I. Narrowing Your Choices

   »  Buying: Buy Used or Buy New?
   »  Begin with a Budget Researching
   »  Used Cars on the Internet

II. Five Keys to Getting a Great Deal on a Used Car

   »  Know the Value of the Vehicle
   »  Use Several Pricing Resources and Know Your Trade-In Value
   »  Separate the Transaction
   »  Understand Your Financing Options
   »  Haggle Hard

III. Other Considerations

   »  Reliability
   »  Depreciation
   »  Interest Rates and Credit Score
   »  Warranties, Repairs, and Inspections
   »  Insurance
   »  Safety

IV. Selling Your Used Car

   »  Sell it Yourself: More Time but More Money
   »  Step One: Set a Competitive Price
   »  Step Two: Advertise Effectively
   »  Step Three: Getting Your Vehicle Ready to Sell
   »  Step Four: Showing Your Vehicle
   »  Pre-Purchase Inspection
   »  Showing Your Vehicle
   »  Necessary Paperwork
   »  Trade it In: Less Hassle, Less Cash
   »  Again, Separate the TransactionI. Narrowing Your Choices
 

Buy Used or New?

Used vehicles are often the best values you'll find in the automotive market. This is especially true for later- model vehicles. Used vehicles have already taken a big hit in depreciation, and you will find that ownership costs, such as collision insurance, taxes, and vehicle registration are lower as well. You will often find that you can afford a better-equipped vehicle when you buy it used.

However, buying a used vehicle is an exercise in finding the right balance between price, value, and reliability, and there will be some important things for you to consider as you shop for a used vehicle. A great resource for you to consider while you are shopping for a used vehicle is Consumer Reports. Here are some things to consider along the way.

Begin With a Budget

This is the first and most important step in the car buying process. You must know how much you can spend before you can determine what you can afford. It's surprising, but most people only have only a vague idea of what they can afford when it comes to buying a used car. Some people think in terms of the basic cash price, while others think only of what the monthly payment will be.

Both approaches alone are flawed. There's more to buying a vehicle than the initial cost, even if you pay cash. There are insurance, fuel costs and maintenance. Almost any new vehicle -- whether it's fresh from the showroom or new to you -- will mean higher insurance rates. Maintenance on a used car, even one just three years old, may be required sooner than you think. And going from that small sedan in your driveway to a flashy new SUV will mean shelling out more per month at the gas station.

You should start by determining your overall family budget rather than how much you want to spend monthly on a car payment. A good resource here is BankRate.com, which has an interactive family budgeting tool. If you have never done it before, this is a good opportunity to sit down a build a family budget.

Once you have all of this worked out, you should have a ballpark figure of the budgeted amount you can use for car payments. A good rule of thumb is roughly 15 to 20 percent of your net income can be used for a car payment. Once you determine that figure, stay with it.