Buying a used car doesn’t have to mean you’ll end up in a 1989 Buick your friends will nickname “Rusty”. It actually may mean you can get a cooler ride for less dough. Used cars don’t lose their value as fast as new cars do (we’re talking up to thousands of dollars in depreciation when you drive a new car off the lot—yikes!) And spending less money on your car can mean more money to spend on features and accessories you really want (can you say MP3 hookup or navigation system?)
But there can be a downside to buying used—you could be buying someone else’s headache, so doing your research is essential.
First stop—the Web
Tear yourself away from the latest YouTube video and start clicking around car Web sites such as Edmunds.com, kbb.com, vehix.com to get a feel for which vehicles you like, and which are in your price range. Web sites such as consumerreports.org that provide information on used cars and how they have stood the test of time. The more you know, the better. So unleash your inner Sherlock Holmes and start digging for information.
Cover your bases
Each state has different laws about buying and selling used cars. Some require car dealers to perform safety inspections on used cars they sell, and some require dealers to disclose any problems in a car’s history. Each state has also different legislation regarding lemon laws, so check out your rights before you get too far along in the process. To find out more information about each state’s lemon laws, visit the Better Business Bureau’s State Lemon Laws Web page.
Dealer or private party?
You also have to consider whether you’ll buy from a dealer or a private party. Dealers can be a better option in case something goes wrong, but the price tag may also be higher. However, buying from a private seller can be a huge risk—make sure to assess the seller carefully. If you’re seriously considering buying a car from a private seller, it’s essential to have an independent mechanic inspect the vehicle. Yes, you have to pay for the inspection, but remember the mechanic can identify if anything is in need of repair and help you avoid buying someone else’s problem. This could save you a lot of money in the long run.
The details—maintenance, warranties, and insurance
Mileage is important (low is better than high), but you should also look at maintenance records. A record of timely, quality maintenance is as important as mileage on a used car. Make sure to buy a used car from someone who knows the vehicle’s history.
Get a vehicle history report for any vehicle before you buy. Some dealers may provide these free of charge, but you get them online for any vehicle for about 25 bucks—all you need is the Vehicle Identification Number (VIN). Visit CARFAX or AutoCheck to find vehicle history reports.
If you’re buying from a dealer, ask about the warranties that come with the car. Make sure the car’s driveline, mechanical systems, and complex electronic systems are covered. If your vehicle carries a remaining factory warranty (lucky you!), make sure to have the warranty transferred to your name. (Heads up—you may have to pay about $100 for this transfer.) You may decide the remaining warranty is enough, or you could decide to buy extended service coverage or mechanical breakdown insurance. Keep in mind that buying additional insurance is hedging your bet that you’ll pay more for repairs than you will for premiums.
Get a fair price
To determine a fair price for a vehicle, visit sites such as kbb.com or Edmunds.com, or call your credit union and ask for the “loan value” for the make, model, year, and condition of the vehicle you’re looking at. While you’ve got your credit union friend on the phone, ask about pre-approved financing for used cars—this can save you lots of money over dealer financing, and it’s nice to have one decision made before you step foot in the dealership.
Copyright 2009, National Credit Union Association, Inc.