Buying a Used Car - The Ultimate Guide

Buying a Used Car - The Ultimate Guide


Choosing and viewing cars

Buying a car should be fun - you owe it to yourself to make it so, but, because of the amount of money involved and the potential of a problem rearing up, it can be downright scary.

If you want to keep it fun, though, you need a little know-how on your side. And that’s where comes in.

Counting the £s

First, you need to decide on your budget. If you’re borrowing to buy (as most of us are), you need to think about what impact the repayments will have on your bank balance each month. Discover the likely bills for insurance, road tax, fuel and servicing.

As a guide, a small family car, such as a Ford Focus or Volkswagen Golf, typically costs 60p per mile if you drive 200 miles a week. (figures from the AA).

Once you have that figure, spend plenty of time online to see what the market has to offer. Note which models are widely available and form a keen idea of what your budget figure gets you in terms of vehicle age and mileage.

Know your needs

Note that while cars from private buyers may often be cheaper, there’s less legal protection for you should a problem arise post-sale. You might also need to spend some money on the car early on to get into tip-top shape.

Narrow your choice down to a couple of models that’ll suit you. Go and see a few that are for sale to check that they’ll be right for your needs.

During your initial search, you should go prepared with dimensions and specification requirements - if the vehicle must regularly carry a pushchair or dog cage, for instance, take these along and check that they fit.

Once you’ve checked that your choice is right, stick with it. Sounds obvious advice, but we’ve heard too many tales of buyers needing a practical estate car but returning with an open-roofed, two-seat sportster ‘because they saw it on the sales forecourt and fell in love’.

You’ll be buying from four different types of seller: big dealers allied to one particular make; smaller, all-makes used-car traders; car supermarkets; and private sellers.

Car Auctions: the pitfalls

There are also car auctions. These hold the promise of low prices but you need to know what you’re about and they are very much ‘buyer beware’ because if you buy a duff car, the comeback available to you is so limited.

Big dealers offer good cars, strong warranties and full back-up post-sale. But their prices are higher, to reflect the pre-sales preparation they put into what they sell. There are also the overheads to pay on their posh showrooms, however, they’re excellent if you have enough to buy a young-ish car but not so good if you’ve £4,000 or less in the kitty.

All makes used car traders have more varied stock from near-new to less desirable older models and some sell cars costing as little as £1,000.

Quality of cars and back-up is less of a given than with larger dealers. Some are superb; but others are shoddy. Complaints about poor quality vehicles or slippery dealers topped the Office of Fair Trading’s log of consumer complaints last year and the majority of these related to smaller car dealers.

The little guys

Plenty of smaller dealers are honest, though, and stand by what they sell. When shopping, pick long established businesses that have a good reputation locally. Check this out by entering their names into your preferred search engine and stick with those that are approved by the local trading standards department. Contact your local council for more info.

Car supermarkets on the other hand offer huge choice and low prices. Some operate a no-haggle policy, meaning that the screen sticker price is always what you’ll pay. The level of service and aftersales back-up they provide varies and you may not get much of a specific warranty unless you pay extra for one. 

Whichever of these three you buy from, the transaction is covered by the Sale of Goods Act, which ensures your rights as a consumer.

If you buy privately and direct from the owner, however, this part of the law won’t apply and it’s pretty much ‘buyer beware’.

Taking a closer look

When viewing cars, pick a dry day and always finish before it’s dark. If you have the option, take a friend along for a second opinion. Never buy any car without seeing its registration document (the V5C), its owner’s book and service records and its MOT papers (if it is old enough to need them).

Always inspect the car out in the open and in good light. Take along a torch to peer underneath and wear old clothes so that you can kneel to inspect tyres and look for oil or coolant leaks.

Never buy without first driving the car and make sure that you are allowed to start it from cold. If the engine has been ‘pre-warmed’ for you, smell a rat. For now just remember to take your time, resist pressure from sales people and, if in doubt, walk away.

How not to buy a wrong ‘un

Most everyone in the car selling business is no different from the rest of us: they just want to do honest work and go home afterwards to their loved ones.

But, whether you buy a vehicle direct from its owner or from a dealer, it pays to be on your guard.

Whatever you do, be kind to yourself. Car buying demands time and patience, so never go when you’re rushed or on a deadline. Save it for a bright, dry day and finish before darkness falls. Common sense, really, but all the better for saying it, just the same.

Take along a friend or relative to give a second opinion and act as a witness to what’s said during the sale negotiations.

Trust your instincts. Nice people sell nice cars: so if the vendor is grouchy and turns aggressive if you ask a searching question, walk away. Same’s true if they’re too pushy.

Paperwork is vital

Check the documents before you begin to look at the car. That way you’ll not find yourself liking a vehicle that hasn’t the correct paperwork. Look at the registration document (V5C), MOT papers (if the car is at least three years old), owner’s pack and service records.

If the owner hasn’t a full set, or says any are ‘in the post’, go find another car that’s got all its papers.

When looking at the car, ask the seller to park it somewhere flat and away from other vehicles. Look at the space it has just left: are there tell-tale stains from leaking oil or coolant?

Look, too, at the gaps between the doors, boot, bonnet and the body. They should be tight and even. If they are bigger around one door than the other, then the car has had accident repairs – and poor ones at that.

Tyres, then fluids

Next, check the tyres. They should have at least 1.6mm of tread to be road-legal, but watch also for uneven wear, cracks or bulges. Patchy wear suggests that the car isn’t running straight.

Look under the bonnet and ensure that the oil, coolant and screenwash are nicely topped up. If you don’t know how to do this, take along a friend that does. Note however that the long life oil used in some modern engines looks black and dirty even when it is freshly changed.

Take along a torch and use it here to search for leaks from the engine or cooling system.

Inside the car, check that all the trim is complete. Look especially for missing small plastic bits that cover the seat frames and sills. If it is a hatchback – is the parcel shelf/luggage cover present? Look, too, to see if the spare wheel (or tyre inflation kit, if fitted) is all there, along with the jack and tools for changing a wheel.

Look at the seats and the roof lining: are they clean and stain-free? If you’re buying from a dealer, chances are that he’ll have used a cleaning agent on any marks, so those still showing may be there for good.

Remember, too, that cigarette burns or worn patches can be tricky and expensive to repair to a good standard. If you like the car even so, use them as a reason to bargain down the asking price.

Turn detective

Consider whether the wear evident in the cabin tallies with the mileage. Unfortunately, illegal winding back of the mileage total is too common on used cars and you must turn detective to spot it. Look at the condition of the rubber covers on the pedals but be aware also that worn ones can be easily and cheaply replaced.

Wear on the driver’s seat is a more reliable guide to high miles, however, as are tiny scratches around the outer handle on the driver’s door.

Check the ashtrays and cigarette lighter (if fitted) for signs of use – non-smokers’ cars are more saleable.

Feel the carpets in the footwells with the back of your hand for damp, which would suggest leaks from door seals, bonnet or the heater.

Ensure that the seats and steering column adjust correctly and that door mirrors operate. Turn on the ignition and try all the switches for windows, heating, what-have-you.

Warning signs

Watch the warning lights and ensure all come on with the ignition. Unscrupulous sellers may remove bulbs or even paint over lights rather than fix the faults they indicate. Watch particularly for the airbags warning, which should light for a few moments and then go out.

If air conditioning is fitted, check that it blows properly cold. And make sure that the heater works on all settings and that it will blow hot air on to the screen when you ask it to. Don’t forget the radio, USB connectors and Bluetooth connectivity.

We’ll deal with the test-drive in the next chapter of this guide. For now, make sure you are happy so far. If there are already too many niggles, the test-drive will prove a waste of time.

The Test Drive

This is where the crunch comes. The next half hour or so will decide whether you spend the biggest single amount of cash you’ll put on anything, except (if you’re fortunate) buying a home.

So it’s doubly important to take your time and to keep a cool head. From the off, we’d say, never buy any car without having driven it first.

And don’t settle for a quick spin around the block. You need to drive for half an hour, minimum and cover a variety of roads, from city streets to open through-routes.

Before you test-drive, ask whether the seller’s insurance covers you. If it does, sit in and get comfortable. Take time to adjust the seat, wheel and mirrors every which way until all are just so. Don’t forget to set the seat belt height, if the car will let you do this.

Are you comfy?

Check to ensure that you can reach the controls comfortably and set the heating and air con as you like it.

Next, start the car. It should fire up readily from cold and run smoothly. Get out , listen to the exhaust for noise from leaks and check the pipe for black smoke. A little pale ‘smoke’ on a cold day is probably just water vapour, which is okay.

If you have a friend or relative with you, ask if they’ll sit in the back, to listen for clonks (indicating worn suspension or a loose exhaust) or whining (from knackered wheel bearings).

Spotting problems

Drive using all the gears, including reverse, and notice where along its pedal travel the clutch ‘bites’. If it is close to the top, it may need replacing soon. The gears should shift smoothly, silently and easily.

With the car in second gear and on a slight hill, accelerate hard. If the engine speed rises faster than the car responds, the clutch is slipping. It will need adjusting or, probably, replacing.

Also, as you do this, watch the mirrors for a puff of smoke from the exhaust. This will signal that the engine is worn and requires attention.

Watch the temperature gauge (if one is fitted) for overheating and ensure that the speedo, Rev counter (if present) and other gauges work, along with the trip and total mileage recorder.

We’d advise keeping the radio/stereo off during the test, but switch it on momentarily to ensure that it picks up a clear signal, without crackle or distortion.

Be a passenger, too

If the seller accompanies you, ask them to drive for a few minutes. A short while spent as a passenger helps you to tune into the car’s comfort and also notice any worrying noises.

At the end of the trip, take another quick look under the bonnet and under the car to check for fluid leaks. Take a torch along to help with this.

Leave the engine running and listen for the electric cooling fan, which should cut in and run once the car is stationary for a while. As you’re waiting for this to happen, take a rag, ball it up and hold it momentarily over the exhaust pipe, taking care not to touch where it’s hot.

This will cause pressure to build in the pipe and expose any leaks it might have.

Second opinions count

Check with your companion: are they happy or did they notice anything you didn’t?

Sit back in the car, and check that every control and switch works. Be methodical and start at one side of the cabin, working across to the other. Don’t forget interior lights, including any reading lamps for rear passengers.

Ensure that wipers front and rear sweep cleanly and silently and that the washer jets pump water.

Turn the car off, wait a moment then switch the ignition on, checking that all the correct warning lamps come on. If the car has an indicator to say how many miles remain before the next service, note its total and see if that tallies with the car’s service history.

Look to see, too, that the seat adjustment controls for driver and passengers operate. If the rear seats fold, tug them out of position to check that the mechanisms function.

If all’s good, take a few moments to think. Is there anything else you needed to ask, or check?

If something’s not 100%, it may not be a deal-breaker, so long as the buyer is prepared to adjust the price to cover a fault. Don’t fall for the argument that he or she knew that the window/mirror/radio was faulty and had set the price to account for this. Any faults not declared upfront mean money off.

A quick call to the dealership should establish the likely cost of a repair – and it’s only fair that you add a little extra for your trouble.

Paying For The Car

You’ve made all the checks and shaken hands on the deal. The next step is to organise payment, but before you make that Bank's Automated Clearing System (BACS) transfer, consider your alternatives.

The first step for you is to offer something as a deposit, to seal the deal. Usually this is a modest amount, to show good intent. Car dealers will have their own requirements but anything from £100-£1000 may be requested, depending on the total transaction price.

A dealer will happily take this as a BACS transfer or on debit or credit card; a private buyer will usually expect to see cash. Don’t hand over a penny, though, unless you fully intend to go through with the purchase.

A deposit means a contract

We say this because, once the cash is paid, a binding contract exists. If you change your mind about buying, the seller is legally entitled to compensation for his time and expenses, so he or she may keep the deposit, leaving you to challenge this if you believe you’ve surrendered a fair reward for whatever inconvenience you’ve caused.

When you pay, ensure that you get a receipt that sets out what you’ve given, how much remains as a balance and a date to conclude the deal.

If buying depends on a loan the dealer is arranging, ensure that ‘subject to finance’ is marked clearly on the receipt. That way, if the dealer can’t raise the money on your behalf, you won’t be committed to buying a car you can’t pay for.

Cash can be king

If you are buying directly from the owner, he or she may want full payment in cash. A BACS transfer is often the preferred method as it allows the funds to go directly into the seller's account, rather than hard cash.

But dealers prefer bank-to-bank payments

If the sale is through a dealer, a BACS transfer is generally preferred. If they are arranging the loan, the funds will go straight to them once the lender agrees and you’ve signed the paperwork.

Most will prefer funds transferred directly via BACS. Money moved this way can take up to three working days to transfer, although if your bank belongs to the Faster Payments network, it should complete its journey the same day.

Alternatively, most will accept payments using a debit card, which are instant. While some will even take payments from a credit card, they may charge you extra for this. This is typically 2%, or £100 on a £5,000 transaction.

If you must do this, be sure to pay the card balance in full by the due date. Interest rates on cards are much more costly than most other borrowing.

Put it in writing

Once the money is moved and both sides are happy; ask the seller to provide a receipt showing what you have paid, details of the vehicle and the date. Keep this in a safe place because only this proves you to be the owner.

Contrary to popular understanding, whoever is named on the registration document (V5C) is the car’s keeper but not necessarily its owner.

The receipt is also valuable as proof of what you paid, should you ever need to claim on the vehicle’s insurance because it is stolen or wrecked.

Make sure spare sets of keys, the buyer’s portion of the V5C, MOT certificates, service books and any other bits and bobs are given to you. 

Taxing and insuring your just-bought car

So far, so good. You’ve successfully bought the motor you wanted. It’s in tip-top condition and the price was right. But there are two more things to tackle before you can start to enjoy it.

First, insurance. Many dealers now provide a week’s insurance on every car they sell, but we’d advise you to pre-arrange your own cover and not to rely on a third party.

You will also need to arrange car tax too, as this can no longer be transferred between owners.

Compare prices, then buy

When buying insurance, try the big comparison sites – go compare, money supermarket and confused – and also the big insurers that stand alone, such as Direct Line and Aviva.

All too often, consumers shop with the mindset that ‘cheapest is best’ but make sure, too, that the product you pick gives the level of service you need. If, for example, you really must have a loan car, should yours be away for repairs, check that it is included in the premium.

Watch, too, that you are comparing like for like. Is the excess payment (what you contribute to the cost of any claim) the same for all? And, just as important, can you afford to pay that excess if you have to?

Don’t skimp

However, don’t skimp on the cover you get. If you use your own car for business, then you need to be insured for this. Equally, beware policies that include services you may already have, such as roadside assistance for breakdowns, or legal expenses. There’s no sense in ‘paying twice’ for these.

When you’ve settled on a policy, pay for a year’s cover in a lump because monthly payments often come with a stiff interest rate that’ll add considerably to the bill. If you can’t pay upfront, borrowing from your bank may work out cheaper than the insurer’s instalment plan.

If you’ve already got insurance (from your previous car), you’ll need to transfer it. Some companies charge for this and may ask for extra cash because they rate your latest vehicle as belonging to a higher risk group. Haggle over the cost and they may reduce it.

If it seems too steep, consider cancelling it and buying elsewhere. However, if the policy has several months to run, you won’t see much of a refund. Most companies ‘front-load’ them to offset admin costs.

Vehicle tax

Let’s turn now to vehicle tax. You’ll need to tax your vehicle, but as you’ve just bought the car, you won’t have a V11 reminder, so you’ll need a green ‘new keeper’ slip instead. You can pay online for a quick and seamless transaction. One thing to remember is that, even if your car is exempt from paying vehicle tax, you must still tax your vehicle.

How much to pay

Unless the car is old (first registered before March 2001), the amount you pay depends on its exhaust emissions of carbon dioxide (CO2). ‘Historic’ vehicles – those made before 1 January 1973 – don’t pay tax.

There are 13 tax bands in all and here’s a list of what you should pay for each:

CO2 emissions (g/km)Diesel cars (TC49) that meet the RDE2 standard and petrol cars (TC48)All other diesel cars (TC49)Alternative fuel cars (TC59)
1 - 50£10£25£0
51 - 75£25£115£15
76 - 90£115£140£105
91 - 100£140£160£130
151 - 170£555£895£545
171 - 190£895£1,345£885
191- 225£1,345£1,910£1,335
226 - 255£1,910£2,245£1,900
Over 256£2,245£2,245£2,235

The prices above are correct as of March, 2022.

The DVLA also has local offices where you can obtain tax and, at time of writing, these remain open. The Government, however, has confirmed they will close as a cost-cutting measure.

If it goes wrong later

You have owned your car for a couple of weeks, but now it’s not running so well, there’s a funny noise that it didn’t use to make. Or worse still, it breaks down.

With something over 20,000 parts making up a typical modern car, there's plenty of scope for faults to develop, even though cars are now more reliable than they ever were.

Buyer beware

Unless the seller has lied to you about the car, or actively hidden major faults, there’s little you can do. By all means contact them and politely ask them to help pay for repairs: but be prepared for them to say ‘no’.

But if your vehicle came from a dealer, you’re protected by the Sale of Goods Act.

Briefly, this says that a car must match its description (in the advert, or from what the seller said about it), be of satisfactory quality, and fit for purpose. This last requirement means, typically, that if the seller told you it could tow a caravan of a certain size, and it can’t, you should see a refund.

Your rights spelled out

‘Satisfactory quality’ depends on the car’s age and price paid. A nearly-new, low-miles car should be fault-free (excepting any the seller might have pointed out to you before you bought). But a 12-year-old high-miler might reasonably be expected to have things wrong with it and so the law isn’t likely to help you much.

Complaints to the Citizens’ Advice Bureau helpline run higher for used cars than for any other type of goods. And most concerned smaller-scale dealers that trade in older cars. Big-name businesses tied to car manufacturers attracted fewer complaints.

Even so, most dealers of whatever size are fair minded and will respond sympathetically if you make a fair case and stay polite. If you have the car on hire purchase or using a personal contract purchase (PCP) scheme, you should also tell the lender of your problems, because they ‘own’ the vehicle until you’ve made the final payment.

If you ask them, they should have a word with the dealer on your behalf.

Repairs usually help

Repairs at their cost are the most usual means to put matters right. However, with many ‘Approved Used’ schemes, you have the opportunity within the first month to swap the car for another the dealer has in stock.

If the work done doesn’t put things right, be patient, and go back for another try. But, just for caution’s sake, start a diary listing your contacts with the dealer and record what was said by you and he.

Several attempts at repair later and if the car’s still not right, it’s time to request a replacement vehicle, or a refund.

If the dealer won’t oblige, then using a Civil Mediator from the Ministry of Justice may provide a speedy and cheap route to a solution. But both parties must agree and the total value of the case can’t be more than £5000 in England and Wales (£3000 if in Scotland).

Going legal

Perhaps the dealer won’t agree to this: what then? You can use the Government’s Money Claim online service, which can help you to obtain a fixed sum in compensation.

You can do this yourself (without hiring a lawyer) and the fees for using the service are reasonable at £100 for a sum up to £5000 and £210 for up to £15,000. If you are proven to be in the right, you should see this amount added to the compensation awarded.

However, if the dealer denies owing you anything, you may have to go before the small claims court. This deals with disputes concerning no more than £5000 in compensation. The court may decide on written evidence, without a hearing.

But if a hearing is decided on, you can represent yourself. If you do this, the judge will ensure that you understand the process fully and will explain any legal jargon used. Again you will pay a fee – usually around £200 – but you should see this repaid if your case is upheld.

It’s not unusual for the other party involved to agree to your demands before the hearing takes place and, provided that they do what’s expected and cover your costs fully, that’s a good outcome.


One route towards a solution the dealer may offer is the Arbitration Service offered by the Retail Motor Industry Federation.

While this service may give you a way out, it does have drawbacks. Be aware that it decides cases purely on written evidence. A trained arbitrator presides, but you can’t go see him to explain your case. What’s more, his decision is legally binding, so if you don’t like his decision, you can’t then take the matter before a court.

All of this may sound scary but it need not be, and, with goodwill on both sides, most issues are sorted quickly and amicably. Keep your cool and all should be fine.

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