How to choose the right used car

Used car or new

By purchasing a used car, you can save a lot of money. A new car depreciates quickly in the first few years and after 3 years, it is worth only about 60-70% of the original price. In fact, as soon as you leave the dealership, your new vehicle is suddenly worth $1000-$2000 less. It’s true in general, a new car requires less maintenance in first few years and most of the problems occurred within the original warranty coverage period will be covered by the car manufacturer. Yet, buying a new car does not always mean the buyer will get perfection. A new car may come with problems associated with poor design or manufacturing defects that may have been already repaired during the warranty coverage period if it's a used car. The same is true for all kinds of recalls and service campaigns.
Buying a used car is still a bit of a gamble - there is no guarantee that the car is accident-free, has real mileage, and was properly maintained. There may be some hidden problems like a worn out automatic transmission, or engine problems that may not have been obvious when you test-drove the car. Maintenance costs are higher for a used car and manufacturer's warranty may be already expired. However, used cars are more reliable these days and there are number of ways to reduce the risks associated with used car buying. For example, you can check the used car history records and have a used car properly inspected by a knowledgeable person prior purchase. If the car qualifies, you can buy an extended warranty to protect yourself from unexpected repair costs. You also can opt for a manufacturer-certified used vehicle - many manufacturers now offer late model used cars under Certified Pre-owned programs where they inspect and recondition qualified used cars and often provide an additional warranty coverage with them. Check our used car buying guide for more tips.

Safety

There is no perfectly safe car, but certain models can protect you better in case of a crash.
Some vehicles offer features that may help you to avoid an accident in the first place. You can compare crash test ratings and find other car safety related information online at:

NHTSA - National Highway Traffic Safety Administration website where you can find automobile safety information, auto crash testing, statistics, recalls and more.

SaferCar.gov - crash-test and rollover ratings for specific models by NHTSA

IIHS - the Insurance Institute for Highway Safety website where you can compare frontal offset and side impact crash test results as well as Injury, Collision & Theft Losses and Fatality rates for different cars.

Reliability

Reliability is one of the most important factors to consider if you decided to go for a used car. Not all cars are the same. Some models are proven to be very reliable, others are known for constant problems. Since it is a used car, the original warranty coverage is probably over and you want the model that is more reliable. There is a number of resources where you can check reliability ratings of certain models:

MSN Autos - follow the link "Used cars".

J.D. Power and Associates - they offer new and used car ratings.

Consumer Reports - provides excellent data (paid subscription required)

However, be aware, even most reliable model car won't last long if not maintained properly.

Fuel economy

With unpredictable gas prices, choosing the more fuel-efficient vehicle will help you to save money at the pump. Do you know that the difference in annual fuel costs between two different vehicles could be as high as $1500 - $2000?
Economical cars pollute less, which is good for the environment. By choosing the more economical vehicle you are helping to fight global warming.
In addition, in some localities, there might be tax incentives for fuel-efficient cars, and penalties for gas guzzlers; you may want to check if any of these will apply in your state or province.
Here is the list of our Top ten used cars/SUVs with good gas mileage.
You can compare fuel economy and pollution ratings of different cars following links below:

For US: Fuel Economy

For Canada: The Office of Energy Efficiency.

Cost of insurance

The cost of insurance varies a lot depending on the make, year, model and even the color of the car, as well as driver's experience and many other factors. I definitely recommended to get insurance quotes before buying a car.
Follow the link Online Auto insurance quotes.

Make or model

I'm often asked what make or model I'd recommend? I don't think there is a certain make or model that is just perfect for everyone. It really depends on what exactly you expecting from your next vehicle and how much money you want to spend. For example, if want a simple inexpensive used car that will be reliable and cheap on gas - check used Toyota Corolla or Honda Civic.
Looking for a luxury interior and smooth ride and ready to pay more for it? - have a look at new Mercedes-Benz or BMW.
Need a new minivan that is comfortable and won't cost a lot? - check Dodge Caravan.
Want something cheap on gas and spacious, but not a minivan? - Pontiac Vibe is an excellent choice; and so on.
In general terms, such as reliability, fuel economy, quality and maintenance costs, I'd highlight such models as Toyota Corolla, Honda Civic, Honda Accord, Toyota Camry, Honda Odyssey, Honda CR-V, Toyota RAV4 and Toyota Highlander.
There is an excellent decision-making tool at MSN Autos. Follow the link "My Research" where you can pick few different models and compare their ratings for reliability, fuel consumption, price, etc. (registration required).

Automatic or manual transmission

Cars with manual transmission are cheaper. They are more powerful and more economical. A manual transmission is also more reliable than an automatic. Experienced drivers of manual transmissions will tell you they like how it allows the driver to feel "closer" to the car. It's just more fun! However, it is more work to drive such a car, and can be especially difficult for the beginner. But don't be scared. You can learn how to drive such a car in just a few days. It's not as difficult as it seems.
It is much easier to drive cars with automatic transmission. Automatic transmission is more convenient in a city, in traffic jams, etc. But it involves a more complicated device and breaks more often. The repair of an automatic transmission is complicated and tends to be quite expensive. Regarding fuel efficiency, a car with an automatic transmission consumes an average of 1.3 times more fuel than the same kind of car with a manual transmission. When you buy a used car, the automatic transmission is the one of the most important parts to check - How to check a transmission

Considering a car with Diesel engine

Cars with a diesel engine consume almost half as much fuel as the same car with a gasoline engine. However, there is a price to pay: Diesel engines are a bit noisier and there always will be that not very pleasant smell from the exhaust. Some Diesel engine vehicles require only synthetic oil which means higher maintenance cost. There are only few passenger cars with Diesel engine currently available in North America: Volkswagen and Mercedes-Benz. However, with constantly improving Diesel technology and growing fuel prices more cars may come.

Four-cylinder or six

Four-cylinder engines usually provide better fuel economy, but V6 and V8 engines generally have more power and little more durability. The V6 (or V8) engine will be a good choice if you want to use your car for towing a trailer. For normal city driving, a four-cylinder engine will do the job.

Do I need the ABS?

The four-wheel ABS or Anti-lock Braking System is designed to help the driver maintain steering control during hard braking, especially in slippery conditions. How it works: Imagine, you are driving a car without ABS on a slippery road (e.g. after a rain or snow). Suddenly, you notice something on the road right in front of you. You hit the brakes, and try to turn aside, but the steering doesn't work; the car just skids out of control. Why, because all the wheels are locked up while you're holding down the brake pedal. As a result, you lose the ability to steer the vehicle.

Braking on the snow without ABS

The four-wheel ABS can help in situations like this. It prevents the wheels from locking up, helping you maintain steering control during braking. In a similar situation, driving a car equipped with four-wheel ABS, it would be easier for you to steer your vehicle while braking.
If slippery road conditions are common in your area, the ABS may be helpful if you use it correctly. The disadvantage is that the ABS is quite complicated device and might be costly to repair.
Essential to know:
- The four-wheel ABS system can help to slightly reduce the braking distance in some situations. However, under certain conditions (e.g. on loose snow or gravel), the braking distance may be longer. The main purpose of four-wheel ABS is to help the driver maintain steering ability during hard braking.

Is it worth to buy a car 'as is'?

I wouldn't advice to buy such a car even if the price seems to be very cheap and here is why:
Usually used car like this needs a lot more repairs than it may seem at the first look. Just a fresh example:
A friend of mine bought twelve years old Honda 'as is. It was drivable, but "minor body repair" was needed. It was very cheap though - only $1200. During the safety test more problems were discovered and he had to spend another $600 for the brakes and suspension. To pass emission cost him $350 more for new catalytic converter and tune-up. Body repair added $500 on the top. And after one week of driving another problem came up - no compression in one of the cylinder. Another $700 flew away. Finally the total cost came to almost $4000 (plus new audio system, battery, etc.) and no one knows what and when will be broken next because usually once the car starts having problems, it never ends.
For this money, he could buy much better car in perfect condition certified and emission tested with no hassles and headaches. As a conclusion I'd suggest you to look not for the cheapest car available, but for a decent vehicle for reasonable price.