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Last updated: April 7, 2025
Guide to Buying a Used Car 2025
Here’s what to know, where to look, and how to proceed when looking for certified pre-owned vehicles.
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The average cost of used cars surged during the pandemic, and have never truly recovered. While the cost of used cars decreased as inflation cooled, prices remain one-third higher than they were before the pandemic.
We put together the following guide to help you get the best deal on a used car.
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How to Buy a Used Car
Deciding What Features You Want
It’s hard to know what to look for in a car if you haven’t defined your needs. The below questions will help you identify your needs so you can make an informed decision on which used car to buy.
- How many people will you be driving?
- Is the car for commuting, business, or pleasure? Consider a van or truck to carry business equipment, or a vehicle with low mileage if you plan on taking long commutes.
- Do you need four-wheel drive for outdoor adventures or dangerous terrain?
- Is good gas mileage a priority?
- Do you want a truck, an SUV, or something more compact?
- How much cargo space do you need?
- Are you looking for any specific features like built-in GPS, a convertible or sunroof, or a leather interior?
Doing Your Research
- Reliability and ownership costs: One of the most important things to identify is the total ownership cost (TOC). TOC will tell you the cost of a used car over time, including the initial purchase price, long-term maintenance costs, depreciation rates, insurance costs, and the cost of repairs. Find these estimates through a vehicle evaluation website like Edmunds.
- Check for recalls: When a manufacturer or the National Highway Traffic and Safety Administration (NHTSA) decides that a vehicle does not meet minimum safety requirements, it may recall the vehicle to make the appropriate repairs or fixes1.
If you buy a used car that needs to be recalled, you (not the dealer) may bear the responsibility of executing the free recall repair, which most drivers don’t want to deal with. Find out whether a vehicle or part has been recalled by entering your vehicle identification number in the NHTSA directory.
- Mileage: A well-maintained used car with 100,000 miles may have fewer issues than a poorly maintained car with 60,000 miles. The car’s age, maintenance, make, and model will all contribute to the effects mileage will have on it. Speaking with a trusted mechanic is the best way to determine the wear and tear of a vehicle.
- Vehicle history report: A vehicle history report will tell you everything about a vehicle’s past, including any previous accidents, work or repairs, previous owners, and recalls.
- Factory warranty: Check to see if the used car is still under factory warranty. If you’re buying a used car from a car lot or dealership, they will likely offer you an extension on the warranty. Find out how much warranty is left on the vehicle and decide if you’d like to add more for your peace of mind. Learn more about extended warranties.
Setting Your Budget
Knowing your budget will help you narrow your options down. If you can only afford $10,000 on a used car, for example, that eliminates most sports cars, SUVs, trucks, luxury vehicles, and newer cars. If you’re looking for a $10,000 used car, mostly sedans, hatchbacks, and some wagons2.
Finding it difficult to reach a desirable budget? Try trading in an old car to bring costs down and relieve yourself of an unwanted vehicle. Our car affordability calculator can help you determine the target price of a vehicle you can afford.
Let’s look at what kind of cars you can expect to buy with a specific budget:
| Budget maximum | Used car types available |
|---|---|
| $10,000 | Compact sedans, hatchbacks, and a few wagons; mostly 2008-15 models with higher mileage |
| $20,000 | Compact and midsize sedan models, hatchbacks, some early hybrid vehicles and trucks, and SUV options; mostly 2014-19 models |
| $30,000 | 2020-2022 sedans, hatchbacks, hybrids; a variety of trucks/SUVs; some older sports cars/luxury vehicles |
| $40,000 | Newest SUVs, sedans, sports cars, and luxury models (2023+ models) |
>> Learn More: Better understand how much you can afford with our Car Affordability Calculator
Searching for a Used Car
In the digitally connected world, you can either visit a used car dealership or try a number of online options:
- Social media resources like Facebook Marketplace
- Paid sites like Autotrader, Craigslist, and eBay Motors
- Used car dealers that have apps and strong online aggregates, like CarMax
- Local big-name dealerships
Exercise due diligence to ensure that when you’re buying from a private seller, online or otherwise, you’re doing so in a safe and legally-sound manner. We’ll look at some safety best practices in a later section to make sure your transactions run smoothly and legally.
Determining How Much a Used Car Is Really Worth
If you buy through a reliable used car dealership, like CarMax or Berkshire Hathaway Automotive, a lot of prices will be non-negotiable. Still, you can always assess the price of a vehicle by comparing its cost online.
Trusted online used car price estimators like Kelley Blue Book, Edmunds, and Consumer Reports list price ranges for a wide range of vehicles. Regardless of whether you make an assessment yourself, compare prices, or use an online evaluator, test drive the car and take it to a mechanic. More on how to execute a comprehensive inspection is below.
RELATED
Learn more about how you can pay less than Kelley Blue Book when buying a used car.
Following Best Safety Practices When Buying a Used Car
Especially if you’re buying a used car from a private seller or someone online, you want to be aware of popular scams and the laws in your state pertaining to used car sales.
DID YOU KNOW?
While most Americans think of odometer tampering as a thing of the past, the NHTSA estimates that more than 450,000 vehicles with odometer tampering are sold each year.
- Know your state’s lemon law. If you live in a state that functions under lemon law for used cars — Connecticut, California, Massachusetts, Minnesota, New Jersey, New Mexico, or New York — you can, in some cases, get your money back or require a seller to make a repair if something in your used car is defective.
- Or know your state’s “as is” law. For all other states not under the lemon law, used car purchases function under an “as is” sale, which means that you purchase a used car in its current condition, damages and all. Unless you have something in writing, like a service contract or warranty, your seller will not be required to refund you if you discover something wrong with your car after purchase.3
- Avoid partial payments on fake ads. Scammers will create fake ads for cars that don’t exist and ask that you pay a partial amount before seeing the car. Never pay any amount for a used car unless you’ve seen the car and met the seller in person.
- Be wary of cold emails, phone calls, and social media messages. Scammers may pose as representatives from dealerships or popular online car sellers. Some common ways they may ask you for money is through a wire transfer or gift card, and they will often try to rush you through a sale. If you’re receiving a message or phone call from someone who claims to be from a reputable dealership and they start asking for your personal or payment information, they are trying to scam you, likely.
- Be wary of curbstoning. Curbstoning is when a dealer poses as a private seller to avoid specific regulations that certified dealers are obligated to uphold4. The car may be missing necessary safety features, like an airbag, or may have been salvaged in the past. Dealers dress these cars up with cosmetics to make them appear to be in good condition when in reality, they may not even be legal for open market sales.
Avoid curbstoning scams by getting the car thoroughly inspected, checking the title, and being cautious of used cars you find in public with “for sale” signs in the windows.
- Check the title. VIN checks are free and available online at several providers, like CarFax. Scammers can “wash” titles (i.e., erase salvaging brands that act as warnings on car titles), but they can’t wash the electronic records. Always check the title online before you purchase a used car.
TIP
Beware of fake vehicle history report websites that ask for your personal information and charge you a small one-time fee. These are VIN-check scams and won’t provide you with a history report. Instead, use a credible source, like AutoCheck or CarFax, to check your titles6.
Negotiating the Price and Making Your Purchase
Outside of some of the largest used car dealerships that have fixed, non-negotiable prices, you can often talk your way into a better price for a used car. Inspecting the car, researching what it’s worth, and showing competing prices for the same vehicle/year will all give you leverage to negotiate. If you don’t feel like you’re getting a fair deal on a car, don’t be afraid to walk away.
How Much Do Used Cars Cost?
Used car prices remained relatively stable in the years leading up to the pandemic, then surged between 2020 and 2022. The primary reasons for the surge were shortage of parts (mostly computer chips), limited production of new vehicles, and the global strain of the pandemic. Prices stabilized around 2023, but overall, have increased 49 percent since 2016.
| Year | Average cost of used cars | Year-over-year percentage change |
|---|---|---|
| 2016 | $19,890 | – |
| 2017 | $20,010 | 0.6% |
| 2018 | $20,590 | 2.8% |
| 2019 | $21,090 | 2.4% |
| 2020 | $22,030 | 4.5% |
| 2021 | $26,710 | 21% |
| 2022 | $30,740 | 15% |
| 2023 | $29,310 | -0.5% |
| 2024 | $29,710 | 1.4% |
How to Get Auto Insurance for Your Pre-Owned Car
A large factor in the cost of insurance is a vehicle’s total cost. The higher the total cost of a vehicle, the more expensive your insurance is likely to be.
Because used cars are cheaper than new cars, you can expect insurance for used cars to be cheaper as well. The process for getting coverage is almost identical to getting insurance for a new car. Here are the five steps to get car insurance for your used car:
- Decide how much coverage you need. Most states require minimum liability coverage, but we recommended getting full coverage car insurance to pay for your injuries and damages as well. If you financed your car, your lender may require you to carry full coverage.
- Compare quotes from different providers. Once you know what kind of coverage you need, comparing prices is as simple as spending a few minutes filling out an online form. The more information you provide to the insurance company, the more accurate your quote will be.
- Talk to an agent. Once you’ve gotten your quotes, speak to an agent. Agents help you process your policy, and they can give you the most up-to-date information on their policies, bundling packages, discounts, and other perks they might offer.
- Apply for a policy. After you’ve spoken with an agent and feel confident choosing a provider, apply for a policy and see what your premiums look like. Make sure to set a deductible within your price range, but remember that raising your deductible will lower your monthly payment.
- Pay your premium. Put your policy into effect by paying your first premium. Your coverage will begin on your policy’s effective date.
Recap
Resources like history reports, evaluations, and mechanic inspections can help you make safe, informed decisions when buying a used car. Beyond vetting the history and condition of the used car, the process isn’t that different from buying a new car, especially when you’re getting your used car insured. For more, check out our analysis of the best auto insurance for used cars.
Frequently Asked Questions
Do I already need to own auto insurance to buy a used car?
Technically you can buy a used car without auto insurance, but you need an insurance policy to drive it legally. If you already have a policy on another car, your insurer may have a grace period (usually 30 days) to add another vehicle, during which you are insured. If you’re shopping for a used car and you know the make/model you’re interested in, or the VIN, you can get an estimated insurance quote ahead of time. Then, you can finalize the policy when you buy the car, and ensure you don’t risk driving without insurance.
How do I buy a used car from out of state?
To buy a used car from out of state, you’ll likely need temporary tags or a transit permit. Some states allow you to use the seller’s plates temporarily, but others require you to get a permit from the DMV where the car was purchased. To obtain temporary tags, you’ll usually need the bill of sale, proof of insurance, and the signed title. These tags are valid for a limited time, allowing you to legally drive the car home. If you’re using a transport service instead of driving, you may not need temporary tags.
Once the car is home, you must register and title it in your state before the temporary tags expire. Visit your local DMV with the required documents, including the title, bill of sale, and proof of insurance. You may also need to pay taxes and fees based on your state’s requirements. Some states require an emissions test or safety inspection before issuing new license plates. Once the process is complete, you’ll receive your official registration and plates, making your vehicle fully legal in your home state.
What is a good interest rate on a used car?
If you’re paying under 7 percent on a used car loan, you’re likely getting a good deal. That said, a good interest rate on a used car depends largely on your credit score. Check out the average used car interest loan, according to Experian:
| Credit score | Average used car auto loan interest rate |
|---|---|
| 781+ | 7.41% |
| 661-780 | 9.63% |
| 601-660 | 14.07% |
| 501-600 | 18.95% |
| 300-500 | 21.55% |
In addition, longer loan terms (72 months or longer) typically have lower interest rates; however, you’ll end up paying more money in interest over the lifetime of the loan.
Staff Writer & Editor
Ali Saleh is a copywriter with nearly 10 years of experience in content writing, editing, and journalism. Ali’s work has been featured on a number of notable sites and publications, including MSN, Business.com’s award-winning newsletter, and Groove Korea, South Korea’s largest English-print magazine. Today, he writes for dozens of brands, providing expert guides and informative articles on auto insurance, healthcare, recruiting technology, business, and more. Ali holds a Master of Fine Arts in creative writing from North Carolina State University.
Citations
Check for Recalls: Vehicle, Car Seat, Tire, Equipment. National Highway Traffic Safety Administration (NHTSA). (n.d.).
https://www.nhtsa.gov/recalls10 Best Used Cars Under $10,000. Kelley Blue Book. (2024, Jun 21).
https://www.kbb.com/best-cars/10-best-used-cars-under-10000/Buying a Used Car. University Student Legal Services, North Carolina State University. (2024, May 23).
https://studentlegal.dasa.ncsu.edu/buying-a-used-car/5 Ways to Avoid Becoming the Victim of Curbstoning in an Auto Sale. HG.org Legal Resources. (n.d.).
https://www.hg.org/legal-articles/5-ways-to-avoid-becoming-the-victim-of-curbstoning-in-an-auto-sale-33902Steering Clear of Vehicle History Report Scams. Federal Trade Commission (FTC). (2018, October 19).
https://consumer.ftc.gov/consumer-alerts/2018/10/steering-clear-vehicle-history-report-scamsU.S.: Average Selling Price of Used Vehicles. Statista. (2024, February).
https://www.statista.com/statistics/274928/used-vehicle-average-selling-price-in-the-united-states/The Used Car Squeeze: Why Shoppers Will Face Higher Prices and Fewer Options in 2025. Edmunds. (2025, February 26).
https://www.edmunds.com/car-news/used-car-prices-2025.html
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