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How to Shop for a Used Car

How to Shop for a Used CarHow to Shop for a Used Car

Buying a used car can be a wise move. You’re likely to save money, but it’s important to shop smart and know how to negotiate. As you set out to find your new (to you) set of wheels, here are some strategies to help you get the best deal.

Used Car Pricing

Shopping for a used car gives consumers a few different purchase options. Private party and retail sales are both options in the used market, but each offers slightly different advantages. Private party sales are car sales that take place between two people, with no dealer involved. Retail sales take place at a dealership.

Kelley Blue Book’s website is a good source for used car pricing, giving a point of reference for used car shoppers looking for vehicle prices from private parties and dealers. Additionally, Kelley Blue Book provides trade-in values so you can know what to expect when trading in or selling your car. 

Private Party vs. Retail Used Car Pricing

Generally, you’ll pay less when you buy from an individual rather than a dealership. Why would anyone ever buy retail when shopping for a used car? For starters, Kelley Blue Book retail pricing assumes the dealer has gone over the car and fixed any issues, so vehicles on used car lots should be reconditioned and up to date on all routine maintenance. Dealerships can also offer extended warranties and financing, which provide customers with peace of mind and an easier transaction. While a private party sale price may cost less, you’ll have to provide your own financing or pay the seller in full. You should also hire a mechanic to check out the car for any mechanical issues before purchasing.

If you want a warranty for additional peace of mind, consider certified pre-owned vehicles (CPO). While CPO vehicles command a higher price tag, they generally come with an extended warranty that’s backed by the manufacturer. CPO vehicles are often subjected to a multi-point inspection and sometimes include additional features such as roadside assistance and a vehicle history report, which details the car’s service history and any accidents that have occurred.

In the value data below, you can see how much money can be saved by buying a pre-owned vehicle. Suggested used vehicle pricing is from Kelley Blue Book. These prices assume that each vehicle is in excellent condition and has 60,000 miles on the odometer.

New and Used Vehicle Pricing


New 2013 MSRP

2008 Retail Price

2008 Private Party Price

BMW 550i sedan




Kia Sorento EX AWD




Ford Focus SE sedan




You’ve probably heard that new vehicles lose a significant portion of their value as soon as they’re driven off the lot. While this is a negative for new car buyers, depreciation works in used car buyers’ favor. offers ownership costs and depreciation figures for new and used cars. In addition to giving you the hard numbers that show what a vehicle will cost to own, IntelliChoice provides a value rating, which gives an indication of how much it costs to own a car over five years in comparison with rivals.

With the exception of some collectable cars, all cars lose value over time. However, some models will depreciate faster than others, due to factors like a lower reliability history and expensive maintenance and repair costs. If you’re eyeing a new model, but know that its value depreciates quickly, consider buying a model that’s a few years old to get more for your dollar. However, buying a used model that depreciates quickly also means that when you want to sell or trade it in, you’ll get less money for it.

The chart below compares midsize sedans and SUVs that have similar new prices, but different used prices. Private party, retail and CPO price data is from Kelley Blue Book. The prices in the chart below assume the vehicle has 60,000 miles and is in excellent condition.


New 2013 MSRP

2008 CPO Price

2008 Retail Price

2008 Private Party Price

Ford Edge SE





Hyundai Santa Fe Sport





Honda Accord LX sedan





Chevrolet Malibu LS





Vehicle History

After you’ve test driven a few cars and found the one that’s best for you, it’s a good idea to check the vehicle’s history through a company like AutoCheck or Carfax. They will provide a detailed report based on the car’s vehicle identification number (VIN).

Vehicle history reports list incidents such as accidents, fire or flood damage and odometer problems, so a clean report should provide buyers with some additional peace of mind.

Used Car Financing

The last hurdle before negotiating a price is determining how to finance your used car. It’s generally better to provide your own financing through a bank or credit union. Often the most competitive rates for used cars are the ones you’ll find outside the dealership.

While dealer financing does offer some convenience, providing your own will keep things easier when you sit down to negotiate at the dealership. If you’re buying from a private seller, you’ll need to have financing lined up before purchasing the car.