While the great feel and overall pleasure of driving a brand new car is undeniable, it almost always makes more financial sense to buy a used car. If you've decided to buy a used car, you've already made a smart decision. You can get a car that's almost as good as a brand-new one, without suffering the depreciation that wallops new car buyers as soon as they drive the car off the lot. Used cars — even those that are only one year old — are 10 to 25 percent cheaper than new cars. But there are other good reasons to buy a used car:

• Buying a used car means you can afford a model with more luxury/performance.
• Lower purchase price
• Lower depreciation
• You'll save money on insurance and tax.
• Bigger bargains are possible for the smart used car shopper.
• Used cars are more reliable today than ever before.
• Some used cars are still under the factory warranty.
• Most new carmakers now sell certified used cars, which include warranties.
• Financing rates for used cars have dropped in recent years. So lower financing costs (in the form of fees and interest paid)
• If you buy from a private party, the negotiation process is less stressful.
• Buying a used car instead of a new one may be a better financial decision.

Besides less excitement, buying a used car (or keeping your current car) has a few downsides. The chances for expensive unwarrantied repairs are higher, reliability can be reduced, and major maintenance costs such as replacing the tyres, battery, brakes, and muffler may be on the horizon. New cars also tend to have more safety equipment and better safety records. True, you can't be the first one on the block with the trendiest vehicle. But your consolation will come with the knowledge that you got a great deal and made a smart financial decision. So read on, as we guide you along the road to used car happiness.

It's easy to overspend your budget on a car. Here's how to avoid getting in over your head.

Decide what you want to spend
It's always a good idea to start the car-buying process with a preliminary budget planning session to help you determine how much car or truck your money can buy—and how much money you feel comfortable about spending—on what is typically the largest consumer purchase after a house. Make sure you’ve accounted for insurance and other running costs. If buying on finance, work out your monthly outgoings and factor in the car’s running costs into the payments you’ll be making.

Research the Right Car
At the beginning of the car-buying process, many people already have in mind the car they want. But it's a good idea to stop right now and ask yourself: Figuring out the how much you want to spend was the easy part; now you have to find the vehicle that's right for you. The problem is you're not really sure what's out there or even what you want. Here is what we suggest.

Be flexible. If you're set on one model, in a specific color, with a certain mileage or specification you may find it hard to get a bargain as you're focusing on a narrow market. If you're prepared to consider something similar to what you want, you'll find a much wider choice available and it becomes easier to negotiate.

It's possible that you need to expand your horizons when considering what to buy. You might want to think of other vehicles in the same class. For example, if you are considering a Maruti Zen you should also look at the Santro, Indica or Corsa. These cars were built for the same market, but they often have different features at lower prices. Be certain the car you desire can accommodate your daily needs.

First, make a list of all the things you need your vehicle to do (haul kids, go off road, get good mileage) and then make a second list of all the things you admire in a vehicle (body style, colors, luxury options). You should end up with a list of qualities from which to eliminate models that won't work for you.