How To Buy A Used Car? 

An important thing he mentions is "Don't get married to a particular vehicle". They're like buses: Another one comes along every half hour.

Scotty Kilmer should make an appearance on these types of calls. Caller: I want to buy a used Mercedes. Dave: How much is it? Can you afford it? Scotty: That car is an endless money pit.

If you're broke you shouldn't even be focused on what kind of car you get, just focus on basic transportation. Everyone is too wrapped up into what kind of car they have when they should be worried about putting some money in the bank.

Think this must be the record for the highest number of questions asked in one call.

I'm a car salesman and if you listen to what most sites say about not telling the sales guy about paying cash or other things honestly your just going to cause yourself much MUCH more headaches. What Dave is saying is actually really good just be upfront and honest with them. Know what it's worth and give a price you want to pay and don't budge. Go to at least two dealerships and let them know that the dealership who gives you the price you want to pay first will earn your business. Older in stock vehicles have more wiggle room. Vehicles they took on trade probably have more wiggle room on them.

walk in like you know what's going on and you not here to waste time. never let you guard down, don't get friendly, act like you don't like the truck

"certified" pre-owned is just an excuse for the dealer to charge more

You've saved 30,000$ and the first thing you want to do is buy a truck that's going to depreciate every year?! Buy an 08-09 and walk out with the other 15,000 in your pocket!

Linear regression models are a great way to value a vehicle. Take a particular make, model, trim, year, etc to standardize and use miles as the x variable and cost as the y variable. What you do is research local dealerships for that car, see how many miles the car has and how much they’re selling it for, use that to create a regression model. Try to get at least 10 dat points. You’ll get a formula resembling y=mx+b, where x is the number of miles. If you find that car at a dealership, you can plug the number of miles into that formula and it will estimate how much the car is worth. Keep in mind that you need to pay attention to the R^2 value. If it is less than 0.7, the model might not be strong. However, if you only input data for the same make, model, trim, year, no previous wrecks, etc, then miles will likely explain 70-90% of the variation and give you a reliable estimate.

There is a perfect time of the year to buy a car. Try December. Sales are slow through the holidays and dealers are more willing to actually take a loss than having to carry that old inventory into the new year. The last week in December is perfect. Do not wait until after the first of the year. That is when dealers are looking at their busiest time, tax season.

I remember when I purchased my preowned 13 toyota tundra. I went to several different dealerships and every time I brought up the fact I was paying cash every salesmen and floor manager always told me cash is no longer king. It makes sense, loans make them way more money. Sometimes cashs only leverage is the fact that you are serious about buying the car outright without having to go through hoops and hurdles to get a loan with them.

Certified pre-owned usually means an extended warranty on the vehicle raising the cost a couple grand.

My buddy from college used to be a Ford salesman and told me he always bought his new cars at the invoice price, what Dave is calling wholesale. He said that the manufacturer offers the salesmen bonuses for every X number of cars they sell. So, even if they make no commission, they are sometimes willing to sell the car at no gain. He claimed you’d have to drive to a few dealerships before one would bite, but there’s always a salesman who is a car or two short of his numbers and is willing to make that bonus in 15 minutes.

And don't buy extended warranty get a good mechanical inspection at a garage of your choice or have a mechanical Uncle or friend go with you when you buy the car. That extra $300-$200 will be your peace of mind

One tip if you have the cash to buy outright, instead of doing so buy it on finance and then pay the finance off in full before the month is up. Dealer can sell the car cheaper because he gets commission from the finance sale, and you can pay it off and not pay any interest on the loan. Just watch out for early settlement fees, make sure there isn't a penalty.

I wish I would’ve found Dave back in April before getting a car loan. I guess making mistakes is what makes you look for help. Currently working on step 2.

Kelly Blue Book is a GUIDE. Banks loan money based on NADA Retail. NADA Retail is typically NOT a baseline for a vehicle. You're looking for a market price. The only "Book" that buys a vehicle is a check book. Do NOT swear by websites. If you use KBB to buy a vehicle you will lose, every time. PLEASE DO NOT SUPPORT AUTO BROKERS. THEY WILL NOT SAVE YOU MONEY. (You are paying for convenience, not a great price)

I knew a guy who worked at a car dealership. He said that they didn't like it when people paid cash because it meant that they wouldn't make any commission on the sale of the car's financing, also known as "making money on the back end."

Find a good mechanic prior to purchasing a used vehicle and have them inspect it! Do not trust certified vehicles; once you buy it, it’s yours with all known and unknown faults. Many learn this the hard way!

Never understood why people bother asking Dave how he's doing.

Certified Pre-Owned (CPO) is sometimes another gimmick to get more money out of people. I worked at a huge dealership as a lot attendant, and I observed the guys in the used lot section, do what appeared to be a five minute inspection and label a car as a CPO. I personally drove that car to move it on the lot, and it was gross (scratches, dents interior had issues, key fob was sticky etc.) inside and out. There were much nicer non-CPO cars on the lot. So don't let the eye candy fool you. This is not to say this is true for every CPO car. If you are still not sure about a used car, take it to a trusted mechanic and spend the $50-100 to have them look it over. I would feel better about spending a $100 to know that i saved myself from a $1000 repair bill buying a bad car.

One other thing to consider when buying used is that a lot of repair places, will when they are not busy let you take one of their people for a few and go have them check out the car you are looking at for wear tear and potential issues.

VEE-HICKLE! Love you, Dave :)

I agree with all this, but I think you should take more time and go to other dealerships and let them know you're interested in another one, but are willing to change if they can beat the price. Do this a few times until the car sales people stop taking significant money off the price.

I know a man who does exactly this. He works out what he's willing to pay (reasonable offer), writes a cheque and tells them, this is all I'm willing to pay, take it or leave it. He only missed on the car once...and that's only because they were a bit late calling him to accept - he'd already done another deal elsewhere

1994 toyota celica its the only vehicle you'll ever need

always buy a car at the end of the day..the salesman want to close the deal and go home. they dont get paid by the hour.

Car dealerships ALWAYS ripped you off!

i figure i save up 5k buy a 3k car on CL and put the 2k on repairs and call it a day

Pretty good advice, but I think it applies more for regular people cars only. If you spent 50k on a used Aston Martin you'd definitely want the warranty to pay for any potential problems. High price cars always have high price repairs even if the price you paid for the entire car was cheap.

ALWAYS HAVE A MECHANIC CHECK IT FIRST. NOT THE DEALER'S MECHANIC.

Thank you for explaining this! I've never truly known what I'm doing but this is a step by step how to get a deal. Now I'm not afraid to buy a used car.

If it's a truck and it doesn't have mud under it you probably found yourself a good one. Believe it or not some people buy trucks and never take them off the pavement. That is the kind of used truck you want.

end of the month is always better if buying a new car. Dealers get bonuses each month if they sell a certain number of units.

Walking into any dealer and saying, “look, its a done deal and I will write you a check right now for that car over there but you’re asking too much for it” will immediately get a reaction of “NO” because dealerships don’t accept personal checks on the spot and let you drive away.

Thank you so much Dave Ramsey! You've enlightened me when it comes to buying a used car compare to a brand new one. God bless you and wishing more success to your show!

Boy what I could do with 30k right now.

Definitely don't want to tell them you're paying cash, new or used. They will always drop the price and get you in the financing if that's what it takes to close. Let them go through their whole 4 square, this much down, this much a month BS if that gets you to where you need to be. The biggest thing about buying a used car specifically, is patience. Find what you want for the right price. Also with Carfax and the like, there is no need to avoid private sellers. Just try to find a one owner garaged vehicle that was owned by someone at least 30. Check the nooks around the trunk really well. Detailers can make just about any car look garaged these days. If you care more about your purchase than the person did about cleaning, then you should be alright.

Take it to an independent body shop and have them look it over for prior collision work. Pay them for their time and have reassurance the thing is not pieced back together.

I understand where Dave comes from and his reasoning, but the one thing I feel he leaves out of the equation is enjoyment. What's the point of going to work every day if you can't splurge on a few luxuries? We have a comfortable life with a ​few bills, but we bought a $55,000 car at 0% interest. Every single morning I look forward to driving it to work. It gives me immense pleasure. Yes, I have debt, but it gave me so much happiness. If I fall over dead tomorrow, at least I had an enjoyable life.

Not mentioned: Insist on getting the used car inspected by a independent mechanic prior to purchase. Expect firm resistance from the dealer on this.

For used cars, I would do my research first to see if a particular car you're looking at is a good choice because usually, the cheapest car is not always a good choice. Kelly Blue Book and Consumer Reports are always good sources. Also, unless you have the income to actually afford it or willing to invest in it, avoid buying European cars as used because of high maintenance and the reliability on many European cars are questionable.

It's funny that he says he wouldn't want a car that had been a rental. If you go to a dealership, there is a very high chance that you are getting formal rental cars. Once they hit a certain mileage point, they typically sell them to dealerships. I know this because my husband worked at a dealership and because I worked at a credit union where we worked with rental car companies and dealerships for financing. We have had several vehicles that had instant equity in them from state auctions. They are very meticulous about getting all repairs done/regular and required maintenance. Other good deals have come from dealerships and private party, but we always knew who had driven them before us. We are very picky about previous owners. He's right that you have to be willing to walk away from a deal to get the best deal.

I would go about it slightly different I would never tell them I am paying cash, the dealer makes 1000 plus on bank reserve I would lead them to think I could be financing it , maybe buying the warranty they make money on this also and then the dealer might not try and get all his profit on the sale. Have an independant shop inspect it before signing a binding contract and be prepared to walk away if your conditions are not met. Be careful on private sales and always look up the service history or previous owner and check that information if you can. Otherwise buy a new car and shop the internet dont buy rust proofing and warranty you can do that after the sale on a new vehicle .

I’m indian from punjab love to watch u explaining how to be financially free

On top of the comprehensive limited warranty coverage, they include seven-year/100,000-mile powertrain limited warranty coverage with every Ford Certified Pre-Owned vehicle.* It covers the engine, transmission and more: Transferable to future owners at no extra cost The big + for certified pre-owned is extra PT warranty, instead of the standard 5yr/60,000m PT . Certification is not free, so you will pay a few hundred more, WORTH IT !

All dealers are there to make money. All dealers will never, ever sell below what they purchased a vehicle for. Ever. If they do, do you think they would be in business long?

I've always bought trucks with about 80k to 150k miles, from individuals. While it's not a scientific sample I've never had any major problems and got years of service from these vehicles. I research the make and model to see how it's type has held up over the years. I avoid 4 wheel drive and don't care about light body damage or if the bells and whistles are still working.

I used to be into this old used car mentality until mechanical problems. Buy a fairly new car you can manage save yourself the money of buying parts and mechanic labor cost

I got lucky on my 2015 RDX (basically brand new as in, no registered owner). Haggled for about 2 hours and made a cash deal. They then physically messed up the vehicle on the day I was supposed to pick it up and I snapped. They then offered me another RDX, same model but 10k less KM on it (~7,000 km). Haggled more, and they ended up bringing the price down $7,000 and threw in 3 free oil changes.

First thing you want to do when buying a used car is check the DIP STICK to the oil in the motor have a napkin with you first pull out the DIP STICK and wipe it clean then actually look at the DIP STICK it's self if the DIP STICK is nice and shinny from one end to the other than you will know if the oil was changed on time ....... NOW if you see the DIP STICK with burnt brown marks up and down the DIP STICK even in the middle of the DIP STICK......... Then shut the hood and RUN!!! This means that they NEVER changed the oil on time I hope THIS helps all of you

Seasonally, the only time not to buy a vehicle is buying a convertible before summer and buying a four-wheel drive vehicle for the winter. Best to wait until after the season is over.

Buy a 20k used toyota tundra and put the $10k in a separate savings account. Toyota tundra is a great truck. At 100k miles they are barely getting started.

I did that with my last vehicle, found it on internet searches. Had signed up for sites to contact me. I went and spent some quality time at a place like AutoMax who knew I wouldn't be buying but helped me decide on the vehicle. I'm sure this is in hopes I couldn't find locally and they'd source. I knew all about the vehicle, it was a trade in at another brand dealer. I called another dealer w/ same brand and asked for a review of the vehicle which they checked over the phone....Lexus keeps good records. Selling dealer had it 4 months. I drove to another town where that car isn't so popular and they were having a hard time selling it. Then I looked closer and added in the things they had to fix. He gave me a price and then added what it would be if I financed it as if he was giving me a good deal and assuming I would (I was dressed down). I said I'd write a check for the original amount and said I'd wait the two hours for the repair items. The manager tried to talk me out of deal and financing taking all my savings......blah, blah, blah. Where I live there is a wait list on rental cars at Enterprise, they come certified, same as a dealer, worth checking. I think they also buy. It really pays to do your homework, took me about a month to find the car an hour away.

His faith in Ford though! My friends dad bought F-150 brand new 2 years ago, the transmission failed on him.

Im a mechanic so now i look at vehicles as a drivetrain shell. Im about to buy a lemon car for 2000 because its extremely clean, i have the money for a remanufactured engine and or transmission or could tear down and rebuild the engine and transmission because its reliable and simple. it does not matter to mechanics if the parts exceed value because the value is in the miles it travels and if thw added mileage on the drivetrain shell can be used to make money and incorporate the fuel costs and there you go. you can calculate the rwpair, miles to be driven and i used to hot shot drive so you can turn the added mileage on the drivetrain shell to a return on investment actually. at the end i can sell it for a small recouperation. basically thats a bonus of being a mechanic.

Kelly Blue Book isn't accurate typically, it's a decent point of reference, but NADA is Beyer for accuracy

Never pay MSRP price because it is marked up. Do a true car check to find out what a good price is. Yes dealers want to make money in the beginning of the month they may be less willing to deal and so the end of the month is a better time to negotiate. Also buying at the end of a year is great way to get a better deal because the dealer may want to get rid of it to make room for the newer year cars to come in. Most customers need to understand that salesman and sales managers are master negotiators so they know what they are doing so be prepared u r entering their boxing ring. The bottom line is they are their to make a profit just like any business. If you do not like the negotiating process do not be afraid to leave ok but most sales personnel will want u to not leave and go get their manager and keep u their longer to test your patience. Last, they will let u take it home for a night in hopes u will fall in love with it and be willing to put more money down and be more flexible with your payments. Salesmen are not your friends they are there to make money and their are good ones out there.

Buy cash from a private seller. Don't have to play games with private sellers. The 'certified pre-owned' business is a scam.

Cars are not investments.

Dont use kbb. Use nada it's a more realistic value for the car.

small used car dealerships LOVE cash. that cash up front mentioning works. at a franchised dealership it doesn't really work

A few years ago a mate of mine returned a Chev pickup. Very low miles and real clean two year old. The lease buyout was a tad over $9000. I saw it on the dealer lot. I took it for a test drive just for fun. I told the sales guy I ws interested. The price stated was $17,000!!!! I told him he was nuts and that I knew the lease buy out was $9000. I had a laugh and a learning experience. I am sure they would give me a "great deal" at $15,000.

Certified Pre-Owned: I can certify that this car has been owned before. 🤣

I am a huge fan of Dave and what he teaches. These are some quite good principles to live by. I do work in auto sales and the idea of a 2k car that would be worth buying is about 15 years out of date.

I use to work at ADESA auto auction which is where quite a few used cars come from now days to dealrt "Certified pre-owned " is just a sticker, there was no special inspection or maintenance that was done, the vehicle would come in get detailed by individuals of questionable green card status THEN the STICKER CERTIFIED PRE-OWNED (of course it is used) then inspected for dents and dings which was then annotated on paper for the auctioneer driven over and parked until auction day.

"Better than I deserve." I love it!

CPO isn't really worth it... If a car has it, great, but imo, it shouldn't be a requirement when looking for a used vehicle

I'm trying to save enough for the car I want new and get it wrapped to protect the finish and rust proof the bottom then never get another car in my life.

Why not buy a used vehicle from an individual? Take it to a trusted mechanic and make sure it is in good condition, then compare that to a Dealer price of a comparable vehicle. Most of the time you can save a few hundred to a couple thousand...

Dave is being dumb here, if it's a Ford and a year old, it's not necessarily any good. Fords can be spotty for reliability

Also watch Chevy Dude and Scotty Kilmer

"if is FORD, you don't have to worry about:" I laughed my as$ on that one hahaha! First, mistake you made that buying a Ford. That is a bad financial decision.

If your worried about mechanical issues, run a vin check and have a good mechanic check it out

You know what your certified warranty should be? Your savings account!!!

Ask if it comes with an owner's manual? In Canada: ask if it comes with a block heater, those are add-ons, some don't come with block heaters which are necessary in Canada.

By the way, don’t buy extended warranties!! That’s a Golden Nugget.

Never ever tell a Dealer you are paying cash every car dealer tells you not to do that.

Ramsey, you are really good on getting people off debt.. And please keep doing that.. Stay away from how to buy used/new cars 😅

I bought a 93 f150 with the legendary durable inline 6 for $1000 nice body, good interior and all I wanted. Bad engine and tranny threw a new tranny (3ry warranty) and rebuilt the engine myself for $600. Probably spent around $3600~$4000 including new tires, front end, brakes, fluids, rear end, interior, creature comforts. It's been a few years already I haven't spent a dime on anything major only regular maintenance. It has already paid of its self many times over.

This is inaccurate information he is giving her. Dealerships make more money on used cars than new. I was in the car business and I could give her better advice. What she needs to do is ask the dealership to see the invoice for what they own it for and negotiate from there to prevent the back and forth and allow the dealer to make money and get a good deal as well. The dealership is not going to lose money because you saw a price on Kelly Blue Book which is not even looking at the car to see things that may cause the car to be worth less.

Dealerships make more money on used vehicles than new vehicles. The information regarding this provided is inaccurate. The reason being is the dealer can buy from auction for cheap where as new cars dealerships will have to price the vehicle close the to MSRP (of course it will be on the higher end). Dealerships also make a commission on financing and would prefer rather than cash.

Toyota Corolla or Camry from early 2000’s

Tried to work a dealership down with cash and they didn’t bat an eye. They didn’t care so don’t be surprised if they don’t negotiate on that aspect. Smaller dealerships may like the cash buy.

Tried to buy a 3 year old vehicle at a dealership with 30k miles on it and they would only give me about 4K less than buying a new current model

Buy at auction. Paid $3500 for my Crown Vic ex cop car. Had 64k miles on it...now has over 100k and I've only changed the fluids and front brakes/rotors. Paid cash for the car. It's not sexy by any means but I don't have a 500 per month car payment either.

I was wondering if there was a part 2 of this video where the lady asks more questions. Shish.

I brought an Avalon 2006 for $6000 two years ago. With over 75000 miles, no major problems over $200 so far. Will keep it until the engine dies.

She asked some Great questions 😉👍

Best truck we ever bought was a rental car in Hawaii one year old. Drove the tires off and it cost 25 K less than same truck new.

Scotty Kilmer: buy a ‘94 Celica haha! (Horse teeth) 😂

Don't trust any warranties that any from the manufacturer itself. No extended offers or third party warranties bought online, buy CPO or nothing.

"How about paying cash for a 94' Celica". Scotty Kilmer

Newer, high mileage(100k plus), one owner cars/trucks are the way to go. Something that had 25k-35k miles driven on it a year for 4-5 years will kill its resale value but probably still have over 100k miles left in it. If you only drive 12k a year, that’s 8 years of car for sooo much less money.

Certified used? Scotty Kilmer a mechanic with 50 years experience (also on RU-vid) says that term means absolutely nothing. Before you buy any used vehicle get it checked out by an independent mechanic.

So I know this is 7 years old and we’re still in a super seller’s market… some signs saying prices on used cars going down but… I wonder how dealerships are responding to the check on the table thing right now? Like I’d REALLY wanna do that but curious if anyone here has done it in the last couple months?

Dave always provides a good honest opinion, he is knowledgeable about vehicles including purchasing, maintenance, different models etc. Certified Pre-Owned (CPO) vehicle is often not worth the premium dealers charge for them. A CarFax report and a good mechanic's inspection on a private sale car, could save you thousands over a heavily marketed and more profitable certified pre owned vehicle.

Don't buy the eco-boost!!! its a very problematic engine!

Another misconception people have about 1-2 year old vehicles with low miles is that they are in great shape . Think about it if your the type of person that trades in a vehicle every couple years what motivation does that person have to take great care of it ? They know they are trading it in and not keeping it . It could have been beaten like a rented mule because it's under warranty and they knew they were not keeping it. Now a little older vehicle with higher miles thats clean there is a better chance the owner took better care of it .

my husband works at a car dealership. my husband can't sell it for wholesale. he needs to be paid.