Check out this article from KBB.com. According to Kelly Blue Book, the sixth step to used car buying is to conduct a thorough walk-around.
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Step 6: Conduct a Thorough Walk-Around
A physical assessment of the vehicle is absolutely paramount before the purchase. Take your time and be thorough with your examination. While a private party may let you take the car to your own mechanic, a dealer may not be so obliging, insisting that his own mechanic perform the inspection. Don't let this stop you from doing some inspecting of your own. Again, if the seller objects or tries to belittle you for your effort, walk away. An honest dealer should stand behind every used car he or she sells, and there are plenty of good dealers out there.
Look for the following warning signs:
Signs of Poor Alignment
Check the tires for wear. Uneven tire wear -- balding on the sides or in the middle -- could indicate the need for a front-end alignment or a more costly repair to a suspension component.
Signs of Possible Body Repair
Bring along a small refrigerator magnet and place it gently (so as not to scratch the paint) along various body panels (lower door, front fender, etc.). If there is any plastic body filler present the magnet will not stay in place, indicating the vehicle has been involved in an accident. Stand away from the vehicle and look at its panels and seams. Does everything line up correctly?
Signs of Repainting
Open the trunk, hood and doors. Look for paint over-spray, a telltale sign all or part of the vehicle has been repainted. Now walk around the vehicle. Are all the body parts precisely the same color?
Signs of a Cracked Block
Check the radiator fluid. If it is foamy or has oil droplets in it, there is a good chance the car has a defective head gasket or, worse, a cracked block or cylinder head, any of which will cause the coolant and oil to mix together. If so, don't buy the car.
Signs of Flood
Reach up under the car and feel around the top of the gas tank. If you find mud or leaves up there, chances are the vehicle was involved in a flood or, in the case of a sport utility vehicle, taken off-road with some frequency. You can perform the same test inside the car by carefully reaching up under the instrument penal. If you find any signs of this sort of water damage, don't buy it.
Signs that the Vehicle is Not Local
Check the inside of the car. Look in the ashtrays and under the seats. Listen to the radio. If the buttons are all set to stations in another area, you know the car is not local.
Signs of Driver Abuse
Look at the condition of each foot pedal (gas, brake and clutch). Do the rubber footpads show heavy wear? If the steering wheel is leather, does it show excessive wear? These patterns on a low-mileage car may indicate that the vehicle has more mileage than the odometer indicates. Trust your sixth sense on this one. If you feel the odometer has been tampered with, don't buy the car.
Contact the Manufacturer
If everything checks out and you feel you have a good deal, do yourself one more favor. Contact the manufacturer. If the car you are buying is a late-model vehicle, find out what the warranty stipulations are.