There's no getting around it: it often makes far more financial sense to buy a pre-owned car as opposed to one that's brand-new. A new car will begin to depreciate in resale value as soon as it's driven off the lot, and regardless of whether or not you manage to negotiate that sticker down, you'll still be making payments on that initial new price. A used car, on the other hand, has already depreciated itself for you and will thus cost thousands less.

However, one must be careful in choosing a pre-owned car, as there are risks. There's an old, old saying that goes, "When you buy a used car, you're buying someone else's problems."

This isn't necessarily always going to be the case, but it certainly can prove to be true if you don't know how to check that car out. To avoid unpleasant surprises after the sale has been finalized, a thoughtful and thorough inspection is highly advised. Questions need to be answered. Here are just a few:

How often and how was the car driven? Are service and maintenance records available? Has the car ever been in an accident? What work, if any, needs to be performed on the car right now? Does the car have a clean, clear title? Here are a few more tips on how to make sure you don't end up worse off down the road.

Inspect the outside 

Even before getting situated behind the wheel, a visual inspection is of utmost importance. Does the car's age match its appearance? For example, if you're looking at a three-year-old vehicle, a few minor nicks, scratches, or door dings are to be expected, but it should still have glossy paint, be rust-free, and have an unabused interior. If a car that new looks like it has been sitting in a field since Ronald Reagan sat in the White House or it was excavated from a swamp, steer clear. When looking for rust in particular, check the underside seams of doors and trunk lids, because these places are usually where corrosion begins.

Check the engine

The engine compartment won't necessarily look like it did when it first rolled off the assembly line, but it shouldn't be caked with dirt or (especially) oil residue, either. Check hoses and belts for wear, such as cracks and tears. Pull the oil dipstick out. Is the oil clean and up to the safe level, or is it as black as road tar? The latter could indicate the previous owner was lax in keeping oil changes up-to-date. If the oil on that dipstick has a whipped-cream appearance, don't just walk away from the car. Run! This indicates water in the crankcase, most likely caused by either a cracked cylinder head, engine block, or a blown head gasket.

Also look for small metal shavings. If parts are wearing out from a lack of sufficient lubrication, this is one location where it can easily be seen. If the car has an automatic transmission, check the fluid level on that dipstick as well as the color. It should have a reddish/pink hue. If the fluid is dark and orangish in color and has a burnt smell, that car probably has transmission issues. Finally, place the blunt end of a screwdriver directly onto the alternator and your ear to the handled end. Do you hear grinding or a steady hum? If you answered grinding, that alternator is on borrowed time.

Check the tires

Does the tread match on all four of them, or are they worn just on the edges? In the case of the latter, this could be a sign of improper alignment. Run your finger just inside the rear exhaust pipe. If it's a bit black from carbon, this is no cause for concern, but if it looks like you just ran it through a full ashtray, this could indicate excessive carbon buildup, a misfiring engine, or both.

Now it's time for the test drive

Does the engine start effortlessly and run smoothly? Listen for any unusual sounds, such as grinding, excessive wind noise, vibrating, or screeching. Even if you are not mechanically inclined, you should know that such noises are not normal and suggest that something is wrong. Test every electrical component, such as the sound system, GPS (if equipped), air conditioner, heater, defroster, turn signals, and lights to make sure they all work. Check the brakes and steering. If the brake pedal grinds, pulsates, or goes all the way to the floor, or if the steering seems too loose or difficult, you should probably shop elsewhere. Take the car up to highway speeds and note any vibration, especially in the front end. If vibration is present, this could range from something as simple as unbalanced tires to thousands of dollars in suspension work.

If that car you're interested in passes all of the tests listed above and the price is right for its age and/or mileage, you very likely have a winner. If not, keep looking. There are lots of used cars out there. Perhaps the most important thing to consider is as follows: Prior care and upkeep on the part of the previous owner can make all the difference between a nightmare and a wise investment.