My Used Car Buying Guide

One thing people frequently ask me about is advice on buying a used car. I would like to think it is in part because I know a lot about vehicles and also it doesn't hurt that I have bought good used vehicles. Below is what I do when buying a vehicle and what I look at.

1. Don't plan on buying a specific vehicle and then try to find one that you can afford instead figure out what you want to spend and then find the best vehicle that meets your needs in that price range. This opens up a larger selection of vehicles and when you get it narrowed down to a few you like then you can pick the one you want based off of model or type. Almost always I have a few choices and personally I have a preference for BMWs so once narrowed down to a few choices I tend to pick those.
2. Have realistic expectations for your price range. The general rules I follow for what to expect from a vehicle are:
1. $500 or less - If it moves under it's own power it is a good deal
2. $500-$1,000 - Decent engine, decent transmission (still not great) but expect a lot of other issues some may be major
3. $1,000-5,000 - Good engine and transmission, expect a number of minor issues but there shouldn't be any major issues
4. 5,000-10,000 - There should only be minor issues, no major ones. Mileage should be around the average of 12,000 per year. Reasonably new vehicle.
5. More than $10,000 - It should run great, no major issues, few if any minor issues, mileage should be around the average of 12,000 per year.  Reasonably new vehicle.
3. Find out what you need. Too many times to I see people buy cars they don't like because they thought they wanted/needed something else. If you just need to transport people and have never driven a truck or SUV then don't buy a SUV to haul people around because you probably won't like how it drives (this happened to my sister). 
4. See what is available. Go get a news paper or better yet go online and use sites like carsoup.com, cars.com, autotrader.com, or any number of other vehicle sites. Select the style of vehicle you are interested in, set your price range (be reasonable), and set your search area. Now you have a list of potential vehicles so start deciding what ones might be worth going to see.
5. Determining the actual cost of a vehicle. Private sellers have a tendency to either undervalue or over value their vehicles while dealerships will generally be more correct. Good sources for info on this would be sites like kbb.com or nadaguides.com as these can give you a ballpark idea of what a vehicle should cost. Remember just because someone else paid too much or threw too much money into a vehicle doesn't mean you have to. Why should you care what they paid or how much they spent on fixing it.
6. You should now have narrowed down the vehicles to a few that would be worth going to see and drive. The inspection and test drive are probably the greatest indicators of quality. I check the following:
1. The dipstick - It shouldn't be varnished or covered in soot, also the oil level should be correct
2. The oil - If they haven't just changed it it shouldn't smell burned and defiantly should never have metal shavings in it
3. The coolant - shouldn't have any oil film on top, if you have a coolant gravity tester check the quality
4. Check the fuel filter - If it looks cleaner than the rest of parts around it it has been changed
5. squeeze the hoses - they should be somewhat firm and shouldn't show surface cracks
6. Check the automatic transmission fluid - It should be at the proper level and bright red and shouldn't smell burned
7. drive the car - Take it out on the highway and when going down the on ramp run it through its paces hard. Problems will show up first at the extremes any noises, misses, hesitation or other abnormal things are an indicator of problems as are long or incompetent shifts in an automatic transmission. 
8. take it into a parking lot and do a couple of tight circles listen for creaks, squeals, grinding noises, or clunks.
9. Check the power steering fluid - If it uses regular power steering fluid it should be clear, if it uses ATF it should be bright red
10. On a manual see that it shifts smoothly and that the clutch holds when accelerating hard
11. Make sure that the car drives straight.
12. when going over bumps listen for clunks or other noise from the suspension.
13. make sure that all 4 tires match
14. check for even tread wear
15. Find out common problems on the vehicle you are looking to buy and check for those as well
16. Check in the wheel wells and door seams for signs of rust
17. If you are really motivated and buying form a dealership see if you can get them to put the car up on the lift and check it out. I have only managed to get one dealership to do this and that was the one where I bought my current BMW from. Here you can check a lot of the suspension and drive train stuff like axles, suspension, wheel bearings, tie rods, drive shaft, and a bunch of other stuff 
18. Turn the steering wheel to see if there is excessive play in the suspension, then turn it to the extremes to make sure that the power steering pump isn't making tons of noise. It will make some but shouldn't get really loud
19. If you don't want to do this get a mechanic you know to check it out, there is a charge for this but it will give you piece of mind.
7. Never buy the vehicle the day you first look at it. Go home find out specific things to look at more closely, and common problems. Sleep on it and then go checkout the vehicle again and take it for another test drive. If you still like it then buy it, otherwise walk away.

I have used this method for every vehicle I have ever owned and haven't been let down, even with the beater vehicles I have bought that were well under $500.