11 questions to ask when buying a used car

1. How used is the car?

I don't even look at a used car that has over 100,000 miles unless there's a compelling reason — like, I want to take a crazy chance on a quite old Saab or Cadillac. Vehicles can go well past 100,000 miles on the odometer these days, but even with reliability legends such as Toyota and Honda, if there have been multiple previous owners, you can't know how the car has been treated.

Cars that have passed the 100K milestone are also apt to need major repairs, such as timing-belt replacements. Additionally, they could have small parts that are starting to wear out from age.

In my book, 50,000 miles is a good starting point. You can go 20,000 under or 20,000 over, depending on your budget and needs. You should also have a solid framework for what you want before you even get started. A midsize sedan, for example. That will prevent you from being distracted by fantasies about sports cars or pickup trucks.

2. Have you looked at the Carfax report?

The Carfax report is a document that's compiled by a service that's been around since the mid-1980s. You sign up for the most useful paid services, and then you can search for records on one or several vehicles (the latter option is good if you intend to check out a bunch of rides before buying — five reports will cost you $100).

Using the car's "vehicle identification number" (VIN), you can explore a prospect's automotive DNA: how many owners it's had, whether it's been in any reported accidents, whether the title is "salvage" (indicating a serious misadventure), and so on.

If you're shopping at dealerships for a used car, you'll usually get a gratis look at the report, or can ask for it. In my experience, the report is less valuable as a review of a car's history than it is as a means of finding out if a car you're interested in has major problems.

3. What's your budget, and is it flexible?

If you plan to buy the car outright from a private seller, then you need to determine what your lump-sum limit is. If you're financing, then the ballpark price is important, but so is your monthly outlay.

The last time I bought a used car, I decided roughly how much I wanted to spend in total and then gave myself a range for the monthly payment, because I wasn't sure how the financing would shakedown.

But I also decided to limit my upward wavering by just a few thousand dollars on the sticker price — that way, if I saw something that was a perfect fit, I'd end the search and simply buy the car. And that's what I wound up doing.

Keep your range narrow; if you're realistic, you should be able to find something that you'll be happy with.

What about haggling over the price? With a dealer, I'm all for it — within reason. They're typically going to have better-quality used vehicles, so trying to negotiate some crazy deal is pointless.

Interestingly, private sellers have often used internet sites, such as Kelley Blue Book, to arrive at with a fair value for their vehicle. You can often tell right away whether they've been honest with themselves about their car's condition. If what you see wasn't what was advertised, I think the best course of action is simply to walk away, rather than trying to hammer out some kind of deal.

4. Are you buying a certified pre-owned vehicle from a dealer?

CPOs, as they're known, are often vehicles that have come off a lease and have been reclaimed and spiffed-up by dealers. Buyers get a nearly new car that was probably well maintained and that has been thoroughly serviced — "certified" by the dealer and the original manufacturer.

CPOs also typically get a new warranty, providing peace of mind to antsy buyers.

CPOs aren't the cheapest used cars you can buy, but they are once-new vehicles that have endured that initial big-hit from depreciation and that were restricted on the mileage.

As such, they're an excellent bet and the next best thing to a new car.

5. Are you buying from a private seller?

In my world, buying from a private seller is fine if you either know the person or want to get a car that has some sort of coolness appeal. I once bought a car from a friend who had left the country, and I'm forever shopping for old Jaguars on Craigslist, eBay, and Autotrader.

Otherwise ... well, going this route is a lot of work. You need to prepare yourself for what could be months of searching. The process can be fun. But patience is you ally here. If you just want a car that isn't new, then it's better to go to a dealer.

6. Does the seller have maintenance records?

If the dealer leased the car and is selling it as a CPO, they should have the full maintenance history. If the dealer isn't selling CPO and perhaps got the car as a trade-in, they might have records if the previous owner provided them.

Otherwise, you're talking about a private transaction, and in this case, I wouldn't buy a used car that wasn't something exotic, vintage, or dirt cheap without some semblance of a maintenance record.

This is really more about the seller than anything else. Anybody who expects to sell a used car for a decent price keeps records. It's how the game is played. If a seller doesn't know that, they could have a good excuse — "I'm selling the car for my mom" — but if they don't, no deal.

7. All-cash — or financing?

With a private deal, you'll likely be asked to produce a bank check for the agreed-upon purchase amount, or to come up with a funded electronic payment before you can take possession of the car.

Of course, you can also pay cash for a CPO or a used car from a dealer.

If you finance, the dealer can work with you to find a lender. You can also organize your financing through a bank or credit union before you walk in the dealership door. In some instances, you can get a better interest rate this way.

You should also know where you sit on the credit spectrum before you undertake the financing process: a "prime" credit score above 620 on the FICO gets you better rates, but a "subprime" score shouldn't disqualify you.

You also have to decide if you want to finance a standard loan term of five years, or stretch to a longer term. That decision should be determined by what you want to spend each month, not driven by the desire to purchase a more expensive vehicle.

Finally, you should expect to pay a higher rate on a used car than a new car; and you should be prepared to make a down payment or 10%-20%.

8. Have you consulted a mechanic?

If you buy from a private seller, you could discuss bringing your mechanic to evaluate the car or ask if you can borrow the vehicle so your mechanic can make an assessment. Of the two choices, the former is more plausible. But then you need a mechanic willing to make house calls.

This approach shouldn't be necessary if you're buying from a dealership.

9. If you haven't consulted a mechanic, do you feel confident about assessing the car yourself?

You should look for any obvious signs of repaired damage, carefully study all four tires, look under the hood and fire up the engine so it can idle and you can watch for smoke or see any leaks. Investigate whether there's any rust (don't forget to peer into the spare-tire well). And when you test drive the car, listen for any weird noises and pay close attention to transmission shift if the an is an automatic and to how the steering and brakes perform.

Those are the absolute basics. If you lack confidence with any one of them, improve you auto education, ask a knowledgeable friend to join you, hire a mechanic, or buy your used car from a major dealership.

10. Have you taken care of all the paperwork and logistics?

At a dealership, you'll spend an hour signing papers, but the dealer should take care of everything. You should be concerned primarily with adding the car to your insurance policy and figuring out if you have an follow-on responsibilities with your state department of motor vehicles.

With a private transaction, you'll need to obtain the title to the car and then register it later. You'll also want to note if and when the vehicle needs to next be inspected.

11. Never overlook luxury.

My little protip for buying used cars is to start with CPO luxury brands, if your budget allows.

What you get in this market are cars with premium appointments and excellent build quality that have depreciated substantially from their new prices. They aren't necessarily better than used mass-market cars, but they're often nicer.

My suggestion is to start your search here: some of the best overall deals around are on three-year-old luxury cars.