Step One - VIN code
The first thing you should do is right down the VIN number of the car. This can be found by looking through the windshield at the top of the dash on the driver’s side of the car. It is a small plaque that is about 3 inches wide. The VIN number will allow you to do a search on a site like CARFAX.com. This search will reveal any major issues that have been reported by a service station. If you are on a dealership lot ask them to do it for you.
Step 2 - Check OIL
The next step in evaluating a used car for purchase is to check the oil. Oil is the life blood of a car and this will give you a great indication of the maintenance of the car. An oil dipstick can be found under the food of the car and will usually have the word OIL wrote on it. Pull it out slowly and hold it flat horizontally. You are looking at two items here. The first is the amount of oil. The oil level should be within the cross hatched patter that is printed on the stick. The next is the color of the oil. If it is almost clear than the oil was changed recently. If the oil is a light brown color then it is still within its useful life. If the oil is black then it needs to be changed. This can be used as a negotiation point.
Step 3 Engine
The next step in the used car checklist is to check the engine. This is something that can be done by anybody. If the car is parked in its slot then look under it for any leaks. Green = Coolant, Brown/Black = Oil, and Red = Transmission. This is something that will help you determine the maintenance on the car and what work will need to be done in the future. If the car is was pulled up to the show room you can ask to see where the car was parked. This should not be a big deal and if the salesman is hesitant, it can be a sign of a problem.
You will also want to check the coolant overflow bottle. Make sure the car is not hot and you will be fine to remove the cap. The coolant should be a bright green or orange in color. If it is not one of these colors, the car will need a coolant system flush. If there is any oily residue floating on top of the coolant in the bottle then there is a good possibility of internal engine damage. Walk Away.
The next step in the engine portion of this is to open the hood and look at all the belts and hoses that are visible. You are looking for cracks, splits and leaks. These should be flexible and not brittle. Do not be afraid to grab a hose (careful to check to see if it is hot) and move it around a little bit. You want to see if a crack appears in the hose as it is flexed. This is a sign of an old hose or belt.
Finally you want to inspect the overall cleanliness of the engine. If the engine is very greasy, especially at the bottom, you will want to ask for maintenance records. A very greasy engine is a sign of old wore out parts that should have been replaced. If no record of gaskets or leaks being fixed is found than you should stay away.
Step 4 Transmission
This is a very important step in the used car buying process. If it is an automatic transmission you will need to check the fluid level and smell. If it is a manual transmission than you will need to drive it around for at least a half hour in "stop and go" traffic to make sure the clutch and gears are all okay.
Automatic transmission check. You will need to ask the salesman to start the car and place it in park. Then you or the salesman will need to find the transmission dip stick. Some are easy to find others are very hard to find. It should have a red cap on it. Pull the dipstick and hold it horizontally. Wipe it clean and put it back, hold for a count of three and pull it back out. This will ensure a proper level check. Then you must ensure that the fluid is within the cross hatched pattern on the stick; If it is over or under than there could be a transmission problem. Next take a quick smell of the fluid on the stick. If it smell burnt than there is a good possibility that of transmission damage.
Step 5 The final overall
This will be an overall inspection of everything missed. The first item on this list to check the "panel gap" You will want to check the distance "gap" between all of the body panels on the outside of the car. I like to start with where the driver’s door meets the front fender. This gap should be about the same from top to bottom and it should not change very much in distance. If it is very close (within millimeters) at one end and very far (inch or more) at the other than the car was in a wreck and was not repaired properly. This gap needs to be checked at the doors, hood, trunk, and any other seem you can find on the outside of the body. Do not be afraid to ask questions.
The next is the interior wear vs. millage on the car. If the car only has 20,000 miles than the seats should look almost new and the brake pedal rubber will not have any wear. This is something that requires some critical thinking. If the car has over 100,000 miles than brake pedal rubber wear should be noticeable as well as driver seat wear.
Do not be afraid to ask questions of the person selling the car and do not be afraid to walk away from the deal. If a car is priced to good than be suspicious. There are millions of cars out there and you will find another one. Using this method has helped me find the best deals in used cars as well as avoid expensive repairs.