A new shiny car. It’s the American dream that we have been sold on. But at the end of the day, a car serves as transportation gets us to the people and places that are important in our life.

Many people come up with excuses as to why they won’t buy a used car. They make claims that used cars are unreliable. Another fallacy is that you are just inheriting another person’s car problems when you buy a used car. In reality, buying a used car doesn’t have to be scary or risky. You just need to make sure you do your homework ahead of time.

After financing my last car purchase almost ten years ago, I made the decision to only buy used cars with cash. I didn’t want the burden of a monthly car payment to keep me from being able to invest and save more for my future or enjoy the things in life that I wanted. I value having the additional cash on hand to do what I want over having the latest and greatest vehicle.

So how can you prepare to buy a used car with cash? Here are some of my personal tips:

Start setting money aside now for your next car purchase. The only way to get out of the cycle of car payments is to establish a plan ahead of time as to how you are going to fund the next car purchase. It doesn’t have to be a large sum of money each money but consistency over time plus selling your current vehicle should allow you to purchase that next car in cash. Be proactive to break the cycle!

Think about what you need in a car – realistically. Choose a vehicle that is going to meet the needs of your lifestyle. Are do you have a long commute each day? Your top need in a car may be that it has high gas mileage, so you aren’t spending a crazy amount of money on fuel. Do you live in a rural area where traveling on snowy roads in the winter is a given? Four-wheel drive may be at the top of your list. Make sure the car you are planning to buy falls in line with your lifestyle.

Do your research on reliability and performance. It’s important to understand what you are buying – it’s a major purchase! You don’t want to end up with a vehicle that has had a history of mechanical problems that will end up causing you more issues and headache. Check out websites like Consumer Reports who independently evaluate numerous cars’ performances. They even publish a list of reliable used cars, so you can feel confident that you are not erroneously selecting a vehicle that notoriously a lemon.

Be willing to negotiate for a better deal. There are great resources for determining car prices. Kelly Blue Book has become the standard for pricing new and used cars. You can find out how much you would expect to pay for a particular make, model and year of a car based on its condition. You can also determine how much you can expect to sell your own car depending to whom you are selling the car – a dealership or private sale. Knowledge is power in a negotiation so if your go in having done your homework, you will be more likely to be successful in negotiating a fair price.

Have a trustworthy mechanic or knowledgeable friend or family member check out the car if you aren’t comfortable assessing its condition. It’s worth it to have someone look at the car for any major defects that you are not trained to look for. While it is not a 100% guarantee that you won’t have some repairs that will need to be made, at the very least, it ensures that what you are purchasing is sound.