Shop used EVs—preferably before Sept. 30. Buyers looking for all the modern bells and whistles at a truly cut-rate price should consider an EV. Electric vehicles face the steepest depreciation of any type of vehicle, losing an average of nearly 59 percent of their initial value over five years, a recent iSeeCars study found. EV production outpaced demand in the past few years, so even used models that are still covered under factory warranties are often priced to sell. But our experts say that great prices can often signal reliability concerns or other issues. Always look at reliability and other key data before committing to a purchase.
Tax credits and other incentives can make EVs an even better deal. Buyers can save up to $4,000 on EVs priced under $25,000 through a federal tax credit, but this will be discontinued on Sept. 30, 2025. Other state and local incentives for purchasing a used EV may still be available even after the federal tax credit goes away, so it’s always worth checking with your local authorities or your power company to see if there’s more money to be saved.
Prearrange financing. Figure out your budget and get financing based on what you can afford to pay monthly and as a down payment. It’s always a good idea to secure financing through your bank or credit union before going to a dealership to look at cars. That way, you have a baseline you can compare with dealer financing offers, which may or may not be as good a deal.
As always, setting up financing for a private-party sale is a little more difficult. You’ll need to have the funds secured and ready to pay out so that you can buy a car quickly if you find one that’s reliable, fuel-efficient, and meets your other needs.
Cast a wide net. Prices outside your area may be better. You can find a good variety of used models on websites like TrueCar, operated by a CR partner, and through Consumer Reports’ Used Car Marketplace. Expand your geographic search if you need to. Be cautious about searching too far from home, though. You want to be able to go see any car you’re considering buying and test-drive it before signing a sales or leasing contract. This is especially true for used cars. And you don’t want the car to get scooped up while you’re traveling to see it.
Do your research. Whether buying new or used, consult Consumer Reports’ road tests and ratings, looking closely at reliability, owner satisfaction, and safety. Make a short list of contenders to test-drive, and have a good understanding of the various trim versions and available features. Print out information on the models you’re interested in from CR.org and manufacturer websites to take along with you.
Buy something reliable. If you can’t find a newer used car within your price range (including financing), you may find yourself looking at older models that you wouldn’t otherwise have considered. CR recommends taking any used car to a reputable mechanic to have it inspected before buying it. (If the owner or dealer balks at this request, you may be better off looking elsewhere.) You can also consult CR’s predicted reliability scores to make sure you buy something that’s not likely to give you problems later.
Be willing to compromise. If you have to buy an older car, some of the features you want—whether those are advanced safety and driver assistance features or connectivity—might not be available. Decide which are absolute must-haves, and be flexible on the rest. Do prioritize safety, comfort, efficiency, and reliability, because satisfaction with those may mean you’ll be happy to keep the car longer. As always, you’re more likely to find deals among less sought-after models like small sedans and front-wheel-drive SUVs, while larger SUVs and pickups tend to sell more quickly despite being more expensive.
Don’t borrow too much. Put as much money into a down payment as you can afford. This is good advice in any economic climate. Maximizing your down payment will reduce the amount you have to pay in interest on the rest and minimize the chance that you’ll be left hanging with more debt than equity as your aging car’s value sinks over the years.
For example, if you have to borrow $15,000 for a used SUV that will be worth less than $10,000 in a year or two, you may end up “underwater,” or owing more than the car is worth, especially with the average interest rate on a used-car loan at roughly 12 percent. If you crash the car or if it’s stolen, you’ll still have to make payments, even though you no longer have the car.
