Buying a used car as opposed to a brand spanking new one is not only more affordable, but usually also a much better investment.

A new car can lose up to 30 percent of its value in the first year alone, and insuring a new car is bound to cost you far more as well.

Of course, it’s true that it’s more difficult to know exactly what you’re getting when buying a used car, especially when dealing with private sellers.

But if you know what to look for, you can still end up with an excellent used vehicle that will last you for many years to come.

Here are five important steps to take when looking for a used car that meets your needs and doesn’t break the bank:

1. Narrow down your options

Once you’ve determined how much you can afford to spend, it’s time to start narrowing down your options. There are a few things you should consider including; how long your daily commute is, how many passengers you’ll need to carry, whether or not you use car seats, how much cargo capacity you’ll need, what sort of driving you do and the safety features you’ll want.

Once you’ve compiled a checklist, you can start short listing vehicles based on their price, fuel efficiency, space, safety features, 2WD or 4WD, and anything else you consider important. Car review sites are also useful for finding information about any specific vehicles you may be interested in.

2. Buying privately vs through a dealership

Weigh the pros and cons of buying privately or through a dealership and then decide which option is most appealing to you. One of the biggest differences is that with a dealership you’ll usually have the safety net of a warranty, but the price tag will almost certainly be higher to cover the auto dealer’s overhead costs.

Online classified ad sites like Gumtree can be excellent for finding used cars from both private sellers and auto dealerships in your area and will also provide you with advice on safety certificates and other important considerations like how much you should pay.

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3. Visually inspect the vehicle and ask plenty of questions

It’s best to view potential cars during the daytime, as natural lighting makes it easier to assess the vehicle’s condition and spot any flaws.

Important things to look for include rust spots, scratches or dents as well as oil, tyres and alignment.

The car’s history and present condition is important, so don’t be afraid to ask questions. Some of the most important questions to ask include why it is being sold and how many previous owners has it had. Also ask to view the car’s service records to ensure it has been properly maintained.

4. Take it for a test drive

If you’re satisfied with the vehicle’s outward appearance, it’s time to take it for a test drive to see how it handles. Start the car from cold and pay special attention to the brakes, clutch, suspension and seat comfort, as well as ease of steering and acceleration.

Test it both on the highway and in the city so you can see how it accelerates into traffic and whether it drifts to any one side when you let go of the steering wheel. An overly bumpy ride may indicate that the vehicle needs new shock absorbers, while any squeaking when you brake could means the brake pads are worn.

5. Hire an independent mechanic

Some issues may be difficult to spot on your own, so if you’re fairly certain that you want to buy a particular vehicle, you should always hire an independent mechanic to do a final inspection.

This will likely cost you an extra one or two hundred dollars, but it could save you thousands in the long run.

After inspecting the vehicle, your mechanic will be able to tell you how much any immediate repairs or maintenance will cost you, and if you still want the vehicle after this, you can use the information you gleaned to negotiate a better price.

If the owner or auto dealer tries to talk you out of taking the car to a mechanic before negotiating a price, there’s a good chance that they’re trying to hide something from you.

Do you have any more tips to add to this list? Please share below.

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