Buying A Used Car

You drive too much

When shopping for a used car you can take two very different routes. In my younger years with much less cash I always bought used from a private party. But you can also find some pretty good deals at the dealer as well.

When shopping for a used car you could start with your newspaper, or better yet try something like Craigslist. Don’t limit yourself to your immediate area if you travel often or have family in areas a little farther out. Increase your options.

Secondly, you need to come up with a list of questions to ask about the car. Some things that are important:

1 – Condition of Car
2 – Does it have a salvaged title?
3- How many miles are on the car?
4 – What are the features on the car (sound system, type of engine, power doors and locks?, etc.)

This is usually my preliminary list. It is impossible to tell if a used car listing is a good deal until you gleam this information. If the deal still looks good after these questions are asked, then make an appointment to see the car and do a test drive.

Two notes. I would never buy a salvaged car. The reason though is in this area there are plenty to choose from at very low prices that have no dings in the title. Just keep in mind even if you are willing to buy salvage, how will it affect the resale? If you have no other options you might find a steal. But I don’t know much about salvaged titles than that I personally steer clear.

Secondly, in California a car has to pass Smog inspection before it can trade hands. Other states may have similar rules. In California that is one of the first questions I ask – if a car has been smog checked recently. If not, it’s okay, as long as the seller takes responsibility to get it done. & then before the car trades hands I Would personally get it smog checked again myself. It is easy to fake a passing and one of my worst car buying experiences involved a fake smog check. But it was our follow up that helped us to decide that we didn’t want to do business with his character. Never buy a car from someone once you find trickery is involved. I made this a simple rule in the future to help not to fall for a bad car deal.

Anyway, what kind of car should you look for? When going used there are two very different angles you can go. You can buy a really old Toyota, Saturn, Honda with a lot of miles and get a really nice car in the $1k-$3k range. The two best cars I ever owned were a Toyota with well over 150k miles (lasted 7 years with very minimal repairs) and a Saturn with about the same amount of miles (this one I used as an interim car when I wasn’t ready to shell out the big bucks on a large family car, which was a long-term goal, but when I finally realized convertible and new baby don’t mix). Those are the car brands I lean towards due to longevity and relative lack of repairs. When you can buy a $1k car for a few years and sell it for $500, never having spent more than a couple hundred of years on a repair, you have it made. These cars are of the safest and most reliable. Plus, if you do get a bad deal, you aren’t out too much money.

On other end of the spectrum you can find a car that is a lot newer. A particular steal I always look for is a car that is an older make, but a car that has been mostly garaged and has few miles. I bought a 1992 Ford Mustang convertible in 1999. It had been driven so little it still had a new car smell and as absolutely immaculate. At $5k you can’t find a much better deal for an all but brand-new car.

Once you pick out a car that sounds good on paper, make that appointment and test drive it. For the convertible I took it through the car wash to test for leaks. I generally found car sellers were fine with you taking the car for long test drives and visits to your mechanic. Any seller who isn’t is one I would not deal with.

If the car drives well, check the car inside and out with an eagle eye. Always check the oil and fluid levels. Look for obvious signs that the car has not been maintained. I generally have found over the years that people that maintain their engines also keep their cars immaculate. The more immaculate the car inside and out, the better you can assume it has been well taken care of. I have looked at cars that had little (very old) oil but the car was trashed anyway. The two really seem to go hand in hand. But if you come across someone who is a neat freak but not big on maintenance, a quick look under the hood will give you some clues. Also, check the body very carefully. Body damage is often obvious if you just look closer. Always ask if the car has been in any accidents too. This is a huge area to consider and to have your mechanic look at (hopefully one who specializes in body work).

Of course the next step is to ask how many owners the car has had and if the seller has repair and maintenance records. & ask if you could take the car to a trusted mechanic (or something like AAA) to have a once over from a car professional. I have never had anyone say no to this.

Generally, from there, if the car is good I would negotiate a price, dependent on outcome from my mechanic’s check. Just keep in mind that people selling cars are usually asking too much. Before you look at the car you should look up the blue book value and see what a good price is dependent on the information you have. In years past a general rule of thumb was an average between wholesale and retail, but these days also shares private party values, which is where you want to look. The general rule of negotiation is they start high, you bid low, and a compromise is made. However, not all car sellers are negotiators. I have had many people tell me what the least amount of money they would accept was (well below blue book or asking price). If someone tells you that, jump on it. In the end though, ask a price that is reasonable, but keep in mind that if there are 50 cars for the same make and model and year listed in the paper that the seller has to be pretty desperate. Adjust downward a bit if you get the feeling the car has been sitting a long while. & if you just can’t agree, walk away. Either it isn’t worth it or you may just be able to call a bluff. For a rarer car of course, you may have to offer a little more. My general experience is sellers like to act like they have buyers lined up and the reality is they don’t. Living in the big city myself, there are just way too many used cars to go around.

The final step once you agree on price (& after the mechanic check) is to exchange money and transfer title. In California you can not sell a car without a “pink slip.” So make sure they have the proper title and documentation and are able to sell their car. Go as far as to check their ID, that it matches the title. You can never be too careful when buying used. Whenever we have bought a used car we have always written up a small contract with the purchase price and had the seller and buyer sign. Doesn’t have to be anything fancy. But just something in writing to defend yourself. A written contract is better proof than an oral contract if a dispute arises from the sale. I find it best to do an initial contract, and probably redo it if you have to further negotiations after a mechanic check. Regular repair and maintenance is not a reason to walk away from a deal, but you can have the seller pay for the work, or adjust the price downward. After my bad smog check experience I usually rather bargain on the price and let my trusted mechanic do any work that may be needed.

There you have it, a used car on the cheap. Our family has bought so many used cars using this method and have been blessed with many great deals, so I generally don’t have the fear of buying used that most do. But of course, by being slow, careful and methodical you can weed out most of the bad deals pretty easily. I think the biggest rule of thumb is just never rush into anything. When a seller is rushing you, something is wrong. Don’t fall for it. There are plenty of other fish in the sea.

If you really want to buy a car at a dealership, I have actually found a way to save a significant amount of money going that route as well. We have found that in the spring, the car dealerships are big on clearing out old models to make way for the new. I am quite wary of car dealers myself after having many bad experiences walking into a car dealership wanting to pay cash for a modest used car and being run out because I could not get talked into buying much more than I could afford.

Dealers would seriously rather not take your business than let you pay $10k cash for a car, often times. But my husband has always been pro-dealer (while I have much disdain) so in the spring of 2001 we were car shopping, and ran out of many dealers with our cash, when we came across a dealership trying to unload all of their old Ford Escorts. The car was absolutely made for my husband, one year old, and had a “1 at this price” listing in the paper for $7999.

Where we had been willing to spend $10k on a more used cars, we jumped on the deal. We have never had such a new car and the car has yet to have a repair nearly 6 years later (knock on wood). Being skeptical I would still see this as a fluke, but we tried the same angle at a different dealer last spring. We had a particular minivan in mind and kept an eye in the paper, and around spring of last year it was clear the dealerships were clearing them out for the newer models. So we went in, had about 5 identical models to choose from – “5 at this price deals” – and to top it off we were able to negotiate a tad on the price. Nothing to write home about, but if you have ever asked about those cars you know the dealers always say, “oh, this is the LOWEST we can possibly go – we’re losing money!!!” The truth is they want those babies off their lot to clear room for the new ones. You would think there would be mad rushes for such deals, but there really isn’t for most used makes and models. So with time my husband has taught me that you can find a good deal at a dealership. Both these cars were well under warranty and had little in miles.

I also had a couple of friends I have talked to since who did the same for brand new cars, just waiting for the ones from the last year that never sold, then the price came down significantly. & that is for a brand new car! As for our used car purchases, they were prior rentals, which I hear good and bad about. For us they have been great cars, and I like knowing that the cars were well maintained by the car rental companies. I guess time will tell if the car renters were perhaps too rough on the cars initially.

Finally, some reason why I like buying used cars, and think they are safer and better overall than going new:

1 – Everyone I know personally who had a “lemon” had a brand new car. I like letting a car be driven a while and the kinks worked out. Going used you are less likely to shell out a lot of money for a car that is bad off the assembly line.

2 – Back to #1 – most warranties are over-rated. I hear too many stories about things not covered (when it comes to a lemon) and an expensive repair and maintenance schedule to keep up the warranty. I’ve never regretted not having a warranty, and have saved a lot of money not paying big bucks for “new” and “warranty.” Having a trusted mechanic keep up our cars is a much better dealer than going to a dealer for regular maintenance as well.

3 – The more used a car is the more information is available. I personally wouldn’t buy a car that hasn’t regularly lasted 200k+ miles on the road. A car has to be a couple of years old before you can get a feel from the super-commuters how well the car holds up with time. The longer you wait, the more information you gleam.

4 – I always find it ironic when people tell me used cars are not safe. I always wait for extensive crash testing data before buying a used car. I am very particular on this. There just is not a lot of info on a brand new car, but with time more info emerges about the quality and safety of the particular make, model and year.

5 – Insurance is less expensive, and if the car is cheap enough you may find you won’t even need collision insurance.

6 – You worry a lot less about dents and dings, and auto theft, when you drive a 15-year-old car you paid $1k for.

7 – It’s a lot easier to avoid debt and save up the cash to pay for very used cars.

Hopefully I have knocked down some of the usual myths about buying used cars. I can never wrap my brain around the idea that my friends will regularly spend $20k+ on a new car every few years while turning up their nose at the idea of how expensive a used car can be with repairs and maintenance. Of course, at the end of the day it bothers me little. The less people buy used cars, the better deals to be found for those who do. I always say that not driving new cars has afforded us a much more grand lifestyle than we could afford otherwise. Now that we are 30 and have built up some significant assets we felt maybe we were ready for some newer cars, but frankly, I just find them overrated. I wouldn’t be surprised if the resort to a really used car for our next car. Better yet, maybe we just won’t have to upgrade for another 20 years.

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4 Responses to Buying A Used Car

  1. Amy says:

    Sound advice. I was always afraid of buying a used car because of what I perceived would be major reliability issues. I was prepared to take out a loan and purchase a Honda Accord or Civic in the $10k range (which actually doesn’t get you a very new Honda, I learned, so that plan wasn’t really going to work) when a friend of a friend decided to sell her almost 20-year-old Civic. I bought it for $1,000 and have found it to be very reliable. Even though I’ve spent about $2,000 repairing it over the course of two years, having an older vehicle has saved me a ton in insurance costs and I don’t have to deal with a car payment, so I’ve still come out ahead.

  2. Max says:

    I keep telling people, but they don’t listen: the best used car you can ever buy is an ’81-’85 Mercedes-Benz 300D / 300SD, especially if you’re willing to get your hands dirty once in a while (change oil, adjust valves, etc). I bought mine for $4k nearly 3 years ago off eBay, and drove the hell out of it (including cross-country), and it’s just getting broken in (140K miles). Besides, with gas prices pushing $4/gal this summer, you can always fill this trusty diesel with used peanut oil.

  3. Clever Dude says:

    Excellent article Teri! I too was always afraid of used cars. I thought I would get the best features and options on new cars, but I agree that you get alot more information about the reliability of a used car than a new one, even of the same model.

    At this time of my life, I’m just interested in other things than new gadgets in my vehicle or a flashy ride. I want utility for a reasonable price.

  4. Pingback: AskDong » One Topic: Cars and Driving

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