Before purchasing a used car, do your homework. It will save you time and money in the long run. Consider your budget. There are free resources online for researching models, options, costs, repair records, safety tests, and mileages.
You should always test drive the car under various road conditions—on hills and highways and in stop-and-go traffic—and do the following:
Dealers are not required by either state or federal law to give used car buyers a three-day right to cancel. Before you buy from a dealer, ask about the dealer's return policy, get it in writing, and read it carefully. Dealers may describe the right to cancel as a "cooling-off" period, a money-back guarantee, or a "no questions asked" return policy.
When you buy a used car from a dealer, the Buyers Guide must reflect any negotiated changes in warranty coverage. It becomes part of your sales contract and overrides any contrary provisions. For example, if the Buyers Guide says the car comes with a warranty and the contract says the car is sold "as is” (which means it has no dealer warranty), the dealer must give you the warranty described in the Guide.
When the dealer offers a vehicle "as is," the box next to the disclosure "As Is—No Dealer Warranty" on the Buyers Guide must be checked. If the box is checked but the dealer promises to repair the vehicle or cancel the sale if you are not satisfied, make sure the promise is written on the Buyers Guide. Otherwise, you may have a hard time getting the dealer to make good on his word.
You have two choices: pay in full or finance over time. Financing increases the total cost of the car because you are also paying the cost of credit, including interest and other costs. Consider how much you can put down, the monthly payment, the financing term (such as 48 months), and the annual percentage rate (APR). Usually, rates are higher and financing periods shorter on used cars than new ones.
If you decide to finance, make sure you understand the financing agreement before you sign any documents.
If you decide to sell the car before the end of the financing period, the amount you get from the sale may be less than the amount you need to pay off the financing agreement.
Repossession or Total Loss
If the car is repossessed or declared a total loss because of an accident, you may have to pay a considerable amount to repay the loan, even after the proceeds from the sale of the car or the insurance payment have been deducted.
With a gross purchase price of $4,000 or greater, the state sales and use tax rate is 6.5% (7% for Texarkana residents) of the taxable price of motor vehicles, trailers, and semi-trailers. Remember each year you must assess your vehicle with the county assessor’s office, and you must pay personal property tax each year to renew your registration and tags.