Buying Used: Hot to choose a preowned vehicle that will provide years of loyal service.

Prices on used vehicles have climbed due to reduced new vehicle sales the past several years, a drop in leasing and fewer trade-ins. Prices on fuel-efficient models have increased with particular speed, with values up 20 percent from January to May 2011, according to a Kelley Blue Book market report.


Here's a checklist to help you manage your search:


1. Decide what's most important to you: price, style or make. The more flexible you are the more options you'll have. The National Endowment for Financial Education suggests separating needs, a car for transportation, from wants, a red SUV with tinted windows. Think about your circumstances: Do you drive mostly in the city or the country? How many people do you have to carry? Do you have a long commute?


2. Educate yourself about prices, trends and reliability. Use Edmunds (Edmunds.com), Consumer Reports (consumerreports.org), Kelley Blue Book (kbb.org), IntelliChoice (intellichoice.com) and the Federal Trade Commission (ftc.gov; select "consumer protection" and click on "consumer information"). Look through local newspaper ads in print and online. The EPA website fueleconomy.gov rates the fuel economy of models dating back to 1984.


3. Decide how you are going to pay. Financing a used car adds to its cost because you'll have to pay interest. If you decide to finance your purchase, understand the car's exact price; the amount you are financing, the finance charge, the annual percentage rate, the number and amount of payments and total sales price, including all the payments and interest.


4. Before you visit a dealership, check financing options through your bank or credit union. Many financial institutions will let you pre-qualify before you shop so you know what interest rate you have to work with.

5. Make sure you want the car. Although a dealer may have a return policy, they aren't required to by law.


6. Know what your car is worth. Valuation sites such as Kelley Blue Book (kbb.com) or the National Automobile Dealers' Association (nadaguides.com) provide average transaction prices for your area based on a car's age, condition, mileage and equipment. If you are trading in a car, keep that transaction separate so you can keep track of how much you are paying for the newer model.


7. Once you find a car that fits your needs, examine it thoroughly. Take a flashlight, a rag, a used-car test drive checklist and a friend. Check under the hood; look at the fluid levels and the condition of the engine and visible belts. Look at the undercarriage and inspect the body. Stand behind the car as the seller starts it to see if any smoke comes out of the tailpipe. Check the tires, the radio and make sure the heating and air conditioning systems work. Check the remote key access and open and close the trunk. Look for stains and leaks.


Test-drive the car on a familiar road, and if possible, the highway. Apply the brakes forcefully and check the alignment. Take your time. When you return, check the interior. If you find cosmetic flaws, you can use them to negotiate a better price.


The FTC requires dealers to place a Buyers Guide in every used car they sell. The guide tells whether the vehicle has a warranty and what percentage of repair costs the dealer pays under the warranty. It advises the buyer to get all promises in writing; to keep the Buyers Guide after the sale; and it gives information about the car's mechanical and electrical systems.


If you plan to spend $10,000, don't be talked into $12,000. If there's nothing that meets your needs, walk away and start the search again somewhere else.

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