To
successfully buy a used car involves taking the proper steps and
precautions to insure that you avoid mistakes and get a car you
will be happy with.
Select
your car
The first step in buying a used car is to decide on a specific make,
model, and year you want. Or at least narrow down your list to a
small number of top candidates.
It
would also be useful to decide on the major options that are most
important to you: automatic transmission versus manual, 4-cylinder
versus V6 or V8, power seats versus manual, etc.
Preplanning
and narrowing your selections will allow you to focus your research,
pricing, and shopping efforts. It will make the process less confusing
and will use your time more efficiently.
One of the best sources of used cars online is eBay
Motors. There are literally thousands of cars being
sold at any one time. You can search by make and model, by price,
and by area of the country. It's a great way to shop for a used
car. eBay also provides inspection services and buyer protection
services to make it as safe and risk-free as possible for buyers.
It's
personal
Vehicle buying is a very personal experience. As such, it is almost
impossible for anyone else to tell you which vehicle you should
buy.
What
are your priorities and preferences? Make a list of the things that
are important to you, ranking them from most important to least
important. Your list might include some of the following:
Reliability
/ Dependability
Safety
Rating / Features
Price
Styling
/ Appearance
Comfort
/ Luxury Features
Performance
Operating
Costs
Insurance
Costs
Also
consider how you intend to use your vehicle. Will it be a family
vehicle, or a personal vehicle? Will it be driven by multiple family
members for different purposes? Will it need to carry cargo or more
than four people? Will it be used to commute to work? Long distances
or short distances? Highways or city streets? Severe weather conditions
or not?
Do
you want your vehicle to reflect your social, professional, or financial
status? Do you view your vehicles as recreational and fun to drive?
Or do you view them simply as being necessary to get you from Point
A to Point B? How much time will you spend in your vehicle?
The
answers to these questions will help you in prioritizing the characteristics
of the vehicle that will best fit your needs. If you are new to
buying cars, the First
Car Guide web site may help you.
Research
your car
Once you have your list of requirements, the next step is to identify
the vehicles that match those requirements.
Fortunately,
there are many resources available to help you — both in printed
form and online on the Internet.
One
of the best print publications for used car buyers is Consumer
Reports magazine. Each year in April, CR publishes
its Annual Auto Issue which contains not only ratings on
new cars, but on used cars as well. CR also publishes a Used
Car Yearbook which comes out in the Fall each year and contains
more extensive evaluations and data.
Consumer
Reports also has an excellent web site with the same used-car
and new-car information online at ConsumerReports.org.
There's a fee charged to access most of the data, but it's well
worth it.
The
highlight of CR's used car data is its "The Best and Worst
Used Cars" feature. In it they tell you which vehicle makes/models/years
have the best and worst reliability, based on their research.
They
even rank manufacturers according to the number of problems reported
on each maker's vehicles.
Another
feature breaks down reliability history, prices, and crash-test
results for each vehicle make and model.
Online
sources
On the Internet there are a number of web sites that offer information
helpful to potential used car buyers. We recommend the following:
Edmunds
is tops in the list. Particularly useful are the detailed data
and specifications on each vehicle, and their True Market Value
(TMV) prices.
ConsumerGuide
is another excellent site with valuable information for used car
buyers. This site provides specifications, year model differences,
pricing data, parts replacements costs, crash-test data, road-test
ratings, and more.
UsedCars.com
is another good source of research information on used cars. This
site is also an easy way to find used cars online. You simply
plug in your ZIP code and the kind of car you're interested in,
and you get a detailed list of available cars in your area, with
prices.
Consider
insurance cost
Get insurance rates before you buy your used car. Rates can vary
widely depending on specific vehicle makes and models. Call your
own insurance company and ask them to give you a quote on the vehicle
or vehicles you're interested in.
However,
we recommend that you compare rates from different companies every
time you change cars. Your own company may not have the best rates.
Online, we suggest the following insurance companies for free, no-obligation
rate quotes:
21st
Century Insurance Company
is a well respected auto insurance company serving California,
Arizona, Illinois, Indiana, Nevada, Ohio, Oregon and Washington.They
insure over 1.4 million automobiles and have an annual renewal
rate of over 93%, which says something about how satisfied their
customers are with the company.
InsureMe
is an established
and popular company, having been around since 1993. They have
a network of thousands of participating insurance agents and companies
across the United States, including in your neighborhood.
Once you complete their online form, they match your profile to
as many as five companies, who will provide you free rate quotes
that you can compare and choose from. Remember, you are not obligated
to accept any of the offers.
eInsurance
is an insurance rate pricing service that allows you to compare
rates from multiple auto insurance companies such as Progressive,
SafeCo, Hartford, and more by simply filling out one online form.
It's totally free and you are not obligated to accept any quote
that you receive.
Consider
an extended warranty
Depending on the age of the car you buy, you might have some time
remaining on the original new-car warranty. However, when that time
expires, you may want to consider an extended warranty to cover
you against the cost of major repairs. Here are some recommended
sources that provide free, no-obligation quotes:
Safety
data Vehicle safety ratings, crash-test results, recalls, customer
complaint data, other important safety-related information can be
found at the government's National
Highway Traffic Safety Administration (NHTSA) web site.
Price
your car
Pricing used cars is more of a hocus-pocus art than a precise science.
Therefore, any source of pricing data must be taken with a proverbial
grain of salt.
The
price of any used car is determined by what buyers are willing to
pay - period. And that can change quickly and often. Used car prices
can be affected by the current state of the economy, the supply
of used cars in dealer inventories, current prices of similar new
cars, good or bad news, rumors, and even the weather.
Just
remember that if you go to multiple sources for your pricing information,
you'll always get multiple, differing answers. Which one is right?
It's up to you to decide.
One
way to cross-check the prices you find online is to look in your
local newspaper classified ads and "auto trader" magazines
for cars similar to the model you want to buy. Although these are
"asking" prices, not selling prices, this should give
you a better notion as to what prices make sense for your area.
Also
be aware that many of the ads you'll find in newspapers and magazines
are dealer ads. This is usually specified in the ad, but not always.
This means that the prices are higher than you might expect to pay
for the same car being sold by an individual — and you pay
sales tax on a dealer purchase while, in some states, there is no
sales tax on private-party purchases.
Shop
for your car
You should now know all about the car you want and the general price
range that you might expect to pay. So where to find the car?
Here
are some of the places you might find the car you're looking for:
Dealer
versus private party purchases
Expect
to pay higher prices at a dealer than if you buy from an individual.
Many dealers inspect their cars and provide an inspection report
with each car. However, don't let this be a substitute for your
own inspection.
Some
dealers provide limited warranties, and most sell extended warranties.
Watch out for dealer warranties that are "powertrain"
warranties only, and not "bumper-to-bumper" full-coverage
warranties. It's best to compare warranties that are available
from other sources (see "Consider an Extended Warranty"
above).
Some
dealers provide "certified" cars. This generally means
that the cars have had a more thorough inspection and come with
a limited warranty. Prices for certified cars are generally higher.
Be sure to get a list of what was inspected and what is covered
under the warranty.
Following
are typical characteristics of a certified vehicle:
Has
under 75,000 miles at the time of posting
Has undergone
a complete diagnostic mechanical inspection and repaired as
necessary
Is less
than 7 years old (current model year plus 6)
No salvage
title history
No evidence
of current or past frame damage
No evidence
of current or past flood or water damage
No inoperative
or replaced odometer
No odometer
roll backs
Is not
a Lemon Law resale vehicle
Is emission
certified as required by applicable state and federal laws
Is in safe
operating condition as defined by applicable state and federal
laws
Federal
laws help protect you
Used car dealers are required by the Federal Trade Commission
(FTC) to post a Buyers Guide in the window of each used
car on their lot. The Buyers Guide protects consumers
from problems associated with purchasing used cars from dealers.
FTC rules do not apply to private-party sales. Go here
to see a sample Buyers Guide.
Check
your car
Once you've located the used car you want, it's very important
that you inspect and investigate the car to reveal any existing
or potential problems.
Remember,
unless you buy from a dealer who specifically provides some kind
of warranty, your car purchase will be "as-is." This
means that if the engine falls out on your way home from the purchase,
the car and the separated engine belong to you.
The
seller has no responsibility after the sale, even though you may
feel that a problem was known to him and he didn't disclose it
to you. It's your responsibility to find problems before
the sale is finalized. State laws vary on this matter and you
should check the laws in your state.
Protect
yourself
You may know that records are kept on specific vehicles that have
had title changes, been involved in accidents, have been in floods
or totaled and reborn as "salvage" vehicles, or that
have other hidden problems.
The unique Vehicle Identification Number (VIN) on each
vehicle is the key to finding a vehicle's story. CARFAX Vehicle History Reports
are the best source of vehicle histories. You can run a single
report for a single vehicle, or if you're shopping and checking
multiple vehicles, get the unlimited multi-report package and
save money. There are no free VIN reports but the small cost is
a good investment, considering the cost of making a costly mistake
without it.
Checking
the past history of any used car that you intend to buy is essential
to help avoid surprise problems down the road.
Watch
out
When buying a used car, make sure the model year is correct. It's
not uncommon for dishonest dealers and individual sellers to promote
their car as being of a later model year. This allows them to
boost the price of the car and if you don't know better, they
may succeed.
You
can check the car's VIN to determine the model year. It's the
10th position from the left. Here's how to decode it:
1988
- J
1989
- K
1990
- L
1991
- M
1992
- N
1993
- P
1994
- R
1995
- S
1996
- T
1997
- V
1998
- W
1999
- X
2000
- Y
2001
- 1
2002
- 2
2003
- 3
2004
- 4
2005
- 5
2006
- 6
2007
- 7
2008
- 8
For
example, if your VIN is SCCFE33C9VHF65358, the 10th post ion is
V, which indicates the car is a 1997 model.
Get
maintenance records
You should ask for maintenance records if they exist. They tell
you whether or not the previous owner took proper care of the
vehicle, and what problems have been repaired.
Get
a mechanic
You should have a qualified mechanic check your car. If you don't
have a mechanic, there may be an inspection service in your town,
or a garage that performs this type of service. Pep Boys, for
example, provides an "all-points" inspection for a reasonable
fee.
If you want to find a good mechanic to do your inspection and
repairs, try this ebook: Honest
Mechanic by insider Austin Davis.
Do
your own inspection
If you prefer to do your own inspection, here's a nice online
ebook: Inspect
Before You Buy.
What
are the easy things to look for?
Worn
tires - uneven wear patterns
Worn
or frayed belts
Low
or dirty fluids
Leaks - spots under car
Rust
damage
Flood damage
(soiled carpets, rust in door frames, musty smell)
Accident
damage (signs of being repainted)
Non-working equipment (radio, A/C, lights, heater, instruments,
power windows)
Missing
equipment (spare tire, jack, lug wench)
Paint damage
Chipped
windshield
Recent
emissions inspection sticker
Do
your own diagnostics With a PC and some special software you can do a complete
analysis of a vehicle's engine and emission system. You simply
plug into the vehicle's on-board diagnostic (OBD) computer and
the software analyze your car's health. AutoTap
is a product that performs this kind of analysis and shows the
results in an easy-to-understand graphical format on your computer
screen.
Drive
the car
Test drive the car in as many ways as you can. On city streets
at low speed and on highway at high speed. Drive on smooth streets
and bumpy roads. Drive uphill and down. Jack-rabbit starts and
sudden stops.
Close
the deal
You'll need a Bill of Sale to complete the deal. A Bill
of Sale protects both you and the seller, and provides a proper
record of the sales transaction.
A Bill of
Sale is always smart — even if it's not required by law
in your state. It protects both buyer and seller. It contains
a description of the vehicle, VIN, date of sale, purchase price,
dates, signatures, and other important information.
To the buyer,
a Bill of Sale is legal proof of purchase. It serves as a kind
of temporary title/registration that can be important if pulled
over by police for any reason, for purchasing insurance, and to
secure a purchase loan.
To the seller,
a Bill of Sale is protection from disputes that might arise later
from the buyer.
Rather than
attempt to write up your own Bill of Sale, we recommend that you
use CarContracts.net.
You can create and print a proper legal Bill of Sale form in a
couple of minutes, for a small fee.
Check
the law
Be aware that most states have laws and regulations that relate
to used car sales. Check with your state Department of Motor Vehicles
(DMV) or visit their web site for additional information.
Get
a loan
One of the best sources of online used car loans is DriverLoans.com.
They approve fast and you'll have your money quickly.
Pay the seller
Pay the seller with cash, a cashier's check, or a check from your
loan company. Some sellers may not accept cashier's checks —
because they can be faked. In that case, you'll have to conduct
business at your bank and give the seller cash.
If
the seller has to pay off a loan before he can get his title,
this can be a touchy situation. You'll have to decide whether
to trust him to send you the title later. If you are uneasy about
it, you can go together to his bank to conduct this final part
of the transaction. If the seller is from out of town, he could
get a short-term personal "bridge loan" to pay off his
car loan and get the title before you pay him.
Remember,
a seller without a title may be selling a stolen car.
One
last thing
Before the old owner departs, make sure you get the vehicle owners
manual, any maintenance records, extra keys, remote openers, jacks,
lug wrench, and warranty documentation. In some states, license
plates go with the car; in others, the plates are retained by
the old owner.
Be
sure to contact your insurance company right away to have the
new car added to your policy. You can do it on the telephone.
Have your vehicle's VIN handy and a list of it's safety features
and anti-theft equipment. In many cases, the insurance company
may want to see the vehicle.
Most
states require that you register your vehicle and change the title
within 30 days after the sale. You may also have to pay sales
tax, get an emissions/safety inspection, or get new license plates,
depending on regulations in your state.
Buying
a used car takes time and care in order to avoid making costly
and unpleasant mistakes.
Used
Car Buying Guide
For
more details see our article: 