The average yearly cost of car ownership is $8,500. This includes; financing, registration/license fees, insurance, and gas. Don’t let that number scare you though, there is hope.

As a disclaimer, in order to get the most out of this guide you will need to re-think how cars are perceived;  they are a necessity, not a luxury.

The following steps will show you how to save money on your used transportation needs. That’s right, used cars only in this article. Buying used and paying in full, upfront, is the most cost effective way to purchase a car. So, without further ado, here is your guide to buying a non-financed used car.

Start a car fund.

We recommend buying outright. This means fitting a car purchase into your budget. Cut out any unnecessary spending and start a car fund. Here are some great Personal Finance Spreadsheets from Google Docs to get you organized.

The key to this step is learning how to live with what you’ve got. Keep driving that clunker until it stops running, find a spare car from friends or family, even utilize the company car. Be prepared,  saving up to buy a car outright will not be easy, it requires sacrifice, persistence and some luck.

Don’t start looking for a car until you have almost all of your money saved up. Don’t tempt yourself. If you find that amazing deal and buy on credit, then all hope is lost. You need to remember why you set out to do this; to never have a monthly car payment again.

Research. Research more. Then, research again.

At this point, based on the amount of money you’ve saved up, you’ll want to start looking for a car. Use websites like Kelley Blue Book Online, Auto Trader, and Consumer Guide’s – Used Auto for actual values and reviews on reliability. This will also help determine if you’ve saved enough money to buy the year and make of a car you’re interested in.

Lastly, if you have a mechanic you know and trust, ask his/her opinion on certain cars they’ve worked on that they think are the most reliable.

Stay Organized and Compare Cars.

Start a folder. Keep all cars that you’re interested in inside of this folder. The websites you went to on the tip above will help. Next, start a comparison sheet to help you find out which car is the best. Keep them organized by price, mileage, year, special features and contact information of the seller. Once you’ve narrowed it down to only a couple of cars, your job will be much easier.

Ask the right questions, save time and money.

At this point, you’ll want to put that contact information in your folder to good use. Here are some good questions to keep in mind when calling about the car you’re interested in:

• Is the car still available? (Obvious, but this should be the first question you ask.)
• Are you the original owner? If not, how many previous owners have there been?
• What is the reason you’re selling your car?
• Does this car have a clean title? (Make sure it is not a salvage title, you don’t want a car that has been in an accident or stolen. A lot of people will buy these cars at auctions, then fix them up and re-sell them.  Usually a big no-no when it comes to reliability.)

This is a good step to take before you actually see the car in person. You get a good sense of the owner and the car without having to make the trip out to see them. Your next step, before meeting up face to face with the seller, is to arm yourself with as much info for negotiating as possible.

Visit Kelley Blue Book Online and keep the prices of the car you want in mind. If someone is selling a car for $10,000 and you see it listed on KBB $ 8,000, chances are you can get them to drop their price. When you feel confident in all of your research, it’s time to meet with the seller and inspect the car.

The Meeting and The Inspection

Once you find the car you’re looking for, set an appointment with the seller. Here are a few things you should keep in mind for the meeting:

1. Bring a folder with all the info you’ve gathered in your research, a pen, and something to write on.
2. Meet with the seller during daylight, this helps you to notice anything wrong easier.
3. Write down the VIN number, (located on the driver’s-side dashboard, underneath the windshield) you can enter this in a website like CarFax to see the history of the car.
4. Check transmission fluid. It should be reddish and slightly transparent. If it smells burnt, it needs a transmission fluid flush. ($40 – $300)
5. Check the oil. Golden in color is good. If it’s color is black, this means the seller hasn’t had changed the oil in a long time, this is a bad sign.
6. Bring a mirror so you can check under the car for any leaks, dents, or scrape marks.
7. Bring a cloth and magnet. Place the magnet over the cloth. If the magnet sticks in some places, but not others, it means the car has probably been fixed with Bondo, or some other type of filler material. The car has been extensively repaired. Avoid it.
8. Check the tires for any noticeable and uneven wear, if so it means the alignment is probably out. This is a very expensive repair.
9. Bring a dollar bill. Go around to each door and hang the dollar bill outside of it. Close the door. If the dollar bill slides out with ease, the car has most likely been damaged.

For much more information on used car inspection you can go to samarins.com How to inspect A Used Car – An Illustrated Check-List.

Since you’re face to face with the owner, here are some questions to ask:

• Ask for the maintenance record.
• What is the service history like?
• Has it been driven off-road, on the highway, around town?
• Ask to see the title. If it’s a salvage title, and you don’t mind driving one, you can negotiate for a much lower price.

Once you’ve asked all the questions you need, you should ask to take the car for a test drive. While driving, listen for unusual noises, such as clunking over bumps or squealing when turning the steering wheel. Also check if the car pulls severely to the left or right, if so, it has an alignment problem.

Once the inspection and test drive have been taken care of, arrange for your mechanic to look at it. This costs about $80, but a professional opinion could save you thousands of dollars in repairs down the road.

Negotiation 101

Once your mechanic has given your potential new ride his approval, it’s time to start negotiating with the seller. Don’t be the first to offer a price. Go over anything your mechanic may have found, then ask the seller what their best price is. If you did enough research, and looked into the marketplace, you can counter their offer.

Don’t let your emotions get the best of you. If you show your excitement for the car, you will be at a disadvantage. You need to come with the facts, and try to be as removed as possible. Remember, most people selling their car will not put down a reasonable offer.

The Final Steps

Once the purchase has been made, you need to remember to ask the seller for these things:

• Owner’s Manual
• Service History
• Registration
• Handwritten Invoice
• A minimum of 2 sets of keys

Hit The Road, Jack

Well, you’ve got your new (used) car, and we hope it gives you many years of great reliability. We hope this guide helped you in your quest for the best car for your money. If you have any suggestions, stories or questions, please feel free to comment below.

Tips on saving you money for that next trip to the mechanic, plus a website that gives you unbiased quotes on your repairs!

Lets face it, sometimes you can be over-quoted on repairs when you visit a mechanic. I just had this happen to me recently, what was supposed to cost only $300 in the beginning, ended up costing roughly $1,200 in the end. This may not be the case with every mechanic, but if you ever find yourself in a situation similar to this one, the best thing you can do is go in prepared.

The most obvious tip to saving money on car repairs for is preventative maintenance, but at what point do you change your oil? Is it better to put premium gas in my car than regular gas, who has the best deals on preventative maintenance?

How often should I change my oil?

A lot of people seem to be sort of confused on how many miles you should drive before getting your oil changed, and there are even some tactics companies will use to scare you into getting your oil changed when it’s not needed.

In the early 70′s there was a Jiffy Lube campaign stating that you needed your oil changed every 3,000 miles, this is a little excessive, but a good starting point to know when it’s time to get that oil changed. The average American drives about 12,000 miles a year, so at about $25 an oil change, $100 a year is a small price to pay for something much worse happening later on.

Is premium Gas better for my car than regular gas?

If you put premium gas into a car that recommends regular gas, the only difference you’ll notice is that you have less money afterward. According to the American Petroleum Institute, premium has higher energy content, which can give better gas mileage, but the difference is so minute, it’s hard to notice any advantage to doing this.

The mid grade fuel just has  a higher hesitance to combustion, which means that on some super or turbo charged car, mid grade fuel can arguably give a slight advantage to reducing engine damage. What it all really comes down to, though, is making sure that you put whatever fuel is recommended for your specific car. If it says to put premium in there, you have to use premium, if not, then stick to regular grade gas.

Where can I find the best deals on preventative maintenance?

When it comes down to getting your oil changed, car checked up and any other over preventative auto maintenance I would trust some of the bigger names. Midas has a great function on their website where they allow you to search for coupons you can clip out on their site by entering your zip code.  Jiffy Lube has an instant $5 off coupon when you bring your car to get serviced by them.

If you’re a real DIY’er you can always perform any of these maintenance procedures yourself, but please DO NOT attempt any DIY work on your car unless you feel you can really handle it. Overall, though most big name places are usually having great deals and have good service for keeping your car all tuned up.