In the UK, over 7 million of the 30 million cars currently on the road are bought and sold as used vehicles each year. Recent DVLA studies show that each year around a quarter of all private motorists buy a used car, whilst less than 1 in 10 buy a new one; and after buying a house, it is usually the biggest purchase we make. If you are considering buying a used car, it is important to follow some basic precautions before parting with your money.

Firstly, it is very important to give the car a basic mechanical check, in order to ensure that there are no hidden faults and that the bodywork is sound. Look for rust around the sills and wheel-arches, seams, door bottoms and suspension mountings. Use a magnet to check for body filler on the vehicle's body panels. Also, check for oil or fluid leaks, damaged hoses and worn drive belts. Other checks include the door, window and sunroof for leakage and also examine the tyres - including the spare - for tread-depth and damage, such as bulges or cracks in the side-wall. If you are a competent mechanic, you can perform these checks yourself, but many reputable motoring agencies - such as RAC or AA - can also perform this check for you.

Conducting a search on the car's history can reveal whether the car has been reported stolen, written off by an insurance company or has outstanding finance still awaiting payment by the previous owner. There are several companies that can carry out this check, including HPI, Experian and the RAC. It's also wise to check the price of the car beforehand, just to make sure you don't pay too much. The internet can provide you with valuations of similar cars on the market, but you can also check with Glass' Guide on the valuation of vehicles.

Ensure the seller has a new-style vehicle registration document, known as a V5C. These have replaced the old style V5 vehicle registration documents, and you shouldn't accept these from the seller. Also, vehicles over 3 years old must have a valid MOT certificate.

You should also check that the condition of the car matches the stated mileage. Indications of high mileage include: shiny/worn steering-wheel or gear knob, worn pedal rubbers, excessive number of previous owners and a large amount of stone chips on the nose of the car. Also check that the screws on the instrument panel aren't loose, scratched or rounded as this might indicate that it has been removed in order to alter the vehicle's mileage - a procedure known as 'clocking'.

Another important check is to take the car for a test drive. Spend a little time driving the car and check the electrics, lighting and steering. Also check that the engine idles smoothly and that smoke is not expelled from the exhaust once the car has sufficiently warmed up, and that the brakes work effectively and don't pull to one side.

Buying from a dealer can give you stronger rights than you would have when buying privately, but it will also usually cost you more. When buying from a dealer, the car will usually come with additional warranty or mechanical breakdown insurance. Some dealers will also offer car insurance as part of a deal, but it is often a good idea to shop around to get the best insurance deal to suit your needs. For example, some insurance companies will offer better prices on newer vehicles, while others are better for used vehicles, young drivers or drivers who have had a prior accident.

With many factors to consider when buying a used car, taking the time to research any potential purchase can help you to avoid the pitfalls, save you money, and provide several years of happy motoring!