Used Cars Can Be the Way to Go

In these tough times, people who once looked down on used cars now view them as a serious alternative to a new vehicle.

"As soon as the economy went sour, people immediately had a mind-shift from new cars to used cars," says Philip Reed, senior consumer advice editor at Edmunds.com, an online automotive information site.

The savings can be substantial, because a car's value drops up to 30 percent the first year it's on the road.

Edmunds.com lists the manufacturer's suggested retail price of a basic-model 2011 Chevy Aveo as $11,965, while a 2008 Aveo with 28,215 miles on the odometer was available in late August for $8,962. A 2011 Toyota Camry LE with automatic transmission was listed at $22,255, while a 2008 model with 55,066 miles could be found for $12,271.

Besides sticker price, there are plenty of other good reasons to choose a used car, according to Edmunds: lower insurance costs, the wide availability of cars covered by warranty, and the ease of tracing a vehicle's history.

But what's the best way to pick a used car? Here's some advice:

1. Find at least three similar car models you're sure will fit your budget. This flexibility makes you a stronger negotiator. Be sure to consider models that have good reputations, but aren't the most popular in their class. Less demand can translate into lower prices.
   
   
2. Thoroughly research your choices at websites that offer free car ratings and reviews, such as Edmunds.com, Cars.com and ConsumerGuide.com. When you have narrowed your search to a specific vehicle, call the seller beforehand. Verifying information over the phone might save you a trip. Get the Vehicle Identification Number (VIN) and purchase a history report for a nominal fee from
   Carfax or AutoCheck.
   
   
3. Consider buying a car online to expand your choices. A shipping fee usually bumps up the price you pay, but you might save enough on the purchase price to more than cover the shipping.
   
   
4. If you find a car locally, test drive it under your normal driving conditions. Tooling around a suburban neighborhood tells you little if you normally drive on the highway.
   
   
5. A pre-purchase inspection typically costs from $100 to $200, but can save you thousands of dollars down the road. Another option is to buy a certified used car that has passed a manufacturer's inspection.
   
   
6. Apply for financing in advance. If you belong to a credit union, you may find a better interest rate than at a bank. Then see whether the dealer will make an even better offer on the loan. "You get a blank check from the credit union, take it to the dealer … stick to your guns, and you get a good deal," says Mukesh Chatter, president of MoneyAisle.com, a car financing site.
   
   
7. Watch out for scams. "There's all kinds of things in used cars to deceive people, but a lot of these things can be avoided," says Reed. Scams can range from expensive disasters — buying a car that doesn't exist — to unwelcome surprises, like a rolled-back odometer. Be wary if you're being rushed into making a purchase. And if you're shopping online, try to focus on your region, so you can see and test drive the car before you pay for it.
   
   

Tauren Dyson is an intern at the AARP Bulletin.