buying used cars

Guide to Buying a Used Car Without Going Crazy

Meg Favreau — Mon, 02 Jan 2012 11:24:09 +0000

One night about a month ago, I was telling my friend about the brain-frying frustration I was experiencing trying to buy a used car off of Craiglist. "I feel like I can spend infinite time on this," I told her, "And there are infinite options."

"Everyone I know who has tried to buy a used car on Craigslist has gone absolutely crazy," she said. That response was like getting bird poop in your eye and then being told it's happened to other people — it's nice to know you're not alone, but it really doesn't help the situation.

It was a good reminder of how stressful buying a used car is, though, especially when you're buying from an individual though a classified site like Craigslist like I was. I spent a LOT of hours researching vehicles, goings for test drives, and heading to check out cars only to be told they just sold to someone else. I learned a lot in the process, and I did finally find a car — one that was in good condition and in my price range. No matter what you do, buying a used car is going to be stressful — nobody wants to throw thousands of dollars away on a lemon. I can't tell you that you won't be stressed out, but here's some information I wish I had known up front that will hopefully make your car-buying process easier. (See also: 5 Myths About Car Insurance)

A Few Things to Consider First

First of all, the suggestions in this article pertain primarily to buying a car from an individual or a dealer that does not provide certified pre-owned vehicles. My budget was $4,000 — low for a car, I know, but I wanted to avoid car payments at all costs. This meant that certified pre-owned vehicles were out of my price range.

Two of the primary things to check on when you're buying a used car have to do with the title, and you should find out about these before you even look at the car. First of all, make sure that the seller has the physical title, and that the title is in his or her name. If you hand over payment for a car, and that car turns out to have a lien on it (i.e., money is still owed to the bank for the car loan), you might not end up owning the car you just bought.

Also check whether or not the title is a salvage title. A salvage title means that at some point, an insurance company deemed the car in question beyond salvageable. While sometimes salvage titles pertain to theft and the car itself is fine, it often means that the car was in an accident. Even if the car was rebuilt, the car's structure is usually left weaker after this type of an event and is generally less safe.

Narrow Your Options

One of the biggest problems I had with buying my car was getting overwhelmed by choice. My main criteria was that I wanted the car to "run well for at least two years." But that left a huge number of vehicles for me to choose from. I felt that with my price range, I needed to take what I could get. But with some urging from my boyfriend, I further refined my criteria. I wanted a short car, because I only have street parking, and I wanted it to have under 100,000 miles on it. I also wanted to buy a car from someone who was moving or changing cars for a good reason (such as getting a bigger car for an expanding family), because I figured that'd net vehicles in better condition. While part of me felt like I might be missing out on a great deal by focusing my search like this, it did make things easier.

Make Space in Your Budget

Remember that the cost of the car itself isn't the only cost. There might be an increase in your insurance, DMV fees, or unexpected mechanic costs. Include funds for these costs in your car-buying budget.

Do Your Research

I did a LOT of research into the cars I looked at. Here are the big four sites that I used.

Kelley Blue Book

The Kelley Blue Book is the standard for finding what used cars are worth. Plug in the information on a car you're thinking of buying, and it will tell you how much suggested selling price of the car is. The site will even provide different price levels based on the car's condition.

Edmunds

Edmunds provides car reviews and gives suggestions on whether or not a particular used car is generally a good buy. If it isn't, they'll generally give suggestions on similar cars to look at. They didn't have information on a couple of cars I was interested, but in general, it was a very helpful site.

MSN Autos

The MSN Autos site has what I found to be one of the most valuable resources in my car search — reliability charts that show what problems different makes of cars usually have and the cost to fix them. For example, the 2002 VW Cabrio has moderate engine problems, but the repairs are all relatively inexpensive.

Carfax

Once you have a car you like, enter the vehicle identification number (VIN — it's at the base of the windshield), and Carfax will give you a report on the history of that car. It steered me away from an otherwise great-seeming car that turned out to fail the California emissions test five times in a row, and it showed me that the car I did eventually buy had no serious problems.

Check the Car Out

If you see a car you really like, make an appointment to see it as soon as you can. If it really is a good car at a good price, there is an excellent chance that someone else will buy it before you get there. This happened to me several times.

Get someone to go with you. Not only do you probably need the ride, but a second person can provide lots of help. My friend both helped me inspect cars and provided a voice of reason when I wanted to settle for a not-so-great vehicle just to be done with the whole process.

Check the car out carefully. Hopefully, this is a "duh" comment. There are a lot of great resources online already about what to look for — check out About.com's 10 Questions to Ask When Buying a Used Car From a Private Seller or Consumer Reports test drive checklist. If you have a trusted mechanic, arrange for him or her to look at the car.

If you are buying from a dealer rather than an individual, see what your warranty options are.

Buying the Car

Do your research to get as good of a grasp as you can on your state's car sale laws. We all know the truth to various stereotypes about the user-unfriendliness of the DMV, so this might not be easy. But a good scouring of your state DMV's website should give you the information you need about paperwork, when you need to report to the DMV, and fees.

Make sure to get documentation of everything associated with the sale, and pay with a cashier's check, not cash. If you didn't get the car checked by a mechanic before, bring it by soon to make sure everything is okay.

Above All, Be Patient

Remember what I said at the beginning about feeling like there are infinite options? I wanted so many times to give up in some way — to settle for a vehicle that wasn't really what I wanted, to go out of my price range and get a loan, to break down and whine about the fact that I don't live in a city with good public transportation anymore. But with some patience and research, I purchased a car that was kept in excellent condition and fit all of my criteria.

I'm thrilled about my new used car. I hope you enjoy yours too.

Do you have any other used car buying advice? Share in the comments below!

This article is from Meg Favreau of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The game of Haggling: How to Get a Great Deal on a Used Car

Sierra Black — Tue, 27 Oct 2009 15:00:02 +0000

My husband and I bought a car over the weekend — a 2008 Mazda5. At the car dealership, I told my kids that we were playing an exciting game called "Haggle" with the car dealers. In this game, the car dealers want us to pay a lot of money for a car, and we want to get a very good car for a little money. All afternoon, the girls would whisper, "Are we winning?" I think we won. We bought our car for less than 75% of the asking price, and got an extended warranty at half price. They gave us a good value for our trade-in and a very low interest rate on our loan.

Here's how we did it.

1. We had a plan.

My husband is from Argentina, where they haggle over the price of a cup of coffee every morning. He's much more used to talking down a price than I am. We agreed in advance that he would do all the direct negotiation with the car dealers. I'm a journalist by trade, and good at research. My job was to find the right car, research our options and give him all the information he needed to get a great deal.

2. We knew what we wanted.

Our household keeps very detailed financial records, so it was easy to look back and see exactly how much driving we'd done in the past year. Since we have three kids, we knew we'd need a car with three rows of seating, which limited our options a lot. Beyond that, our priorities were safety, affordability, reliability and fuel efficiency, in pretty much that order. We wanted to buy a used car, but a gently used one.

3. We did our shopping and market research online, not at the dealership.

We used edmunds and Consumer Reports to research all the available six- or seven-passenger vehicles. After narrowing our choices to the Toyota Sienna, the Honda Odyssey and the Mazda5, we checked out local dealerships. Most of the dealers in our area have some of their used stock advertised online, so we were able to choose a few specific cars to look at.

4. We played our cards close.

Things we did not share with the salespeople included: how many kids we have, the fact that we had no working vehicle, where we live, how much driving we do, what we liked or did not like about the cars we drove, what our budget was. This was possible because we knew exactly what we wanted. Walking onto the lot and asking for a specific vehicle from their inventory made it clear that we were serious buyers, but also left little room for exploratory questions. Because we were not browsing at the dealership, we didn't have to enlist the salesperson's help in finding what we wanted, and when it came time to negotiate, he didn't know how much we wanted the car.

5. We were not afraid to walk away.

Even though this was the right car for us, it wasn't the only one. All that research before going shopping paid off here. No matter how intense negotiations got, we knew we could get a good car for the money we wanted to spend from someone, so we didn't stress if it wasn't this car at this dealer. Staying focused and calm made us more effective bargainers.

6. We stayed neutral.

This "we" really means my husband, who as I mentioned above did all the talking during the business dealing. He refused to get caught up praising or criticizing the car they were negotiating over. He just stayed focused on the money, and the deal. He made it clear that he wanted to buy a car, and that this car was a perfectly acceptable one to buy, but only for the right price.

7. We had competing offers.

This was the trump card. We negotiated a deal on an older Sienna before going to see the Mazda. As my husband talked price with the Mazda dealer, he said, "Look, I can buy a Sienna down the street for $5K less than you want me to pay for this car. It's an older car with more miles, but it's bigger and more luxurious. Your car is not worth more to me than that one." The salesman knew we were willing to walk away, so he matched the price.

8. We let the little things go.

After a price had been settled, we were treated to a classic used car sales trick where the price magically crept up $1,000 because of some technical detail with our trade-in. We could have gotten angry and demanded the lower price we'd originally agreed on. Instead, my husband let it go. As soon as he was done with the sales office, he complained to the business office about the switch, and they apologized and gave him a $3000 extended warranty at half price. We came out ahead, and skipped a bunch of unproductive fighting with the salesguy.

9. We were not afraid to be rude.

When the finance folks said 6% was the best rate they could possibly give us on a car loan, my husband took out his cell phone and called AAA for a competing offer from the lobby of the dealership. Suddenly the dealers offered us a 4.6% loan.

Ultimately, we got a great deal on exactly the car we wanted. A better car than we thought we could afford when we started shopping, and one that we hope will be with our family for the long haul. Good luck with your own car shopping adventure. Please share your car buying tips and tricks in the comments.

This article is from Sierra Black of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Seven Tips For Buying a Second Hand Car and Walking Away Happy

Nora Dunn — Thu, 31 Jul 2008 04:30:23 +0000

I got burned recently buying a second hand car. It doesn’t help that I was in a foreign country (and was struggling to grasp the local policies), and in a hurry to boot. But even if you are buying a car on your own turf, there are generally a few good rules of practice:

Visit your local Vehicle Registration Office before you sign on any dotted lines

Yup. You may have to stand in line and deal with what seems to be a worldwide inefficiency that comprises government offices. But you can also arm yourself with information as to your rights, the requirements of the seller, and various obscure laws.

In Australia for example, I discovered a Vehicle Information Package that the seller can (but is not required to) provide the buyer with. It contains information about all the previous owners of the car, as well as possible liens and accident/stolen vehicle reports filed.

In some places this is mandatory, which is also something good to know. A seller trying to save a few bucks by not getting the report may end up sticking you with not only the cost of getting the report when you try to register your new wheels, but the nasty surprise of what’s in it.

Get under the car

Even if you will get your shirt dirty, and don’t really know what you’re looking for, get under the car. Anybody can see if there is a gaping rusted out hole in something, or if there are leaks that should be addressed.

Besides which, it makes you look like you know what you’re doing, which will put a shady seller on guard.

Take it on the highway

While test driving your potential wheels-to-be (we don’t have to tell you to test drive it, do we?), take it on the highway if at all possible. Cruising residential streets will only give you a partial picture of how the car drives. Get it to highway speeds and you may discover a terrible rattle or shake, or misalignment that could be dangerous but that would be missed in a general mechanic’s safety check.

Test everything

And I mean everything. All windows. All doors. Trunk latches. Key holes. Seat adjustments. Seat belts. Lights. Wipers. Turn signals. Radios. Dash functions. Odometers and speedometers (a pitiful lesson learned from personal experience). There’s nothing worse than buying a car, and then experiencing the slow and agonizing discoveries that your new wheels really aren’t all that new, nor are they fully operational.

Take it to a mechanic

I’ll admit, I’m the first person to want to skip this step. It’s costly, it takes time, and I don’t have a mechanic I trust. And if you are buying the car in a place where a safety or road-worthy certificate is required, you don’t need to also run it by a mechanic, do you?

Yes. Yes, you do. Personal experience: The mechanic who checked off the car I bought as being road-worthy (a certificate obtained by the seller more often than not, read: they work for the seller, not you) managed to miss the simple fact that the odometer doesn’t work. So much for the low mileage on the car I purchased.

Negotiate

Most sellers price their car expecting to be talked down at least a little bit. So try to talk them down. The worst they can say is no, at which point you can decide if you still like the car enough to accept their asking price. There’s no harm in asking for a discount.

Trust your instincts

When I was buying my little piece-o-junk, there were some small warning bells going off in my head. Although the couple seemed very nice, there were a few times when their stories didn’t match, or they contradicted themselves during our negotiation period lapsing a few days.

I managed to find excuses for every contradiction though, without addressing them. Maybe I was afraid of confrontation, or maybe I just wanted this deal to work. Either way, I’m stuck cleaning up the mess. And if I had heeded my instincts, I might have walked away and saved myself a bunch of heartache.

It bears noting that if you are purchasing a second hand car from a dealership, there are often rules in place to protect you if the car is a lemon. But with a private sale, much of the liability (or at least the pain of eliciting justice) rests in your hands. Do the right thing, and you’ll end up having a car you love, not one you can’t stand.

What tips or personal experiences do you have for our readers on buying a second hand car?

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: