Stop and go: Buying a used car in 7 steps

STOP 3: You have two choices on where to buy: a dealer or a private party. Each has advantages and disadvantages.

Dealers are generally obliged by law to guarantee a car’s condition for a short period, typically 30 days, even if sold “as is,” says Mike Linn, chief executive of the National Independent Automobile Dealers Assn. Dealers can help you with any extras, such as insurance or tire coverage, as well as with taxes and registration.

There are two flavors of dealers: Those that sell only used cars and those that sell new cars as well. Experts say the latter are a better bet, as they have their own service operations and are less likely to go out of business. In 2007, new-car dealers sold 14.5 million used vehicles; used-only outfits sold 13.7 million.

Buying from an individual, on the other hand, often yields “the biggest bargains,” says Phil Reed, consumer advice editor at automotive website Edmunds.com. And because private parties aren’t the negotiators that car salesmen are, “it’ll be much less painful.” But there are no warranties, and it’s almost impossible to get your money back if problems arise.