How to Avoid Getting Ripped Off When Buying a Car

Decide if pricey options are important to you before you set foot in a dealership.

Many people buy their first car while in college. We all know that tuition rates and college life in general aren't cheap, and more often than not students are strapped for cash. Keeping these simple tips in mind may help you save a few bucks when you step into the car-buying process for the first time.

Decide on a Price Range Before Looking

While this tip can help you when buying either a new or a used car, it applies more to new. If you're buying a used car, sellers only have what they have, so it's harder for them to persuade you to opt for more upgrades or a more expensive model.

If you're at a dealership looking at new cars, though, the salesperson will try everything in his or her power to get you to buy a nicer model with leather seats, chrome wheels and more gadgets than you need. So before you visit the dealership, decide what options are important to you and which ones would simply be nice to have, and set a cap on how much you're willing to spend. When you're in a car-buying mood and looking at all the new models on the lot, it's easy to get talked into something a little flashier for a few more bucks, without thinking about how it might hurt your wallet.

Decide What to Do With Your Old Car Before You Buy a New One

Everyone knows that trading in your car usually doesn't get you as much money as selling it to a private buyer would, but each method has its disadvantages. If you decide to sell your old car on your own, you may be able to get more money for it, but you'll probably have to spend time meeting with potential buyers.

What if they test drive it and don't come back — or wreck it? Do you have insurance coverage for that? What if they write you a bad check? What if you can't sell it for a long time?

Trading in your car avoids these issues and guarantees it'll be off your hands right away, but, as mentioned, you probably won't get as much money that way. Yet another option is donating your car. This isn't a great idea if your old car is only a couple years old, a classic or otherwise still worth a substantial amount of money. But if it's an older vehicle that isn't worth a lot, the tax break you'll get from donating it might be as good a payoff as you'd get from selling it or trading it in.

Consult a Mechanic About a Car Before Buying It

This is important particularly when buying a used car. If you're not much of a gearhead and are unsure whether a certain car is in good shape for its price, find a local mechanic or friend who can help you make the decision. They may be able to tell you over the phone that a certain car model is known for specific problems, but it's best if they can take a look at the car in person.

Mechanics know what to look for in terms of broken or worn parts, leaks, noises and other mechanical defects, and can shed some light on the few "simple fixes" the seller may have mentioned in passing.