Buying a car should be fun. Unfortunately, it rarely ever is. Not only are there countless aspects to consider, from your personal choice of the right model to deciding if you should get additional insurance and whether to pick a hybrid, a petrol or a diesel. More importantly, at least most of the time, these choices are not entirely free. We all have to deal with budget restraints in some form or the other, after all – and as a consequence, we hardly ever get to buy the car we really want.

If you’re considering buying a used car, you’ve already taken a step into the right direction. And with 40 million used cars being sold each year, you’re in excellent company. Certainly by opting for a used model, you can save a lot of money without having to compromise on quality – if you’re doing it right, that is.

So how does it work?

To help you get started, we have put together this expansive guide. After reading our suggestions, not only should you be able to get the car you want – but you should also have a lot more fun buying it.

Only buy the car you need

The first recommendation sounds obvious: Only invest as much money into a car as you really need. And yet, this suggestion often proves to be the hardest to implement.

The reason for this dilemma is simple: Emotions.

Emotions make us fall in love with cars, emotions make us feel attached to them. Emotions also make us desire cars that are way out of our league, which are expensive to buy, expensive to own and expensive to maintain.

This does not mean that emotions are bad when thinking about buying a car. Quite on the contrary! However, you should be realistic in your expectations and wants rather than chasing a dream car you’ll never be able to afford.

To do this, the best first step consists in making a list of all the things you will need the vehicle for:

• How often will you use the car?
• What will you need the car for? Will you be the only person using it – or do you need to take family needs into considerations as well?
• Will you be driving long distances or only use the car for short stop-and-go city rides? This question is important when considering the size of the car and its horse power.
• Do you have any special requirements?
• How much boot space do you need?

Another important aspect to consider is whether the ecologic footprint of your car matters to you. If it does, hybrid cars are your best choice, although they will set you back more than a regular petrol model. On the other hand, a hybrid can also save you money in fuel costs, so you will need to crunch some serious numbers first.

As edmunds.com recommends, ideally, you should arrive at a list of three models that meet your requirements. Within this list, you can obviously create a ranking based on your personal feelings towards each model. Emotions do matter when buying a car, after all.

Only buy a car you can afford

If already our first suggestions appeared trivial, then the second may seem to be even more so: Never invest more money into buying a car than you can really afford. Just as with the question of what you need, however, this isn’t as easy as it may initially seem.

This is because deciding on what car you want and how much you are willing to pay for it are typically two closely related questions: You’ll clearly be willing to add a little more to the purchase price if it means you’ll get your preferred model.

To avoid this problem, the best solution is to first estimate how much you can afford, set a strict budget and to only then start searching for the best car within that price range. By no means does this preclude you from buying a great model. It does mean, however, that some things will be out of the question.

One important expert recommendation is to focus on mid-level models and to avoid the extras-laden top models which may add a lot of nice features to your car, but can easily make you lose sight of your real needs. Another thing to consider is that instead of going for the top model of a cheaper car, you can also buy the base model of a much better car.

After you’ve set your financial limits, your next step should be to consider how to pay for your car. Paying in cash is not typically your cheapest option (we’ll focus on that in an upcoming blog article) nor is it usually feasible for most buyers. Taking out a loan can be both your easiest and best option. However, you need to be very careful about how much money to borrow.

Recommendations from experts differ widely in this respect. While some still consider 36% of your gross income acceptable, edmunds.com insist the percentage should be 20% at maximum or even less.

If you’re strapped for cash, that latter number is probably your best bet, although the final decision may depend on the specifics of the deal.

Consider CPO & Depreciation

Once you’ve arrived at a list of potential used car models you’d like to buy and how much you can afford, you should now focus on the concrete details of your purchase. You’ll be pleased to learn that there are excellent options to still save a lot of money at this stage.

The first aspect is to take depreciation into consideration. This works in two ways:

• When buying a used car, as Moneysavingexpert have pointed out, you can get a great deal by selecting a car that is one year old. This is because depreciation is biggest over the first 12 months of a vehicle’s life span. Depreciation can be as much as 30% of the original price, even though the car will feel as good as new.
• When deciding on which car from your list to select, you should also take into consideration at what price you’ll be able to re-sell it. Here, depreciation again comes into play, as saving-expert Anna Newell Jones mentions: “If I had bought a new Toyota Tacoma in 2012, it would be worth about 61 percent of what I could sell it for today as a used vehicle, according to Cars.com. Compare that to the purchase of a 2012 Nissan Titan. I would be able to resell the vehicle for only 31 percent of what I bought it for. An extra 30 percent on an original MSRP of $20,000 would mean another $6,000 in my pocket when it comes time to sell the car four years later.”

Information on depreciation can easily be found online (for example in this excellent article by whatcar), so you should definitely take this data into consideration when selecting which model to get.

You should also take into consideration that all manufacturers overhaul their production line from time to time. Every few years, the entire build of a car is changed and improved. If you get a model from the first generation right after the implementation of such a change, you can benefit heavily from depreciation while at the same time reaping the benefits of the most up to date technology.

Another valuable recommendation is to consider CPO.

This is not a new fancy abbreviation from the world of IT, but rather a great way of buying a used car. The term stands for ‘Certified Pre-Owned’ and essentially means you’re buying a used car which has been completely refurbished by the manufacturer and comes with a warranty.

So, again, as with the one-year old model, you’re getting a car that is as good as new but at a considerably lower price.

Consider running costs

When calculating the cost of a car, we typically only take the purchase price into consideration. This is not entirely wrong, as this amount constitutes a huge lump sum payment and is often the biggest investment we make other than buying a house.

At the same time, the costs after you’ve purchased your car, from having it serviced to buying new parts and keep it running properly and in a good condition, can easily add up, In fact, repairs and parts are what most used car dealers make most of their money off! Add to this the recurring costs of car insurance and petrol, and you can quickly reach the limits of your budget.

This means that you absolutely need to take running/variable costs into consideration as well. This is even more true if the car you intend to buy is no longer covered by a warranty.

In practise, you should probably set aside a little extra money, as a ‘just in case’ fund to make sure you’re able to cover any unexpected future expenditures.

At the same time, you need not and should not take this too far. Granted, getting an ecology-friendly car can save you money in terms of duty. But even for a bigger, family-sized car like a Volkswagen Golf, the yearly amount you will have to pay amounts to a mere £30. All things considered, that’s hardly the deciding factor when getting a new car.

After all, even a used car will (hopefully) serve you for many years. So paying a few Pounds more to get the car you want can certainly be worth it.