The main areas that should be checked when buying a used steel guitar are the pickups and electronics, as any damage or bad wiring in these areas can affect the sound of the instrument. This can easily be checked by listening for buzzing or clicking noises when the steel guitar is played through an amplifier. Humbucker pickups are generally the best for steel guitars, as they minimize noise and feedback, so checking the make of pickups is also important.
Even the smallest nicks and body damage can affect the instrument's sound, and as secondhand steel guitars are certain to have had some use, examining the bodywork closely is recommended.
Playing the instrument can also give a good feel for overall condition. While playing can highlight any problem areas with electronics, it also reveals a lot about the overall sound of the steel guitar as well as how comfortable and easy the instrument is to play. Damaged or warped necks, for example, can often lead to problems with sustain, intonation and general comfort. These issues will often require repairs to rectify.
Checking the make and model of the instrument is also advisable. Some makers have a better reputation than others, meaning some instruments will be of a higher overall quality. Identifying the model before purchase can give buyers a good idea of how much they should be paying and what kind of quality to expect.