Editor's note: This column has been updated in 2013.
Although the supply of used cars has thinned and prices have risen, you still can find deals. However, you need to do some legwork to make sure the car you're buying isn't a clunker. The June issue of Kiplinger's Personal Finance magazine offers these tips for ensuring that a used car is in good condition:
Get a vehicle-history report. Carfax's report lists ownership history, odometer readings, and any accident reports, flood damage or title fraud. The reports are free at thousands of used-car dealers; you'll pay $39.99 for one or $49.99 for five on the Carfax site if you're shopping private parties. The government's National Motor Vehicle Title Information System also gives information related to fraud and theft, including title and salvage data that are required to be reported by law. See a list of approved NMVTIS data providers.
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Get an inspection. It will cost you $50 to $100 and is worth every penny. Dealers should be used to this request and have a policy to deal with it. If you're buying from a private party, a smart seller probably won't just hand over the keys. Leaving your car or credit card with the seller may provide enough peace of mind, but the best compromise (and safest plan for both parties) is to meet at the mechanic's shop.
For strategies to get the best price on a used car, see Deals Available in Used Cars.