How to Buy a Used Car

by Brett on April 11, 2010 · 85 comments

in Cars, Manly Skills

Last year, my wife and I were eating dinner when we suddenly heard a crash outside. We ran out the door and saw that someone had smashed into our car, which had been parked on the street. The lady driving the other car was drunk and driving on the wrong side of the road. The lush and her car were completely unscathed, but our car was totaled. Doesn’t it always seem to work out that way?

Kate and I had to buy a new car.

Well, new to us. We ended up buying a used car. Now, this was the first time I had ever had to buy a used car without help from my parents, so I was sort of clueless about the process. This was my first big, adult purchase. From doing some research on the web and talking to friends and family, here’s a list of tips and advice on how to buy a used car.

Benefits of Buying a Used Car

Avoiding depreciation. It’s common knowledge that once a new car drives off the lot, its value depreciates immediately. In the first two years of ownership, a new car can lose about 30% of its original value.  And if you decide to sell your new car a few years after you buy it, you’re going to lose a lot more money in the re-sale than if you had bought it used.

Price. If depreciation is your enemy when buying new, it’s definitely your best bud when you buy a used car. There isn’t much difference between a brand new car and a two year old car. By buying a car brand new, you’re basically paying 30% more than you need to. That’s a big mark-up for that new car smell.

You can save even more money if you decide to buy older cars that have more miles on them. A buddy of mine back in college bought an ’86 Honda Accord hatchback for a couple hundred dollars. It was super ugly, but it drove just fine and lasted him a few years.

Bigger selection. Because used cars are cheaper than brand new cars, you effectively widen the selection of cars you can purchase. Instead of being merely a dream, luxury and sports cars enter the realm of possibility. I remember back in high school when my dad and I were shopping around for a used car, I found a late model (this was back in the 90s) Mercedes Benz for about $5,000. I couldn’t believe it!. Something had to be wrong with it. So, we took it for a test drive and to a mechanic. It was in tip top shape and drove like a dream. I ended up not buying the Benz. I was too punk rock for that. Instead I went with a 1992 Smurf Blue Chevy Cavalier. Now that’s punk rock. However, the experience did open my eyes to the fact that if you look hard enough, you can find some awesome cars for super cheap when you buy used.

Save money on insurance. If you buy a considerably older used car, you can save money on car insurance by only getting the state mandated minimum coverage. If your car is worth less than 10 times the premium on your insurance, it’s probably not worth getting comprehensive coverage.

Buy a Used Car from a Private Owner or a Dealership?

When you buy a used car, you have two possible sellers: a private owner or a dealership. Each has its advantages and disadvantages.

Owner Advantages

  • Great deals. When you buy from a person who put an ad in the paper or on Autotrader.com, you can often find some really good deals. The best deals I’ve seen are at estate sales. You can find an older car with low mileage because the little old lady who owned the car only drove it to church and the grocery store. The car might smell like mothballs, but you’ll enjoy the sweet scent of saved cash.
  • Less intimidating negotiations. Negotiations can also be less intimidating because you’re working with an average Joe and not some highly trained salesman who has to take your offer to a mysterious backroom boss to get it approved. Moreover, dealerships often try to throw in unneeded extras when you’re buying from them- extra floor mats, XM Radio, etc. When you buy from an owner, they’re just selling you the car and nothing more. Makes the experience less irritating and cheaper.

Owner Disadvantages

  • Complicated and annoying negotiations. Owners tend to be more attached to their cars than dealerships. To them, they’re not just selling a product, they’re selling a memory. These sorts of owners can be difficult to work with. They’ll bust your balls in negotiation over a piece of crap Buick simply because it was their grandfather’s beloved car, and they hate to see it get in the hands of the “wrong person.”
  • No consumer protections. Private sales aren’t generally covered by many states’ implied warranty laws. Implied warranties are unspoken and unwritten warranties that hold sellers responsible if the product they sold doesn’t meet reasonable quality standards.  When you buy from an owner, you’re buying the car “as is,” meaning if the car has a problem (known or unknown by the seller) once you buy the car, it becomes your problem and the seller doesn’t have to do anything to fix it. Moreover, private sales generally aren’t covered by the FTC Used Car Rule which requires dealers to post a Buyer’s Guide in used cars for sale.

Dealership Advantages

  • Certified Pre-Owned Program. A CPO vehicle undergoes rigorous mechanical and cosmetic inspection before it’s put on sale. Moreover, CPO cars are often covered by a warranty beyond the original factory warranty which includes items like roadside assistance. Buying a CPO vehicle can give you the piece of mind that the car you’re buying is in great condition and not a piece of crap. Even if you don’t buy a certified pre-owned car, when you buy from a dealer, you’re likely protected by your state’s consumer protection laws such as implied warranties or warranties of merchantability.
  • Extra services. Dealers will often throw in extra services for free that a private seller can’t. For example, when Kate and I bought our last car, before we drove it off the lot, the dealer cleaned and detailed it, performed a free oil change, and gave us a discount on our first service visit with them.
  • Trade-ins. Dealers also take trade-ins which lowers the amount you have to pay in cash. Personal finance guru Dave Ramsey has a system set up that uses trade-ins on used cars to allow him to upgrade his vehicles every year or two without having to take out a loan on his car. Check it out. It’s pretty brilliant, if you ask me.
  • Better negotiation experience (possibly). The negotiation experience can be a bit more even keeled with dealerships. It’s just a business transaction for them. You can avoid some of the emotional baggage you often find when negotiating with owners.
  • Financing. If you don’t have all the scratch on hand to buy a used car, a dealership can often provide financing to help you make the purchase. And with the crum-dum economy, car manufacturers and dealerships are providing some pretty good deals if you decide to finance a used car. Things like cash-back or zero interest can make financing a used car a reasonable thing to do.

Dealership Disadvantages

  • Higher list prices. List prices at dealerships tend to be more expensive than when buying from an owner. However, you can usually negotiate this down easily.
  • High-pressure negotiation. Negotiation with car salesman can be more high-pressured than when buying from owners. Selling is what these guys do for a living. They know every trick in the book and will unleash them on you without hesitation. When you step foot on the dealer’s lot, gird up your loins, and prepare to play hardball.
  • Up-sales. Dealers will try to up-sale you until your eyes bleed. They’ll tell you that you need to add the extended warranty or that you need the new stereo. If you’re not careful, you can drive out with a used car that cost you $1,000 more than the original value simply because you let the add-ons creep in. However, you can turn the up-sale to your advantage by simply using it as leverages in negotiating. If the salesman presses for an extended bumper to bumper warranty, tell him you’ll take it only if he lowers the price of the car a few hundred dollars.
  • Financing. Financing is both an advantage and disadvantage. When you finance a used car, you can end up paying thousands of dollars more for your car than if you had paid in cash. Dealers that finance to buyers directly want this extra cash, so they’ll often pressure car buyers to finance their new car. Save your money. Pay in cash.

Blue Book It!

When you’ve decided on the type of car you want, start researching its value using the available tools online. It’s essential that you know how much a used car is worth when you start negotiating.

Kelley Blue Book. Since 1926, Kelley Blue Book has been providing used car prices in their trademarked blue book.

Edmunds.com Edmunds.com will not only give you the manufacturer’s suggested retail price (MSRP) for a vehicle, they’ll also check what others have paid for that particular car and give you an almost real time market price for it.

How to Inspect a Used Car

Alright. So you’ve picked out a used car you like that’s in your price range. Before you make an offer, you need to inspect it to ensure you’re not buying a lemon. This is especially important if you’re buying directly from the owner. Your best bet is to take the car to a mechanic you trust and let him look it over for any defects. If you don’t have a mechanic handy, here’s how you can inspect a used car.

CarFax. Get one. CarFax is a comprehensive report of a vehicle’s history. The report costs money to buy, but it’s definitely worth it. The report can tell you if the car has sustained flood or frame damage, two things you want to steer clear of when purchasing a used car. All you need to run a CarFax report is the car’s vehicle identification number (VIN) which can be found on the dashboard, just below the windshield on the driver’s side or on the driver’s side door, just below the locking mechanism.

Initial Inspection

Before you start the car, give it this initial inspection:

  • Look underneath the car for rust. A used car with a rusted frame isn’t structurally sound. While a rusted frame can be salvaged, it can be expensive and time consuming. Choose another car.
  • Check the tires and wheels. Look for even tire wear. Uneven wear in the front could mean the wheels or suspension are out of alignment.
  • Inspect the exterior. Look for recent paint jobs as this may indicate body damage. You can sometimes detect paint jobs by finding over-spray on the rubber window molding. Tap along repainted areas and listen for a change in tone that reveals patchwork.
  • Check the interior. You don’t want a used car that’s been torn to shreds on the inside. When inspecting the interior, check the odometer. If the car says it has low miles, but the wear and tear on the inside looks like it’s been to hell and back, something might be up.
  • Look under the hood. If you see rounded or stripped nuts and bolt heads, it could be an indication of shoddy repair work. While you’re under there, check the spark plugs to see if they’re newer than the rest of the engine. If they are, that’s a sign the car has undergone regular maintenance and tune-up. That’s a good thing.
  • Kick a tire. Just for the hell of it.

Test Drive

  • Drive it cold. A cold engine will tell you a lot more then a warm one will.
  • Plan your route. You want your test drive route to be similar to your daily driving experience. Sure the car might drive nice on neighborhood streets, but how does she feel on the expressway? Mix up your route with freeways, city streets, rural roads, and parking lots.
  • Turn the key. Does the car start easily? Does the engine make any funny noises while turning? Do you have to turn the key a lot to get the car started?
  • Check controls. Test the wiper, lights, radio, and air conditioner controllers. There shouldn’t be any noticeable drop in engine performance when you turn on the A/C.
  • Check the transmission. If the car is an automatic transmission, it shouldn’t make any loud clunking noises or hesitate when you switch gears. A manual transmission should shift smoothly. If you hear any grinding noise when shifting it could mean the synchronizers are bad. Also, check the clutch of a manual transmission by going slowly uphill in a higher than normal gear, like 3rd or 4th gear. If the clutch is good, the RPM will decrease and nearly stall. If the clutch is bad, the engine will rev but won’t go anywhere.
  • Check the brakes. Find a road without any traffic and accelerate to about 50 mph. Hit the brakes hard. If the car pulls to the right or left, it may mean you have a loose brake caliper or there’s not enough hydraulic fluid on the side it’s pulling to. Also, if you feel a shuddering when you brake, it could mean the brakes are warped. The brake pedal should also feel firm when you press down on it. If the brake sinks all the way to the floor, you may need to replace the master cylinder.
  • Check the alignment. While driving, take your hands off the steering wheel for a moment and see if the car pulls in one direction. If it does, you might have some front-end alignment problems.
  • Check for smoke. You’ll need a buddy for this test. While driving full speed, take your foot off the accelerator completely for a few seconds, and then floor it again. If you see a blue cloud of smoke, it means oil is burning and the car has internal engine problems that may require an engine overhaul.
  • Take the car over a bumpy road. Check out how the car responds to the bumps. If you feel the bumps a lot, the shocks are probably worn.
  • Listen. If you hear rattles, groans, and clunks, that’s a problem. Sure, the ailment might be repairable, but why waste your time or money?

Negotiating

We could devote an entire post to this, so that’s what we’ll do. Look forward to a future article on negotiating when buying a used car.

Alright, I know I missed some advice here. That’s where you guys come in. What other used car buying tips do you have? What should guys know when buying a used car? Share your advice in the comments.

{ 85 comments… read them below or add one }

1 Steve April 12, 2010 at 12:06 am

A fantastic resource is http://www.fightingchance.com.

For a low fee, they give you the exact price that the dealer actually stroke the check for, in purchasing the care. This makes a huge difference in leverage, when you go to the dealer + once the actual price is known, you can email the pricing requests to all dealers national.

2 Stephen Newell April 12, 2010 at 12:08 am

Read and do your best to memorize the entire contents of CarBuyingTips.com. I stumbled upon that website when I started looking for a car several years ago and it is gold. That plus these tips ought to make you invincible once you’re ready to buy!

3 Patrick Kniesler April 12, 2010 at 12:20 am

“The car might smell like mothballs, but you’ll enjoy the sweet scent of saved cash.”
You MIGHT enjoy the sweet scent of saved cash. If the car smells, the smell may eventually get to you or even cause a physical reaction. Headaches from that old car smell are a real possibility, depending on what’s floating around. Your health is not forfeit at any cost.

4 scott April 12, 2010 at 2:06 am

Just bought a used F250 diesel yesterday after my other truck was totaled. IT ROCKS!!

5 Ethan C. April 12, 2010 at 2:31 am

Here’s my key tip for buying from a dealer: Choose your dealer carefully. If you can find a good, honest, straightforward dealer, stick with him.

My parents and I have discovered one local dealership that has been completely honest and easy to work with, and we’ve bought our last three cars from him. He doesn’t do bargaining and he doesn’t try to upsell. All his cars are in good condition and thoroughly checked over. He has his own on-lot repair shop, and he even checks the cylinder pressures to get an estimate on the overall remaining life of the engine. We’ve bought three Toyotas and a Nissan from him, and we’ve been happy with all of them.

If you can find a guy like that, stick with him! Encourage fair business practices.

6 Arzo April 12, 2010 at 2:33 am

I bought my Mitsubishi Pajero 1992 model in Dubai, if you do that in Dubai it means either you are poor, or crazy, I am somewhat a little of both.

I only had to replace few things when bought it, but I love the manual transmission of the car, feels more masculine, and the ladies who understand this, appreciate you more.

Great article, enjoyed the read.
Arzo

7 Michal P. April 12, 2010 at 5:58 am

And another suggestion – If buying a cheap car, don’t care about it. Just service it enough to make it safe. And by cheap I mean car worth year amount of fuel for it.

8 Daniel April 12, 2010 at 6:01 am

Funny this piece comes up the morning I’m away to possibly buy a used car myself, excellent points to consider as always, good article.

9 Dave Lewis April 12, 2010 at 6:36 am

Be just a little wary of Carfax. Accidents and major malfunctions don’t always show up on the report. If a vehicle is repaired by the dealer or a major and reputable independent that does lots of insurance work, the records will probably be there. If the front end was straightened out with a 10 pound sledge by Bubba’s Bait and Body Shop all bets are off.

10 Sam W April 12, 2010 at 6:45 am

Sorry AOM, but this guide doesnt place nearly enough empahsis on mechanical inspection….

11 Mike Hostetler April 12, 2010 at 7:07 am

If you can help it, don’t be desperate – - in other words, get your new-for-you car before you other one breaks down or is wrecked. Sure, sometimes it’s not possible (like in Brett’s story above) but not being desperate for another car sure helps.

Another thing is to be prepared to walk out the door during negotiations. A lot of dealers only want to talk about monthly payment, not total cost, some really press you into the warranty, etc. You can probably find the same car elsewhere, so be able to walk.

The Internet is also a good thing. If you know what kind of car and year range you want, email different dealers around your area. They will email you all sorts of deals just to get you on their lot. It can save you a lot of time.

12 allan hegyes April 12, 2010 at 7:25 am

the best tip I ever got: look at the pedals, the amount of wear on the brake and clutch pedals should match the odometer, same with the gas pedal. I check all the radio stations that are pre progammed, if you get the polka station, and news, yep, it was owned by the geezer. If you get head banging-acid rock, and some old lady says, “I only drove it to church,” someone is fibbing.

13 Cory D. April 12, 2010 at 7:40 am

Wonderful article. May I make one side note. Yes, you should Blue Book the value. Kelly Blue Book is what most private sellers will use. Most dealerships actually go to the NADA book for a value. Both can be invaluable, and should be referenced when hunting a used car.

14 aaron April 12, 2010 at 7:41 am

Used cars at the dealership don’t always come from the same geographic area you may live in. I recently bought a 2007 Hyundai that was in a different part of the US before it found its way to my neck of the woods. This is important because, as anyone in the northeast will tell you, 50000 miles in Pennsylvania will be very different than the same miles in Florida. The carfax can help here. Keep in mind what kind of wear you should be expecting based on where it was being driven and you can save a lot of heartache!

15 Josh April 12, 2010 at 7:47 am

I agree with not being desperate. That’s the most important lesson my dad taught me about buying a used car. He always said, “The thing about used cars is that there’s always another one coming down the road tomorrow, so don’t get so attached to one you’re test driving that you can’t tell the salesman to keep it.”

I also agree that if you can (if you live in the same place for a while) find a dealership or independent used car lot that you like. If you know you can trust them that makes a lot of difference. Then when the salseman tells you, “This is the lowest I can sell this car for” you know he’s actually telling the truth.

16 Jonathan April 12, 2010 at 7:57 am

@ Sam W:
Brett did mention that he realizes this is an incomplete article. Why don’t you post some info to help the rest of us out, rather than a simple one-sentence criticism? Curse the darkness vs lighting candles and all that.

@Brett:
Could you post some references as to where you found all this information or is this entirely from experience?

17 Rudy April 12, 2010 at 7:57 am

Great post! And very helpful to me. I really appreciate this site…

- If buying new, get the ConsumerReports car report
- When buying from a dealership, be ready to walk away. If you are making an unreasonable offer, they’ll be happy to see you go. If it’s a reasonable offer, it’ll kill them.
- When I bought my latest car, believe it or not, but I bought it directly from the sales manager of a large dealership. I called Saturday afternoon on a 3-day holiday weekend. I told him I was looking for XYZ car (the exact model, type, style, and even color). He checked their lot and they had one. I told him how much I would write him a check for that car. I heard the calc running. He asked me what everyone else was offering me. I said I didn’t do business that way: he could beat anyone else’s price and anyone else could beat his price – but I wasn’t going to tell anyone else his price. He then said he could do the deal but there was a $300 destination fee. I said the fee is fine, but I write the check for $xyz. Calc was running again. He asked if I could drive right over and I said “yes”. It was a deal.
- Craigslist is a great resource for used vehicles. Go to your local Craigslist and decides if you want to look at Dealers + Owners or just one. Type in your vehicle and run search. Then, SAVE THE RESULTING LINK. It will enable you to go directly to the car/truck section and ONLY see the vehicles you are interested in – which is a huge time saver. Another big tip: you can then click the RSS feed link on your search results page and put the results into your RSS feed. This enables you to keep an eye on ANY used vehicle that comes up without even having to visit CL – it comes through our RSS Feed Reader.
- If you are going to buy off of Craigslist, try to watch/monitor the listings for AT LEAST a month before making a purchase. Over time you’ll start to get a feeling for the market in those vehicles. You’ll recognize reposts and will see the same vehicle over and over…

18 Steve April 12, 2010 at 8:00 am

If you buy from a dealer don’t trust that they did a “41 point inspection” or whatever they like to advertise – do your own. I’ve seen cars with a lot of problems even though they were “inspected.” Apparently inspecting and fixing are two very different things.

19 Gortex April 12, 2010 at 8:51 am

Great article! My wife and I just spent the weekend shopping around for a new-to-us car. (We’ve decided on a 2006 Chev Cobalt)

This will be my second car, and I’ve come to a conclusion about auto dealers:
A good one is worth his weight in gold. He’ll find exactly the car you want, patiently answer your questions, and give his honest opinion.
A bad one can make the experience of car shopping hellish. The sales pressure and tactics are very off-putting, and you feel you have to be constantly adversarial.

20 Perry Clease April 12, 2010 at 8:53 am

Look under the hood. There should be a number of decals in various places such as a diagram for routing the fan belt and so on. If they are missing then the vehicle may have been in a front end accident; They paint the engine compartment after straightening the frame, but rarely replace the decals.

21 Adam April 12, 2010 at 9:03 am

Open then hood and pull out the oil dip-stick. If it the metal on the dip-stick looks really dark, it could mean that the oil wasn’t changed regularly. Again the wear should match the mileage.

And stick to your gut.

22 Lee April 12, 2010 at 9:31 am

I’ve found it useful to learn basic tendencies of certain cars. I am a Subaru loyalist, myself, and as such I’ve learned many of the tendencies of Subaru’s, and look for those problem spots when I am car-hunting. For example, Subaru’s can have problems with head gaskets, so I always check the engine block for oily or sooty buildup down the sides, that indicates to me that there is seepage of oil from a possible head gasket problem. If you notice that your engine looks REALLY clean when you are inspecting it (like way cleaner than a 75,000 mile car engine should look, even with regular tuneups) be suspicious, because the dealer may have had the engine compartment steam cleaned to cover just such a problem. Check your seals around the oil pan, too, for seepage.

Bottom line, do your research on what you want to look at before you go look at them. If you want to look at a Ford Focus, check online for problems that have been reported frequently. A great resource for this is NHTSA’s Office of Defects Investigation, which compiles both general consumer complaints against all cars, as well as official recalls on all cars. It helps to know what people are complaining about before you go checking out a car!

23 Stu April 12, 2010 at 10:06 am

Really great article, thanks so much.

24 Taylor April 12, 2010 at 10:16 am

When popping the hood there is much more to check for than rounded out nuts. I always check for the following:

- look for glossy or slick spots under the car. If you can see the fluid, touch it and smell it. Transmission fluid smells like cherries, coolant smells sickly sweet, and oil smells like burning. This also applies to the smell a car makes when driving. If you smell any of these three things, then the car is burning that type of fluid.
- look for white spots around the engine that almost look like hard water stains. Those are caused by dried coolant that had leaked.
- When checking the dipstick, really dark is a sign of poor maintenance (as someone else noted), but an opaque brown is even worse…that is a sign of coolant leaking into the engine (and possibly a ruined engine)
- Oil is checked with the engine off, transmission fluid is checked with the engine running.
- Check the fluid levels of everything you can see. Even if you dont know what it is, most have easily read min and max lines.
- Look at the coolant reservoir. The fluid should be either orange or green. If its brown that is also very bad. Either someone mixed orange and green antifreeze (bad) or oil leaked in from the engine (worse).

Not a short list, but those are the things I look at under a hood. I used to be a mechanic so Ive seen my fair share of beaters that shouldnt have been running, and doing a visual sweep for these things only takes a minuet. There is so much more that can be checked, but its hard to know what’s important if you dont know what your looking at. The above will help you avoid most of the major problems with engines breaking.

25 Chance April 12, 2010 at 11:06 am

Two other good sources of information are Consumers Reports car buying guide. You can see reliability, performance and safety ratings on all cars, and top picks for your budget. The Complete Car Cost Guide from IntelliChoice is a good one stop shop to look at overall cost of ownership, including maintenance and reaper cost, resale value and more. great article. i have been a car salesman for over 20 years, helping people make wise choices on their transpiration needs.

26 Mike April 12, 2010 at 11:06 am

Taylor put up a great list of things to check, I’ll add a few of my own:

-Take a look at the back of the cap where oil is poured in, if there’s a milky buildup inside it the car has a damaged head gasket. You don’t want that car for any price.
-Take a sample of the transmission fluid (assuming it’s an automatic). When a car is new, this fluid is the color of salmon flesh. Under normal wear, it will fade to a very pale pink/grey and have no significant smell. Dead giveaways that there is a problem with the Transmission would be any kind of dirt or particles of metal (any speckles at all are a bad sign) or if there is a burnt smell (like you would expect from engine oil) This fluid should not be leaking or low. If the level of the fluid is low or you see leaks, don’t buy the car unless you know your way around a garage and would replace the seals yourself.

Above all, trust your gut. If anything they tell you doesn’t match what you’re seeing with your own eyes, walk away.

27 Jordan April 12, 2010 at 11:16 am

I just bought a used car for the first time on my own about 3 weeks ago. I checked and took it to a mechanic to make sure it was mechanically sound, but I chose to go less the “reliable” route and more novelty/classic route with a 1980 jeep cj5. Luckily I live on a college campus in a smallish town so I can walk if I really have to, but so far it’s been a great fun vehicle! The advantage to buying an older vehicle is that it takes
work to keep running well, meaning you learn a lot about cars along the way. I have already replaced the clutch master cylinder myself,
will replace the brake master cylinder next and I have started changing my own oil, all things I wouldn’t have probably learned if I was driving
a newer computer-ridden vehicle.

28 Steve April 12, 2010 at 11:22 am

As a car salesman for a very honorable and upright dealership I would also include to be careful if the deal seems to good. Other dealerships, I am aware of, offer prices over the phone or internet that are intended to get the customer in the door. Once the customer has arrived they switch the product or add on random fees that don’t truly exist.
Also, in our defense, remember that just because you are talking with a car salesman doesn’t mean that he is tricking you, or lying to you… there are some of us that are honest and trustworthy!

29 Charles Johnson April 12, 2010 at 11:24 am

Even following all these ideas, you can still get a raw deal. I bought a used Mazda MX6 for $2500 a few years agoAll the switches worked, the interior was in good shape, the engine was fine, the transmission sounded okay, the mechanic who inspected it found no problems that were atypical for a 10-year-old car. 80,000 miles. The very pregnant woman who sold it to us had just bought a new minivan. Everything seemed kosher, but 3 weeks later I found myself spending $2000 on a new transmission, and 9 months after that it needed a 3rd one. We just junked the car instead.

Moral of the story: Buy a Honda instead.

30 Kyle April 12, 2010 at 11:53 am

Go to the most expensive dealer with the most advertising and biggest selection, use them to help decide what you want. They won’t negotiate down to what you’re willing to pay, and don’t let them bully you up. As you’re walking away, they’ll offer you an ‘extended’ test drive, where you keep the vehicle for a couple of days. You’ll probably have to write a check for them to hold, go ahead and write it but put a stop-payment on it, they’ll deposit it anyway. Drive the car to their competitor and tell them “I’m test driving this from {competitor}, it’s exactly what I want, but they won’t come down form {a little more than what you’re willing to pay}”. They will likely take a loss to steal a sale from a big competitor.

It worked like a charm for me, truck listed for $26k, the 1st dealer came down to 22, I told 2nd dealer they wouldn’t go under 21, they sold it to me for 19.

31 Katie April 12, 2010 at 11:56 am

If you’re buying from a dealer, go on the last or second-to-last day of the month (or better yet, quarter). Those guys are trying to make sales goals and will deal lower right at the end of the month.

32 Peter April 12, 2010 at 12:34 pm

This article couldn’t have come at a better time as I am going to be purchasing another vehicle soon.

Buying a car from a dealer has to be one of the worst experiences out there. The entire business model seems to be based on “how much can I screw over the customer.” For example, the last time I purchased a car, they offered to finance it. The sales quote only had a per month cost,. I ran the numbers and realized that they were proposing that I pay 17% interest on the loan!. When I pointed that out, the salesman smiled sheepishly and pulled out a different financing offer at under 5%.

I’m sure that every time I have left a dealers lot with my “new” used car, the salesperson and sales manager were high-fiving each other and tooking forward to spending their windfall.

33 David April 12, 2010 at 1:28 pm

Hahaha…” I was too Punk Rock for that…”

34 JamesBrett April 12, 2010 at 1:51 pm

yeah, definitely do a separate post on the negotiations bit. because as of now, i’ve got it in the advantage and disadvantage list of buying both from dealer and a private owner….

35 Torrey April 12, 2010 at 4:30 pm

If you aren’t mechanically inclinded enough to check it yourself, be sure to have a mechanic or repair shop check it out. There are so many flaws that can’t be seen with a novice’s eye. You’ll save tons of money and headache by doing so.

36 Thad April 12, 2010 at 4:49 pm

Great article!

May I second (or third) the idea that you have to be ready to walk out. Last time that I was involved with the purchase of a used car, I was with my then-girlfriend-now-wife and she was in love with the car. The finance man was being a prick about having the financing finalized (we were using the credit union and not their financing) before her being able to drive it … after her car was totaled in her apartment parking lot. So, we started to walk out, the salesman saw us, stopped us, and handed us the keys. He then yelled at the finance man, knocked off some of the closing fees, and we drove off.

So, never worry about walking out … you can always walk back in, if the deal is right.

37 Daniel April 12, 2010 at 4:58 pm

I would be very suspicious of 0% interest financing. Check the fine print to see that the rate doesn’t get jacked up after a certain amount of time.

@ Chance
“Transpiration”? Really?

38 KRA April 12, 2010 at 6:41 pm

Great post. One additional suggestion is to check out the make and model of the vehicle online to see customer reviews. This will give you a better indication on how long the car will possibly run for and if there are any common problems to look out for. I believe the Kelley Blue Book website has car reviews but there are other sites which more comprehensive reviews.

39 Paul II April 12, 2010 at 10:23 pm

I’ll be getting my permit this year, and it looks like I’ll have my father’s VW Bora as a first car! I can’t wait to start driving!

40 Dan R April 13, 2010 at 1:33 am

If you’re looking at a used car that’s in the 80,000-110,000 mi range, be sure to find out of the timing belt and water pump have been replaced. Almost all cars need this expensive and routine maintenance at about that mileage. If it hasn’t been done, you’re looking at either $400-800 (depending on the car) to have those replaced. If you don’t replace it, and the belt snaps, it will ruin your entire engine and you’ll be in a bigger mess.

41 Richard | RichardShelmerdine.com April 13, 2010 at 10:13 am

Depreciation is a huge thing with a car. They always say that when you drive it off the forecourt it loses 20% of its value. Graet advice, thanks guys.

42 Richard April 13, 2010 at 10:44 am

Another option – I just found http://www.ronsmap.com on facebook… it’s kind of like craigslist for new and used car buying! Impressive site.

43 Red April 13, 2010 at 12:53 pm

Another good way for getting a great deal on used vehicles is to check postings near military bases. A lot of those enlisted soldiers are getting sent on deployments overseas or to Iraq and they will be wanting to get what they can for their vehicles since they can’t take it with them, and will usually sell way below their value.

44 Todd Helmkamp April 13, 2010 at 4:23 pm

@Daniel: Typically, 0% interest offered through a dealer takes the place of any manufacturer’s rebates or other incentives, and is for the entire term of the loan. However, you are correct, always read the fine print!

Another negotiating tip: if you are at a dealer, negotiate the price of the vehicle WITHOUT a trade value. Negotiate the trade and sale price separately. Unless you really know what you’re doing, do not agree to a “difference figure”; its too easy to fudge the numbers that way. Understand what the price of the car is, minus the value they are offering for your trade. That way you know exactly what the numbers are.

45 Tommy April 13, 2010 at 6:11 pm

It’s quite simple; take it to your trusted mechanic. For $20-$50 bucks, they will give the car a once over and report back…If the seller (private or dealer) won’t allow you to do this, walk away…This simple step will save you thousands.

46 Tim April 13, 2010 at 7:26 pm

Carfax is a nice tool, but do not think it is the “end-all, be-all” of vehicle information. The Carfax report relies upon police reports and insurance company claims, both of which require an “incident” with the car to be reported. If a person has a crash, water damage, fire, etc. and does not file a police report or insurance claim, Carfax has no way of knowing.

47 Car Negotiation Coach April 13, 2010 at 8:40 pm

Another consideration of dealer versus private party purchase is that when you buy from the dealer (used or new) and trade-in, most states allow you to deduct the cost of the trade-in from the purchase price before calculating sales tax. This can be significant.

For instance, if you trade in a 10k car and your tax rate is 6%, you save $600 in sales tax.

48 Steve C April 14, 2010 at 12:45 pm

Just sold my beater yesterday. The buyer did not follow these steps.

49 Jonathan April 14, 2010 at 1:00 pm

I’ve been selling cars for a very reputable dealer for about 5 years now, and this is definitely a good list of things to check out on every car. Our dealership actually doesn’t do any negotation, which I love because it means we have to price our vehicles very competitively up front. We don’t have the luxury of beating the competition’s deal by a couple hundred bucks, so we have to price aggressively up front in order to stay competitive. It also takes a LOT of the unpleasant pressure out of the car buying experience! We also ONLY sell certified cars, and I can definitely say that it makes a HUGE difference; we spend an average of $450 PER CAR just in mechanical repairs, and the majority of them are 2008-2009 models.

I would say an important thing to look out for is to find a dealer that sells cars that were certified by a THIRD PARTY source. If the certification is done in-house, and the mechanic is on the sales manager’s payroll, there is plenty of opportunity for cars to pass ‘certification’ that have no business being on the road, because there’s no third party accountability.

Also, rental cars are typically a good buy. The myth is that they’re mistreated, but the reality is that they’re typically a better maintained car than average. Edmund’s actually did an article about fleet cars a year or two ago, and according to them, fleet cars in general are good purchases, but rental cars specifically are a superior value because, contrary to popular views, they’re treated far better than the average car, most of the miles are going to be highway miles (when was the last time you rented a car and you weren’t traveling?) and their maintenance programs are typically strenuous.

Anyway, sorry about the novel. This is a GREAT article about how to get the best value out of a used car, and this is coming from an experienced car salesman. Thanks AoM for the great material, as always!

50 Sgt. Joe Friday April 16, 2010 at 6:38 pm

I’ll echo what Jonathan said. I bought my Chevy Suburban from Enterprise Rent-A-Car, 9 months old, 17K miles on it, and paid about 5% below KBB’s benchmark. Minimal BS or hassle. The cars that Enterprise (or Hertz or Avis) retail to the public are the best of the bunch. The cars that renters have been hard on get sold at wholesale to used car dealers.

51 dexter April 17, 2010 at 8:37 am

Identify your needs and be flexible with any car that meets them. One of those for me is air conditioning: check that cold air comes out and that the compressor cycles when it should. Practice this and other checks by checking out the car of any friend who will let you: identify components (find the compressor), watch to see how often the clutch cycles.
Find a good mechanic for your current car. When you need a new one, ask if he (or she) knows of any for sale. Maybe he has a client who is selling one, or can recommend a model that would suit your needs. The mechanic may even be able or willing to produce service records. Even if not, he will be familiar with its maintenance history.
Be familiar with maintenance requirements, including any specific to your target car (water pumps around 90k, timing belts ~60k, brakes 30-50k, etc.). If the car is close to any of those milestones, ask whether that work has been done. By the way, pushrod motors don’t have timing belts. Timing chains can last the life of the car.
Pay enough to be sure you can find a car in good shape. I used to look for $1-2K cars, and it’s nearly impossible to find one without problems. Better to spend $4-6K and get one that hasn’t been through five owners who don’t know its history.
As several have said, don’t wait until you have no car to buy one.

52 Larry April 18, 2010 at 7:03 pm

Some other things to consider when buying a car.

Any reputable dealer will let you take the car to your mechanic for inspection, especially if they think you’re going to pay list or advertised price for the car. If they won’t, there is a chance they want to hide something from you until after the sale, or until after they’ve sold you an extended warranty. Any honest owner will let you take their car to a mechanic as well.

As a buyer, if you are unsatisfied with the deal, consult with your attorney to get the best options. As-is deals are hard to break, but if the car has a pre-existing condition, or if the warrantor is difficult to deal with, consult your attorney before you do anything else.

Also, make sure you have your attorney review your purchase contract with you to make sure you understand your rights and obligations and remove any unnecessary language before you sign.

If you are the seller, and the car had a pre-existing condition, whether you knew about it or not, and regardless of the as-is condition of the sale, the buyer can still file suit against you. Defending yourself is the only choice to avoid a default decision that will not be in your favor. Make sure you have an attorney.

I am the business of selling legal service plans (which are to legal fees what roadside service plans are to towing fees) and I encourage everyone to buy one. If not from me, then from someone.

53 JF April 19, 2010 at 2:51 pm

I don’t think there is enough emphasis in this article about the maintenance costs of a used car. Specifically, while you may be able to buy a $5k Mercedes, that car is most likely pretty old. It will need repair, new tires, etc. Every aspect of an expensive car costs more than a traditional one. Just because you are getting the car near the end of its depreciated value, the manufacturer’s parts will still assume an affluent buyer/driver. A new transmission on a Merc is multiples of the same repair to a Honda. It’s a pretty important consideration.

I’d also say that you are discounting the benefits of new car ownership significantly. The warranty of a new car has significant value to the original owner, but not to subsequent purchasers. If you buy a used car from a dealer that is a “certified pre-owned” and comes with an extension of the original manufacturer’s warranty, you are going to pay up for that used car (or else you can buy an expensive extended warranty from a 3rd party provider). The bottom line is that having an independent inspection to look for red flags is not the same as having a warranty on your product, and the value of the warranty will be factored into the price in one way or another.

Right now is actually also one of the worst times to be buying a used car. The economic meltdown has lowered the supply of used cars because people are hanging on to cars longer if they aren’t secure in their employment picture. At the same time, more and more people are looking for the value of a used car instead of buying new. That has tipped the supply/demand scales such that dealers can charge at least 5-10% more for used cars than they could about 18 months ago. It has pushed trade-in values on used cars up, so you feel like you’re getting a better deal on the trade-in, but the used car dealer price has also gone up, so it’s a wash. On the other hand, sales for new cars fell off a cliff in the last 2 years, and dealers have tons of inventory on the lots they need to get rid of. If you feel comfortable with the initial expenditure for a new car, the market dynamics are actually in your favor at the moment.

I guess that’s not the point of your post, but you start the article with a theory that used car buying is the superior economic choice, when that is far from clear. Even if you have no interest in the ego-boost that many seem to use to justify the purchase of a new car, it can sometimes be an economically superior choice to buy new.

54 Karl April 20, 2010 at 3:59 am

This article would be more helpful with some pictures. For example, what does even tire wear vs. uneven tire wear look like?

55 RWW April 24, 2010 at 6:28 am

I am 67 and have been a well-paid executive or a business-college professor since 1972. While I was often been supplied a new car by my employers, I bought only one brand new car in my life. I defy anyone to give me clear evidence of how a new car can be the economically superior choice, other than saying “a used car may have more repairs.”

56 mrfixdit April 24, 2010 at 7:13 am

Look for wear on the brake pedal. If it’s worn on the left side that’s a clear indication that the driver drove with one foot on the brake and one foot on the gas. This can put a lot of strain or wear on the brakes and transmission. People usually don’t throw in the towel on the fist problem they have with a car. They give up on it after too many costly repairs then the “used car buyer” gets the benefit of all those new parts and the “bugs worked out of it” kind of thing, that’s why I prefer buying used. I have owned my used truck for nine years now and put about $1000 a year into repairs which is much cheaper than making payments and nothing is wasted on interest charges .

57 Fred April 24, 2010 at 10:59 am

Starting in the 80′s, I spent many years as a top-performing car salesman. One of the best general education websites I have ever found on the subject of everything and anything to do with buying or selling behicles, is Jeff Ostroff’s excellent site, CARBUYINGTIPS.COM, and I have been sending consumers to it for years.

Among other resources, Jeff has a many chapter book posted on the site which you can read for free. The last time I read it it took me about 2 hours to do so as I recall, and I realized that once I was done reading it, as a consumer I would now know more about the car business than half of the car salesman I ever me.

CARBUYINGTIPS.COM <=== Highly Recommended !

58 ironray April 25, 2010 at 8:35 am

To all those that suggest taking a car to a mechanic: How do you get someone to allow you to drive a car that has had its registration switched to another car, has no plates and no insurance to a mechanic?

Most of the used cars I look at are being sold because the owner bought a new/newer car and has had the registration transferred. Paying 50 t0 100 bucks to have it towed to a garage to pay another 50 bucks for the inspection of a car that’s being sold for $2000 just isn’t feasible.

59 Ownone April 25, 2010 at 12:59 pm

I always buy used cars so I have learned a few things.
This was a good article except for the part about “a mechanic you can trust”. Now that is funny. I wouldn’t trust a mechanic if it was my brother.
There are mobile mechanics that are impartial. for about $100 they will come to the car and inspect it, test it, run it, and tell you the truth about the car as is. This is valuable when you are trying to put down a few K for a car that you may own for a while. IT IS worth it. In this case don’t trust your gut. Get logical.
The other thing is, look at the license plate on the car. In any state, they are sequential. If you looking at an older car with a much more recent plate, that means that the car was purchased elsewhere and brought to the state recently. This is important because the car may have had issues such as flood, road salt, accident damage that are being masked.
It is a good idea to do a thorough research before settling on a car (or a brand of cars) because not all cars are good.

60 William Cole April 25, 2010 at 9:51 pm

Go with your gut. Some of the worst buying decisions I made when I ignored the still, small voice telling me “Don’t do it!”. Always feel free to back out of a deal. If you feel pressure to buy, then buy a hamburger at Wendy’s where one mistake won’t haunt you for years. Then reevaluate your decision on a full stomach.

61 John May 6, 2010 at 11:40 am

- If buying new, get the ConsumerReports car report- When buying from a dealership, be ready to walk away. If you are making an unreasonable offer, they’ll be happy to see you go. If it’s a reasonable offer, it’ll kill them.- When I bought my latest car, believe it or not, but I bought it directly from the sales manager of a large dealership. I called Saturday afternoon on a 3-day holiday weekend. I told him I was looking for XYZ car (the exact model, type, style, and even color). He checked their lot and they had one. I told him how much I would write him a check for that car. I heard the calc running. He asked me what everyone else was offering me. I said I didn’t do business that way: he could beat anyone else’s price and anyone else could beat his price – but I wasn’t going to tell anyone else his price. He then said he could do the deal but there was a $300 destination fee. I said the fee is fine, but I write the check for $xyz. Calc was running again. He asked if I could drive right over and I said “yes”. It was a deal.- Craigslist is a great resource for used vehicles. Go to your local Craigslist and decides if you want to look at Dealers + Owners or just one. Type in your vehicle and run search. Then, SAVE THE RESULTING LINK. It will enable you to go directly to the car/truck section and ONLY see the vehicles you are interested in – which is a huge time saver. Another big tip: you can then click the RSS feed link on your search results page and put the results into your RSS feed. This enables you to keep an eye on ANY used vehicle that comes up without even having to visit CL – it comes through our RSS Feed Reader.- If you are going to buy off of Craigslist, try to watch/monitor the listings for AT LEAST a month before making a purchase. Over time you’ll start to get a feeling for the market in those vehicles. You’ll recognize reposts and will see the same vehicle over and over…
+1

62 Lee May 6, 2010 at 6:52 pm

Dont forget liens. When you buy from an individual, you’re at risk of taking on more than you bargained for if the car has missed payments, tickets or warrants. You can do a lien check through your local department of motor vehicles. I did one, once, and although I don’t know if the law has changed since then, I was told by the DMV employee that I had to buy the car before they’d do the lien check. I told him that it was ridiculous to buy a car and THEN do the lien check, because then I’d be stuck with any possible liens on the car that I was trying to avoid by calling the DMV before purchasing it. He saw my point and asked for the VIN. After a moment at his computer, told me that the car was clear of any liens.

63 Matt May 12, 2010 at 4:10 pm

My Dad has always emphasized geographic area when considering a used car. For those who live in areas with very heavy winters, the roads are very (very) heavily salted and most of the time people don’t take the time to spray off that salt. The corrosion on the underbody of the vehicle can be tremendous and lead to a shorter life for those components.
We usually have taken a day trip to an area outside of our state where there’s less snow and thus, less salted roads. If you can’t get that far away, ask the dealer to put the prospective car on the lift so you can get a really good look under the thing. Great article though, this is the kind of information you don’t know you need until you need it.

64 Turling May 13, 2010 at 10:43 am

I just bought a 1975 International Harvester Scout II. Glad to see I did everything outlined.

On the CPO front, I’ve only had one experience, but it was horrible. I bought a 2002 Jaguar XJ8 from the dealer back in 2004. The whole CPO program was touted about how they change the tires of worn, replace the brakes if worn, etc. Good thing the car was still under warranty. I must have taken that thing in half a dozen times. Brakes needed to be replaced within 1,000 miles. Shocks came 1,000 miles after that. Cracked covers for the third tail light and the backseat speaker were somehow “missed”. I wonder if those programs aren’t just an excuse to add $$$ to the price.

65 Eric May 19, 2010 at 11:34 am

This helps a lot for later. Thanks.

66 Jasanna June 1, 2010 at 10:50 am

I’ve bought both of my cars from private owners and had a very good experience! You do need to know what you’re looking for and doing, so bring someone with you who does!

Expect to do a few things, but usually once you find that ‘right’ car from a person, it’s worth it! But there are a LOT of people out there trying to sell you sketchy cars!!

http://www.etsy.com/shop/soliloquyshoppe

67 Bill June 3, 2010 at 1:33 pm

Buy used, from a dealer, just out of or near limit of manufacturer’s warranty, pay the listed price (making salesperson very happy) and negotiate an extension (you decide how long) of the original warranty (not new warranty from private company, those are worthless). This gets the agent (salesman) working for you rather than against you. Their number, your terms. Simple.

68 Tom August 5, 2010 at 7:14 pm

When you are ready to make an offer…….do it standing in the lot…..DO’NT GO TO THEIR OFFICE……stand firm…..do not go into the office……they will bring the offer sheet to you. Give them YOUR PRICE and add the words “plus tax and license ONLY”. I was once buying a used car (at month-end) and after the deal was agreed to, they printed out the sales contract. I saw a “processing fee of $50. I pointed to my offer and said THAT WAS MY OFFER. The salesman became very upset and said that

69 Tom August 5, 2010 at 7:17 pm

When you are ready to make an offer…….do it standing in the lot…..DO’NT GO TO THEIR OFFICE……stand firm…..do not go into the office……they will bring the offer sheet to you. Give them YOUR PRICE and add the words “plus tax and license ONLY”. I was once buying a used car (at month-end) and after the deal was agreed to, they printed out the sales contract. I saw a “processing fee of $50. I pointed to my offer and said THAT WAS MY OFFER. The salesman became very upset and said that everyone paid that fee…he then asked me if I wanted to loss the car over $50. My response was “No…..you don’t understand…do YOU want to lose the sale over $50?????? The fee was waived.

70 Walter August 5, 2010 at 10:37 pm

Another option – I just found http://zautos.com on facebook…

71 jmorran September 26, 2012 at 11:09 am

Great info on buying a used car here, but if you want more than just text – see what you’ll actually need to do to uncover the vehicles true condition, you should check out vhound.com. They show you exactly how to do each step so you can easily inspect a used car yourself.

Good Hunting
jm

72 Al F September 30, 2012 at 8:03 am

I spent about 2-3 hrs reading this article and all comments. It gave me confidence in buying a used car now. Thanks all!

73 Mitch November 28, 2012 at 9:31 am

SMOKE SIGNALS: “Smoke” coming from a vehicle’s exhaust can indicate problems, based on the color: Blue = oil, Black = fuel; White = water (steam). Steam can be expected when a vehicle is started cold, as condensation in the exhaust system is burned off- But not during normal operation. Blue smoke just isn’t good. A little upon initial start-up mat indicate valve stem seals leaking. That can be lived with for a while. Lots of blue smoke means the rings are shot – major overhaul time. Black smoke can be simple or complex.

If there’s a “Check/Service Engine” light on, try to take the vehicle to a larger auto parts store. AutoZone will typically download the computer codes for free.
An empty coolant reservoir indicates a leak or lack of maintenance. A FULL reservoir may indicate an attempt to cover a lack of maintenance. The coolant level should be at or near the hot/cold level mark.

Move the vehicle and look for fluids that have leaked & dripped where it was sitting.

Go with you gut, not your emotions!

74 Leo December 5, 2012 at 3:23 pm

My biggest recommendation for buying a used vehicle is giving the prospective car, what i like to call, a “Auto Prostate Exam”.

This entails one wearing a latex glove, and running your finger inside the exhaust pipe.

If you see nothing but some fine rust or some light dirt, the engine usually is running pretty well, but if you get oil, sludge, or anything else, chances are, that the engine is burning oil, has a head gasket leak, or a possible cracked block.

75 Alex December 16, 2012 at 7:25 pm

1. I haven’t heard much talk of researching how well that make and model tends to last. Consumer Reports makes a guide to used cars.
2. Also, i’ve heard (Edumunds) KBB is the average price they’re offered for, not the selling price.

76 Andrew December 17, 2012 at 3:04 am

Ok now that I have read through the comments I know I won’t be re-posting advice. First I have NEVER bought a new car from a dealer. I have owned and maintained 17 cars since I started driving when I was 18 and I am 30 now. I have always bought used and come out with great deals. The average cost of a car that I pay for is 500-800. My total buying cost is just over 10K for all of the cars I have ever owned. Now for my advice to buyers when shopping private owner. When you get there check to see if the engine is warm. Did you call them and they knew you were coming so they went and drove the car or warmed it up to cover bad start ups or smoking or other problems that let you know it has not been maintained well. Have the owner start the car so you can watch and listen to the car start. Ask if there are any “speical” things you need to do to start the car. I have a 77 F150 that you have to pump the pedal first. That is normal with an old truck. Ask lots of questions but let them do all the talking. They may tell you of the story that they jumped the car that one time. Or how they drove to grandma’s house and hit that patch of ice. These are the stories to listen to. They will tell you more about the car then what parts they have changed. Also I sell about 6 cars a year that I buy and fix up. The 17 cars are the ones that I have personally owned and driven.

77 Creg January 19, 2013 at 7:52 pm

It’s important to get a used car report. I got mine from VinAudit. Just paid $5.5 after cash back rebate from http://www.dimedots.com.

78 Nchimunya February 10, 2013 at 10:51 am

Truly appreciate the advice from the main article as well as from the comments. Quite honestly, it’s too much to process for a novice like me considering I’m in a very different region and have to contextualise all that information. For me, it all sounds like do your best to get a good deal, for a good reason, at a good time, from a good source, with good advice, in good company, for a good value and good price, without being too good and all these are still not be good enough! I will add a prayer for guidance to make all the ‘goods’ best!

79 jerry February 11, 2013 at 12:35 pm

One of my secrets for buying used. I take it for a test drive and stop somewhere for 15 minutes with the automatic car in gear and let it idle all the while. It will find weakness fast.

80 scott March 19, 2013 at 10:44 pm

KBB always prices higher than edmunds and tends to be above actual market price. Recently I found a car through a dealer and was able to make an offer through email. We did all the negotiating before I ever got there, then just had to drive it and decide if it was worth the price or not. He gave me an out the door price before hand (includes tt&L) so we didn’t waste his or my time, and my wife’s stress level was much less maligned.

81 Marieny June 22, 2013 at 9:44 am

Thank you for great advice. It is also a good idea to check on prices of normal replacement parts such as filters, fuel pumps, alternators and starters. Some models parts can be very expensive to replace.

82 Lindsay Graham October 9, 2013 at 10:56 pm

I always find it fascinating that 90% of my clients (those that find us on Google) are men. Sometimes it is most manly to decide that there are better uses of one’s time than to go to battle with a car dealer. Though I was one once myself, my only goal in life was (and still is!) to make things easy for the client. Unfortunately, even equipped with Consumer Reports price and other resources I see listed above, it doesn’t mean the process won’t engulf a HUGE portion of time, and time sometimes better spent in more manly ways :) LOL!

83 hady November 17, 2013 at 7:56 am

thanks for the advice that i will for sure take it into consideration if the next time i go to buy another used car,

84 John Brown December 31, 2013 at 12:15 pm

A few more tips to throw on:

1. If you are buying a new car purchase the Consumer Reports profile for the prospective purchase and demand that you pay the price contained on the report. Dealerships HATE this but if you are firm most will give you that price. Don’t let them mislead you by adding on “fees” or giving you a song and dance about how CR underprices cars for the geographic area, etc. CR takes all that into account and the fair price contained in that report ensures the dealer makes anywhere from 1-3% profit on the new car. That is a good profit margin on new cars and fair to both parties. Just make sure to be firm and if the dealer won’t give you the CR price be prepared to walk. Most will, in the end chase you down in the parking lot to then make the sale.

2. Most dealers do not own the used cars on their lots outright. A lot use some type of financing just like many consumers use to purchase a car. Look on the Carfax report to see when the car was titled into the dealers name. Chances are they have a monthly payment due on or around that day of the month it was titled to them. That means if you go a few days before the payment is due you might be able to get slightly better pricing because the dealer will not want to make that payment. If you ask the dealer outright and offer to split the difference in savings most honest dealers will accept it as a fair offer. Also if a car has been sitting on their lot of awhile the dealer may be more inclined to get it off and make a sale then a car that has only been there for a few months.

3. Don’t dismiss financing options that a dealership may offer you. The rates tend to be the best around and sometimes if they use a particular service or bank the dealer will also get an cash incentive of a few hundred bucks. If you were going to pay cash ask if the dealer gets any incentives for financing and if so offer to split it. Most dealers will be happy to make an extra few hundred bucks on the sale with minimal effort and also help you out.

4. With loan interest rates at historical lows, you may be better off financing and keeping your cash in the bank. Inflation has been hovering around 3% but most car loans go for 0% to 1.9%. By making monthly payments instead of paying for the car upfront, you are actually saving money over the life of the loan because inflation is outpacing the interest you are paying. Also paying off a car loan can be a great way to beef up your credit score, especially if you are younger. And, if you don’t like the idea of making monthly payments for four or five years most loans can be paid off early for little to no penalty. (Make sure to check the fine print though or you could get a nasty surprise.)

4. Common financial wisdom seems to dictate never to loan money out of your 401k (if you have the option), but don’t dismiss the possibility outright. What kills people who loan out of their 401k is not paying back the money and then they get sacked with tax and penalties. If you are financially responsible and make the regular payments back into your 401k you will end up ahead more then if you go with bank financing. Again, this requires some strong financial fortitude and if you don’t make those payments it will cost you big in the end.

5. Most dealers will have “internet specials” on their websites or elsewhere in social media. Check these out. Sometimes an “internet price” is lower and less hassle then negotiating with the dealer. Just make sure to get all price quotes in writing preferably in email. Don’t let them give you prices verbally over the phone. In most states, a dealer has to honor a written quote. That is not true of a verbal one. If you go to the dealer with a verbal quote chances are the salesman is going to conveniently “not remember” it.

6. If you are in the used market, look for cars that are just getting off their lease. These cars tend to be in very good condition, have had dealer performed maintenance during the lease period, and are usually gently driven. Dealers also look to move them right off the lot because they are no longer making money on the car when it is returned. I found a two year old Ford Escape that just got to the dealer off lease. It looked like it had sat in a garage for two years and was barely driven. The dealer had all the service records and the Carfax checked out. Just because of the timing I saved almost $1,000 from what other dealers wanted and got a much nicer car in the process.

85 daniel February 5, 2014 at 2:13 am

Definitely Google the car you’re interested in and see what pops up. My wife and I bought a 2006 Chevy equinox from Certified auto in L.A ..supposed to be certified. Car had many mechanical issues ..they ran past the 30 day “certified” warranty ..and not even 10 months later and only 2,000 miles put on this thing..the engine blew. Googling this car pulled up many articles of how much a POS this model is except for us it was too late. Dealership couldn’t find anything wrong with it when we took it in 3 separate times within the warranty apparently so they said” tough luck not our issue. ..should have bought the extended warranty”.

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