us.

Don’t Just Look at Sales Price

Now that you know the market value of the vehicles you are interested in buying, you know what a fair sales price looks like. Although sales price is a strong leading indicator of a good deal, there are a few other factors that can impact what you end up paying. These include:

• Term of payment (how many installments you pay)
• Interest rate
• Sales tax
• Dealer fees
• Registration fees
• Down payment

So while the list price may be $8,000, with financing, sales tax, and fees, you will undoubtedly end up paying more.

At DriveTime, we are transparent when it comes to our pricing and financing. We are a no-haggle dealership and you can even get your down payment online!

3. Know How Financing Works

Once you find a vehicle with a fair market value that is within your budget, the next step is to work out your financing options.

Before you head to the dealer, make sure you understand the basics of how financing works. Check out the video below on simple interest loans to start your education!

https://www.youtube.com/watch?v=dYgghGEvj88

So what impacts your financing?

The terms of your deal are dependent on a number of factors, but your credit score is a major driver of the terms of your financing. At most dealers, the better your FICO score is, the better terms you’ll receive on your loan.

At DriveTime, we have our own proprietary credit scoring model that takes hundreds of data points into consideration. That means we look at more than just your FICO score to approve you for financing.

Pre-Approved Loans

Before you go to the dealer, be sure to go through the pre-approval process. The main reason for doing this is to provide yourself with options. Preapproval means you already have some idea what your financing should look like before you start negotiating with a dealer.

Once you are at the dealership, if the dealer wants you to finance through them, they need to provide you with better terms on the deal you already have.

Be prepared. Some dealers may treat you different if you do not finance through them.

At DriveTime, we make sure every customer receives top-notch customer service, no matter who they choose to finance through.

Pay More. Pay Often. Save.

Now that you know how financing and simple interest loans work, you know that the more money you put down and the larger your payments, the less you will end up paying overtime if everything else is equal.

If you have extra money at the end of the month, use it to pay your loan! This will save you in the long-run.

4. Will Your Car Insurance Rate Increase?

Don’t forget about auto insurance costs when upgrading your vehicle. More likely than not, your rate will end up changing. There are a number of factors that affect your car insurance rate and each insurance company has their own algorithm for determining your rate.

You best bet is to get quotes from multiple insurance carriers or contact a local independent insurance agency who can get you quotes from a variety of carriers. Even though shopping for auto insurance can be a hassle, it’s a necessary evil.

5. Looks For A Vehicle History Report

You should never buy a used car without a vehicle history report. These reports can save you big in the long term by revealing any previous problems the car has had. Every car we sell at DriveTime comes with an AutoCheck history report.

Different History Reports

Two of the largest vehicle history report providers are CarFax and AutoCheck.

AutoCheck is much better at tracking cars that have been through auction and also offers reports based upon the VIN (Vehicle Identification Number). CarFax offers better mileage verification and owner information.

If you’re interested in learning more about the differences between CarFax and AutoCheck, you can find out more in DriveTime’s in-depth comparison.

Branded Titles

Branded titles are given to cars when they have been declared a total loss by an insurance company and salvaged because of an accident, flood damage or something else.

Otherwise known as salvage titles, these cars can have serious problems. It’s best to avoid them. A vehicle history report will call out a branded title, so it’s we recommend that you only buy vehicles with a vehicle history report present.

6. Perform An External Walk Around

Now that you have some idea what type of car you want and you’ve got financing figured out, it’s time to take a closer look at the vehicle itself. Here are some of the more important things to be aware of:

Tires

Do they have even wear? Do they have a quarter inch of tread left? Use the penny test. Are all four the same brand and tire?

Undercarriage

Is there any damage underneath the car? Is there any rust underneath the car?

Doors and Openings

Do all the doors work as intended? Do they creak or are they stiff? Does the trunk open smoothly? Does the hood open smoothly? Is the gas cap in good condition?

Glass

Are there any cracks in the windshield? Any dents or marks?

If you find something you don’t like the look of, don’t write the car off immediately. Instead, investigate further. A tiny chip on the windshield can be easily filled, while a single speck of rust isn’t necessarily a sign of major issues.

If you are unsure of the condition of a vehicle, have a mechanic take a look at it.

You really just want to watch out for major damage and rust.

7. Be Sure To Look Under the Hood

Not everyone is a mechanic. Luckily, you don’t have to have an engineering background to identify major issues.

Oil

Check the oil of the vehicle you are inspecting.

• Locate the dipstick under your hood (usually a brightly colored stick with a handle)
• Pull it out, wipe it clean, and put it back in the hole you pulled it from
• Pull it out again and check the oil level on the stick.
• Check the oil color. If it is light, you’re good to go. If it is dark and thick, the car needs an oil change.

Coolant and Radiator

One common problem, especially in older cars is coolant leaks. The rubber can split with age, causing the engine to overheat in the summer and your heating to fail in the winter.

Here is a guide on how to check for coolant leaks.

8. Perform An Interior Inspection

The interior of the vehicle is where you spend most of your time, so it’s important that it meets your standards.

Are there any lingering smells? Are the seats in good condition? Are there any rips or scratches? It’s up to you to determine what is acceptable and what isn’t. Be aware of any moldy smells. This means water damage and is something you should stay away from.

Next, check to make sure all the features work. This means checking the:

• Radio
• Heating and Cooling
• Central locking
• Entertainment system
• GPS
• Sunroof and electric windows

Again, it’s up to you determine what is acceptable and what is not. Try to get a quote on how much fixing any interior damages would be and then try to negotiate the price down by this amount if you are still interested in the vehicle.

9. Start The Car and Leave It Running

Time to start the car!

It helps to bring a friend or family member with you when inspecting a car. Have your purchasing partner start the vehicle and begin testing the lights and blinkers. You should be outside the vehicle making sure they all are functioning properly.

Next, check the engine for any sounds or smells that are out of the ordinary. Leave the car running while you look around, which will give you more time to check it over.

10. Take The Vehicle Out For Test Drive

If the vehicle passes your inspection up to this point, it’s time to give it a test drive. Here are the things to be aware of:

• One of the most important things you should test is the vehicles brakes. Here’s how to do it.
• Take the car to a highway to drive at freeway speeds. Feel how the car handles high speeds and get a feel for the acceleration.
• If it’s a stick shift, get to grips with the stick and make sure it doesn’t jam at any points.
• If the car has cruise control, make sure the feature functions properly.
• Make sure the A/C and heater works.
• Does the car pull to one side? If so, there is likely an issue with the alignment. Alignment issues can lead to uneven tire ware.
• Does the horn work?
• Do you like the visibility you have from the driver’s seat to the road around you?

11. Perform A Post-Test Drive Inspection

After your test drive, inspect everything you previously inspected one last time. Oil leaks, odors, and smoke from the engine may only show up after a drive. Other things to look out for are:

• Oil and coolant leaks - they may not show up before a drive.
• Is the engine running smoothly? Any rattles or clattering?
• Are there any smells? Get your nose right under the hood.
• Check the exhaust. Is there any smoke or smells?
• Check under the car again for leaks.

12. Request and Review Service Records

Some cars may look and feel great but hidden problems could still be present. A service record allows you to check what work has previously been done on the car and root out any hidden complications.

It’s not a good feeling if you need to change the tires, oil and battery right after purchase. A complete service record will allow you to estimate how long the oil, battery, tires and so on will last.

13. Red Flags

Here are some instant red flags that should automatically stop you from purchasing a vehicle, no matter how good a deal it seems.

• Rust: A spot or two of rust on an otherwise impeccable car is no problem. But rusted out bodywork is a sure sign that the car has not been cared for and may have problems down the road. Be especially careful of rust on the frame.
• Bad Smells in the Interior: If the car smells really bad, it could be a sign of something worse than just bad odor. One possibility is water damage, which can cause the carpets and seats to stink. Water damage can severely impact a car in a negative way so it’s best to avoid.
• The Seller Won’t Let a Mechanic See the Car: One tip is to bring in a mechanic to check over a used car before you buy. But if the dealer won’t let you, that’s a very bad sign. We recommend you leave the dealership immediately if this happens.
• Prices That Are Suspiciously Low: Use the KBB price guide. If a car is considerably cheaper than it should be, there is probably something drastically wrong with it. If it’s too good to be true, it probably isn’t.
• Missing Title: A missing title is a deal breaker. A bad title could mean you don’t technically legally own the car. Never buy a car with a missing title.
• Recalls: One last thing to be aware of is any potential recall on the car. Sometimes faults are discovered in cars after they have already been sold and the manufacturer will recall it for safety reasons.

To check for recalls on the vehicle you are inspecting, you can use this tool.

14. Buy From a Reputable Dealer

Your dream car can turn up anywhere. But buying from a reputable dealer can give you more peace of mind that you made the right purchasing decision. Generally, a reputable dealer will do a much better job at inspecting the car, making sure everything works well and is in good condition.

At DriveTime, we go through a rigorous 600+ point inspection process to make sure our cars meet a certain quality standard.

If you are considering buying from and individual seller or less known dealership, it’s worth getting the vehicle looked over by a mechanic before finalizing the deal.

Now You Are A Used Car Inspecting Genius!

There can be a lot of potential pitfalls when buying a used car. But avoiding them is easier than you think – especially with the help of this handy dandy checklist! Remember to do your research first, be aware of what can go wrong, and use a reputable dealer whenever possible.

Always go on a test drive and check the history of the vehicle. If in any doubt whatsoever, consult a mechanic. A few hundred dollars in mechanic fees is nothing compared to the cost of a faulty vehicle.

One final thought: it’s your sales representative or dealer’s job to ensure that you get a great car for a great price. So ask them questions. Dealers know what they’re talking about, and are there to help you find a car that fits you and your needs.

*DriveTime is not able to make safety recall repairs, so vehicles may be subject to open recalls. Visit http://www.safercar.gov/ for more information about recalls. DriveTime also gives buyers a safecar.gov report for their car.