Last updated: October 2022
Buying a used car, or any new-to-you vehicle, is an exciting time. But it can also feel overwhelming if you don’t know what to look for, how to find the best price, or how to avoid getting scammed. To help prevent you from feeling stressed about this big purchase decision, we’ve put together a used car buying guide to answer your questions and address your concerns about used vehicles and used car insurance.
What to Look for When Buying a Used Car
Wondering what to do before you buy a used vehicle? Allstate has several detailed tips you can read, but here are the basics to help ensure you get a dependable car at a good price.
- Inspect the interior and exterior of the vehicle for damage.
- Take the car for a test drive.
- Check the vehicle’s mileage.
- Look for any fluid leaks.
- Do your research by checking the vehicle’s history, searching the VIN, and finding a fair purchase price.
- Don’t let any sellers rush you.
- Shop for certified pre-owned vehicles to protect yourself from scams.
The Cheapest Cars to Insure
When it comes to car insurance costs, there are a number of factors that influence rates. One of the major factors insurers consider is the year, make, and model of the vehicle you drive. Why? Insurance companies estimate how much a vehicle costs to repair or replace. Also, they carefully consider safety ratings so they know how likely it is for vehicle occupants to get injured in a crash and rack up expensive medical bills.
With manufacturers offering multiple models of the same car and updates occurring every year, it can be hard to keep track of the cheapest cars to insure. However, these styles of vehicle typically have lower rates, according to Car and Driver.
- Smaller SUVs
- Subcompact cars
If you’re concerned about paying a high premium, you should avoid these vehicles.
- Sports cars
- Luxury vehicles
- Electric cars
If you want to know how much a specific car costs to insure, get a free quote for the year, make, and model before buying. The numbers may surprise you! Although there are ways to save money on car insurance (like increasing your deductibles, dropping certain types of coverages, or asking about discounts), you shouldn’t sacrifice safety for the sake of driving your dream car.
If the car you want is a little too costly to insure on your budget, you might be able to purchase a less expensive model. Features like built-in GPS, heated seats, sunroofs, and premium sound systems are great to have, but expensive to fix, which means higher insurance premiums. If you’re shelling out for a new-to-you car, you could save on the sticker price and your insurance premium by forgoing some of these luxuries.
The annual premium for a base model could cost hundreds of dollars less than a high-end model with all the bells and whistles. Car manufacturers bundle these bells and whistles into various trim levels. For instance, trim levels for a Honda Civic start at the base-level L, followed by LE, SE, and XLE, each with more features and a higher sticker price than the last.
Everything About Used Car Insurance
Have questions about used cars and insurance? Here are some major things you need to know before you buy a pre-owned car, truck, or SUV.
Do I need insurance before I buy a used car?
You’re almost certainly going to need an auto insurance policy to buy a car, no matter if the vehicle has never been driven or if it has 250,000 miles on the odometer. Dealerships in most states won’t let you purchase a car without an active auto insurance policy that meets all requirements. Even if you can purchase a car without coverage, you’ll need an insurance policy to register your vehicle with the DMV.
How much does used car insurance cost?
Sadly, there’s no simple answer to this question. As we mentioned above, car insurance rates depend on a variety of factors. Your premium depends on:
- The type of vehicle you drive
- How much you’re driving and your home ZIP code
- The coverages and limits you select
- Your driving history
- Your credit history
- Your demographics
Generally speaking, though, it’s often cheaper to insure a used car that is a few years old than a brand-new vehicle. While excellent anti-theft and safety features can help you secure a lower rate, new and specialized vehicles are often more expensive to repair or replace, which leads to a higher premium. However, if you finance a used car, your lender might require you to carry comprehensive coverage and collision coverage, which could drive your rates up. Or, if you buy a used sports car or luxury vehicle, your rate might be higher than for other used cars.
Before you purchase a pre-owned vehicle, make sure to get a quote to learn how much you can expect to pay for used car insurance.
Red Flags When Buying a Used Car
If you see any of the following when you’re shopping for used cars, it could be a red flag indicating it’s time to move on to another option. However, you should get a professional to inspect the vehicle to be sure. Watch out for:
- Poor paint condition
- Damaged glass
- Light issues
- Unpleasant smells
- Poorly functioning instrument panels
- A/C or heat issues
- A failing sound system
- Exhaust issues
- Visible leaks or drips under the car
- Signs of structural issues under the vehicle, like dents or welding marks
4 Tips to Avoid Car Buying Scams
There are plenty of tips for buying a used car that can make sure you get a good deal and don’t get scammed. Here are four important things to consider.
1. Do your research.
When you’re focused on a specific year, make, and model of vehicle, learn everything you can about it. You want to learn things that only vehicle owners and experts can speak to, which could help you avoid buying a vehicle that is costly to maintain. It could also help you avoid a potential price trap and give you more leverage when it comes time to settle on a price. For instance, say the transmission in the 2015 truck you want tends to fail way before its time. A dealer may offer this truck at a rock-bottom price to get it off the lot, but if you’ve been doing your research, you’ll know to run far, far away from this price trap.
2. Have an expert look at the vehicle.
While a vehicle history report can give you a wealth of information about the car you want to buy, it doesn’t tell you everything you need to know. For example, it won’t tell you about the mechanical condition of the car or whether some parts are worn out or prone to early failure. Popular Mechanics has a comprehensive used-car checklist that can help you understand what to look for in every part of your car, plus the dealbreakers. Also, get a specialist to look at the vehicle to be safe.
3. Don’t get curbstoned.
Instead of only visiting dealerships, some people also shop for vehicles on internet marketplaces. If you’re shopping this way, beware of getting “curbstoned.” This type of scam is named because people perceive a car to be more valuable when it’s being sold by an individual on a residential street instead of a used car lot, according to Road and Track. This doesn’t mean you shouldn’t ever buy a car from an individual on the internet; it just means you need to be cautious. Road and Track notes certain laws might make this vehicle sale illegal, so ask to see the vehicle title and a vehicle history report. Also, inspect the car closely with the tips we shared above so you don’t get scammed.
4. Know that it’s okay to walk away.
It doesn’t matter if the person trying to sell you a used car has spent a lot of time answering your questions. It doesn’t matter if they tell you that they missed out on another sale because they were helping you. It doesn’t matter if they say they’re disappointed. The only thing that matters is that you get the safe, reliable car you want at a price you can handle. If you have any hesitations, it’s okay to walk away. Don’t be pressured into making such a large purchase decision.
The Best Time of the Year to Buy a Used Car
By shopping at the end of the month, quarter, and year, you can generally get better prices, according to U.S. News. At these times, dealerships could be trying to meet sales goals, meaning they’re eager to sell. You can also try shopping during a sales event or the end of a model year. After all, when the new version of the car you want is on the way, the older used models could be cheaper.
How to Buy a Car Out of State
Sometimes, it might make more sense for you to purchase a car out of state. For example, you might not be able to find the exact car you want locally, and looking out of state simply expands your search range. Maybe you’ve noticed you can save significant money by driving a few hours to purchase the car you want. Whatever your reason, there are some things you need to know and consider. Forbes has an in-depth guide on buying a car out of state, both from dealerships and private sellers. Here are a few key takeaways.
- Much of the buying process is similar to an in-state purchase. You still need to shop around, research the best price, and state your intent to buy from the seller. However, you’ll need to contact your local DMV to see if there are requirements in your state (such as emissions testing or safety checks) that aren’t required in the state you’re buying.
- Working with a dealership is often easier because they can help you manage differences in state requirements, answer questions, and help with paperwork. For example, they can help you navigate testing and safety checks. If you purchase from a private seller, you will want verification the car can meet these extra requirements. You’ll also have to handle the paperwork yourself.
- When you’re getting the title signed over, you’ll need an appropriate insurance policy that meets your home state’s requirements before you can register it at the DMV.
- You must pay taxes based on where you live and register the car, not where you’re purchasing it.
Make sure you find the value of a car before buying.
Before you spend thousands of dollars on a used car, make sure you find out the estimated value. There are several helpful sites, like Kelley Blue Book and Edmunds, that can give you a fairly accurate appraisal. You might also be able to browse used car lots and online marketplaces to see what vehicles are listed for and selling for in your area.
Does the color of my car matter for insurance?
Many people have heard that red cars cost more to insure. However, this little piece of information is entirely false. There are a lot of factors that can make your car insurance go up, but car color isn’t one of them. As we mentioned previously, insurers care far more about the year, make, and model of your vehicle.