Bill Gephardt posted an article on KSL warning consumers of the dangers of buying a used car.
Gephardt’s warning arises mostly because Utah has no lemon law that applies to the purchase of a used car. Buyer beware is the watchword. Gephardt is right that if you purchase a used car and its engine explodes five minutes later, you are usually stuck. There are car dealers that will repair such damage when it occurs so close after the purchase, but most won’t so don’t count on it.
What can you do to protect yourself when buying a used car? Here are a few tips:
Research Used Cars
Your first step when purchasing a used car is to research your available options. Consumer Reports is a good place to start. Consumer Reports publishes a Used Car Buying Guide every year and it will help you quickly pinpoint which cars are historically reliable and which cars are less reliable. Don’t let your unreasonable desires for a particular car convince you to buy one that has spotty reliability. You will regret it. Poor reliability costs you more than just increased costs for repairs. Periodic maintenance is more expensive and most, but not all, historically unreliable cars suffer from poor resale value as well. You lose money every step of the way if you buy an unreliable car.
Research Used Car Values
After you have narrowed your used car search down to a few options, go online at check the values of the cars. Kelly Blue Book and Edmunds are two excellent ways to compare cars and check current pricing. I particularly like Edmunds’ True Market Value (TMV) page. It allows a real-world comparison of all the costs of used car ownership. With TMV you can see just how much that dream car is really going to cost you over the years. It is eye opening to say the least.
Research the Local Used Car Market
Once you have decided on a particular make and model to buy start looking on the Internet and local newspapers to get an idea of what is available and where the original asking prices are set. Don’t use this to determine value or the price you should pay however. Sellers are notoriously unreasonable in their advertised prices because they expect to haggle down. Many of the ads are also scams. Browsing the ads however is crucial to understanding what else is available and may lead you to the perfect used car.
Have an Inspection Performed
Once you find the car you want, drive it, closely inspect it yourself, and have it inspected professionally by an independent mechanic. I cannot stress this enough. No matter how good the car looks, runs, and feels, it may have hidden problems that can only be revealed by taking off the wheels, checking the compression, checking the electrical system, and performing dozens of other inspections that you cannot do without the proper equipment and tools. Get an inspection! If the seller won’t let you take the car for a few hours to do one, RUN away from the deal. They are hiding something.
Get Everything in Writing
When you are ready to make your purchase keep in mind that you will probably be buying the used car on an “as-is” basis. That means once you sign for it anything that goes wrong is yours to fix. If the seller makes any specific claims of recent work, reliability, or dependability get those claims in writing. If you don’t and he lied, his claims are very difficult, if not impossible, to prove in court. Get everything in writing.
Extra Used Car Purchasing Tips
There are other tips you should also follow to get the best deal. For example, when buying a used car from a dealer always obtain outside financing from your bank or credit union before going to the dealership. Don’t discuss financing until the price of the car is set and don’t take financing from the dealer unless you want to overpay for both.
Failing to come prepared with prearranged financing can also subject you to a common car dealer scam known as a yo-yo sale. In yo-yo sales, unscrupulous car dealers let you take the car home before the financing is finalized. They wait a few weeks and then call with a demand for you to either sign more expensive financing arrangements or return the car. You lose money no matter which option you select and in many cases, you also lose your trade-in vehicle.
You should also never give your trade-in to the dealer without a spare set of keys on hand. A well-known dealer trick is to keep you captive by pretending to lose your keys when you want to walk away from a bad deal. Bring the extra set and don’t play that game.
Perhaps my best advice to follow when buying a used car is to always be willing to walk away from the negotiating table. If the seller is being unreasonable, walking away is the best way to bring him back to reality. Never fall in love with a particular car so much that it clouds your judgment. If you do, the seller will make you pay more.
Hopefully these tips will help you next time you purchase a used car. Be cautious and walk away if anything seems wrong. Do your homework, bring outside financing, and get an inspection for the best deal on a used car.