7 key steps to buying a used car

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Buying used cars rather than new ones can save you hundreds if not thousands of dollars on your next vehicle.

According to Edmunds.com’s True Cost to Own calculator, a new 2009 Corolla sedan with an MSRP of $15,350 will depreciate $3,619 in its first year, and $6,247 during its first three years. That means it will lose 41 percent of its value after just three years. A $20,430, 2009 Ford Mustang will depreciate $10,353, or 51 percent, over its first three years.

Buying used means someone else shouldered the pain of the initial depreciation, but it also means you have to spend more time in the research phase to minimize the chance you’re buying someone else’s problems.

There is no foolproof method for ensuring the used car you’re buying doesn’t have some serious defect lurking beneath the surface. However, you can significantly reduce your risk by following these steps: