HOW TO BUY A USED CAR
Most of us want to know
how to buy the best at the best possible price.
Many people feel that
they might buy a newer car than an older one.
With improvements in the
quality of automobiles over the years, a well-maintained car should remain
reliable for at least 10 years and 100,000 miles. The average life span of a
vehicle is 12 years or 100,000 miles. On average a person sells a car when it
is only 4 years old with just 40,000 miles on it.
If you are looking for a
new model, buying a used car of the same style, only a couple of years old can
really be a good deal. The biggest percentage of a new car's value is lost in
the first year of ownership. Accessories such as expensive stereo systems,
power assists and convenience options are far less a factor in resale pricing.
In addition, by the time
a vehicle is a couple of years old, even minor problems should have been
discovered and corrected.
With the average price of
a new car increasing every year, it is not surprising that the fastest growing
segment of the auto industry is the used car market. In the past decade, used
cars have become increasingly better values. Buying a car that is just a year
or two old can save considerable amount of money over the price of a new model.
Decide on the year, make,
model and options you desire on the vehicle. Do you need a family vehicle or an
economical model for a college student? Also, decide what accessories you need
or would like to have.
Ehen buying a car pay attention to:
Check the classified ads in the local
newspaper to determine what advertisers in your area are asking for the type of
car you want. The difference between wholesale and retail value will be your
bargaining range.
Financing/Insurance
Check with local banks
and credit unions for financing in order to make comparisons with dealer
financing. Be sure to determine the amount that the bank or credit union will
finance for a specific model. Also consider obtaining preapproved
credit, which would eliminate dealer pressure on the purchase of a vehicle.
Check with your insurance
company for a quote on the vehicle you want to purchase. Can you afford to pay
insurance and car payments? Also be sure to allow a little "extra" in
your budget for unexpected repairs.
Check your local Better
Business Bureau, Consumer Affairs Office, and the Department of Agriculture and
Consumer Services (1-800-435-7352) for information on local automobile
dealerships.
Make sure the dealers are
licensed by the Division of Motor Vehicles. Ask to what professional
associations they belong (Florida Independent Automobile Dealers Association,
Chamber of Commerce, etc.). How long has the dealership been in business?
Where to
Buy
A used vehicle is a major
purchase and requires comparison shopping for price and value to find the best
deal. There are many sources available to today's purchaser:
- new car dealers,
- used car dealers,
- rental car companies,
- leasing companies, and
- private individuals.
New car dealers generally
keep only the best cars and usually give them a thorough inspection. In
addition, consider buying from a dealer who handles the particular brand of
vehicle that you are interested in. Look for a full service department and a
well stocked supply of parts. They may offer a parts and labor warranty. Be
sure to visit several automobile dealerships.
Rental returns (also
referred to as program cars) are often an excellent value. These vehicles are
typically less than two years old, well equipped and maintained, with good
warranties. Some "unexpected places" to look would be domestic
dealers for used imports or luxury dealers for mid-priced sedans. Find a
friendly salesperson that you are comfortable with and ask questions to
determine the person's knowledge about cars.
Private individuals are
another source to be considered when purchasing a used vehicle. However, a
private party may not necessarily offer a better deal. Buyers may end up
overpaying for a car because they somehow assume they are getting a better deal
from a private party.
One benefit is that the
potential buyer can meet the seller face to face and inquire about any mechanical
problems, who was the principal driver, why the
vehicle is being sold and request maintenance records.
When purchasing a vehicle
from a private individual, there are no warranties of any kind. It is strictly
"buyer beware". In addition, the buyers will
have to provide their own financing for the vehicle or pay cash.
Outside
of Car
Look at the vehicle
during the daytime as darkness may hide problems. Do not look at vehicles in
the rain, which hides nicks and scratches, as well as making thin, worn paint
look slick. Be sure to concentrate on big defects and not minor repairs that
can be made easily and inexpensively.
Prepare a checklist for
both the interior and exterior of the vehicle, as well as those items to test
while driving. Take a general look around the outside of the car. A very common
practice is to have the car detailed to increase its appeal. Usually this
includes a thorough cleaning inside and out, waxing and the repair of minor
cosmetic items which can hide abuse or "wear and tear".
Examine both sides of the
car from a distance (both front and back). Look for ripples, waves, poorly
fitted panels and mismatched colors, all of which may indicate that body work
may have been done. Look for dents or rust around the bottom of the doors and
fenders. Bubbles along molding or chrome indicates
rust underneath. Also look under the vehicle for rust as well. If the rust has
gone through the metal, you could be looking at major repairs.
Check for welding spots
on the frame which may indicate a serious accident or repairs. Open and close
the doors, hood, trunk or hatchback. Be sure they fit and are easy to close
without slamming, sagging or sticking.
Conditions noted
previously may indicate that the car was wrecked, poorly kept, or has been
driven excessive miles. Stand back approximately 10 to 15 feet from the car and
see if the car is level. If one corner seems lower than the others, it suggests
a broken spring or other chassis or suspension problem.
Check the shocks by
pushing down on each corner of the car and letting go. Your car should bounce
upward only once and then settle back to its original position. If the car
bounces several times, new shocks may be needed.
Check the tires. They
should be in good shape without sidewall cracks. Uneven tire wear may indicate
improper wheel alignment, tired shocks or worn front end components. In
addition, check the inside of the tires for brake fluid leakage (indicating
leaking wheel cylinders).
Look under the car for
oil spots, or leaks from the transmission, power steering or shock absorbers.
Open the hood and check belts and hoses for cracks or wear. Remove the radiator
cap. The coolant should be a clean, greenish (or blue or yellow, depending on
brand of coolant used) color. Brown sludge inside the radiator neck may
indicate poor maintenance.
Pull out the oil
dipstick. If the oil is gummy or grayish, the engine might have serious
problems. If there is a black buildup near the top of the dipstick, smell it. A
burnt smell indicates that the engine or transmission has been run hot. The
automatic transmission fluid should be clear and reddish in color, not brown or
black. A burnt smell or low fluid level indicates neglect.
Be sure and check the
fluid level in the master cylinder as well. If the fluid
level is low, check for leaks and have brake pads checked. Look inside
the trunk. Make sure there is an inflated spare tire, a jack and a lug wrench.
Inside
of Car
The interior can give you
a good idea of the overall condition and how well the entire car has been
maintained.
Check the mileage to be
sure the car has not been used too much for the price being asked. Today's cars
average approximately 12,000 miles per year. In addition, compare the service
stickers on the door jamb or under the hood to see if the recorded mileage is
consistent with the odometer reading. It is possible to obtain a history of
service as well, depending on where the vehicle was serviced.
Check the condition of
the seats, belts and carpeting. Lap belts and shoulder harnesses should be in
good shape with no rips, tears or frayed webbing. The upholstery should be
clean with no large rips or cracks.
Check the windows to see
if they open and close easily. Manual windows should crank smoothly. Power
windows should not hesitate. All glass should be free from serious cracks or
scratches.
Look at the brake, accelerator
and clutch. These pedals should work smoothly without strange noises or
binding. Check all exterior lights and flashers on the car to ensure they are
operating properly. Start the engine and check the warning lights and gauges as
well as all the accessories to make sure they work. Make certain that the air
conditioning blows very cold air.
Check the glove box for
the owner's manual. It contains maintenance information and important data on
engine tuning, fluid capacities and replacement parts.
A used car does not
depreciate as rapidly as it did when it was first driven from a dealership
brand new. However, it is possible to get someone else's "lemon". Be
aware of hidden and extra costs, such as rustproofing
or extended warranties that you may not want.
Other common add-ons
include:
- charges for processing the paperwork involved in a
sale known as conveyance fees and
- credit insurance which will pay off
your loan should you die or become disabled. Before purchasing, check your
coverage under existing policies you already have. You cannot be forced to
purchase credit insurance as a prerequisite to securing a loan. Some
dealers may try to include an advertising surcharge after the offer has
been accepted. This charge represents the dealer's participation in
national or regional advertising and is already built into the base price
of the vehicle.
Extended warranties are
generally offered by manufacturers to cover major drivetrain
parts (engine, transaxle, transmission, etc.) at an extra cost. Some of these
warranties may include a deductible that is paid by the owner. Service
contracts and "wrap-around" warranties are offered by manufacturers
and warranty companies. They generally cover repairs for a longer period than
the manufacturer's drivetrain warranties. They
operate like an insurance policy and are regulated as such in
Do not be afraid to take
up the salespersons' time. Be sure to stay in control and do not let anyone
talk you into buying a vehicle you do not want. Likewise, do not be afraid to
walk away, especially if "the deal won't be there tomorrow". If it
sounds too good to be true, it generally is. Shop during daylight hours in
order to thoroughly inspect the vehicle and take a test drive. Be sure to drive
the car under a variety of conditions, such as hills, highways and in
stop-and-go traffic. This should be a fairly extensive drive, not just a drive
around the block.
A car's good points or
problems are often apparent after a few miles. If the engine was warm when you
arrived to look at the car, it may mean the seller has been running it to hide
starting difficulties.
Drive
Test
Start the engine and
press down on the brake. The brake pedal should go down only an inch or two and
should feel firm and solid, not spongy. Press down on the brakes for about a
minute. If the pedal sinks slowly, there may be a leak in the master cylinder.
As the engine warms up, listen for any noises such as knocks, ticking and
rattles, which could indicate engine problems. Next,
put the car in neutral and rev the engine. Look in the rear view mirror to see
if there is any smoke coming out of the exhaust. If there is a lot of white or
bluish smoke, the engine may need an overhaul.
At idle, the engine
should be smooth and quiet. Punch the gas pedal to see if the engine responds
without hesitation and then returns to normal idle. When first starting out,
drive slowly to get the feel of the car. The automatic transmission should
shift smoothly without jerking, slipping or hesitating. A manual transmission
should shift smoothly between gears without grinding. The clutch should engage
and disengage smoothly without grabbing or chattering and don't forget to make
sure the reverse works. Drive on a flat, smooth road and lift your hands
slightly from the wheel. The car should track straight and be stable without
vibration. If the car pulls in either direction or "shimmies", a
front end alignment or other front end repairs may be necessary.
To test the brakes,
accelerate to 30 to 40 miles per hour. Make sure there are no cars behind you,
then step hard on the brake pedal, but do not lock the wheels. The brakes
should grab evenly and the car should slow down in a straight line. If the car
pulls to the left or right, it indicates the need for brake adjustment or a system re-build. A grinding noise indicates badly worn
pads or linings. Drive at 35 miles per hour and listen for any unusual noises.
If you hear a whining sound from the rear-end, it may
need replacing.
Next, accelerate to 45
miles per hour. If the front end shakes or vibrates, the tires probably need
balancing. Drive quickly over a rough road and listen for any loud squeaks or
rattles. If the car bounces or bangs over small bumps, the shock absorbers may
be worn and need replacing. After you have driven the car for a while, check
the temperature gauge to see if it shows a high reading or if the temperature
warning light (be sure this works!) comes on. These are signs of trouble with
the cooling system and they can be very expensive.
To test engine response,
accelerate hard on an empty road. The car should respond immediately. Back off
and hit the gas again. There should be no hesitation or smoke from the car. The
engine should accelerate smoothly with no strange noises. You may want to find
a steep hill to check the engine's power. If there is a significant loss in
power while climbing, the car may need an overhaul or a tune-up. While you're
on the hill, test out the hand brake to make sure that it holds the car. When
you are through with the test drive, it's a good idea to turn off the car for a
minute or two. Then restart the engine to see how well it starts when hot.
Check again for leaks under the hood and beneath the car. Some leaks may only
appear after driving. It's also a good idea to check the tailpipe. An engine
that is burning oil will leave a black, sooty oil deposit. A white, powdery
residue usually means good fuel combustion.
Odometer
Fraud
Is the physical condition
of the car consistent with the mileage on the odometer? The odometer reading is
an accepted means of determining the dollar value of a motor vehicle. If the
vehicle is in exceptionally good condition, perhaps items were replaced due to
excessive wear. Also look for scratches on the odometer/dashboard, misaligned
digits, digits that stick or an odometer that fits
loosely. Any of these may indicate odometer tampering.
If you suspect that the
odometer has been rolled back on a vehicle offered for sale, contact your local
law enforcement agency or the DMV. If you suspect odometer fraud has occurred
with a vehicle you have already purchased, the DMV can assist you in obtaining
a record of all previous
- Disconnect an odometer.
- Turn back an odometer.
- Drive with a disconnected or non-functional odometer.
It is a violation for anyone
(dealer or individual) to sell a vehicle without providing a written statement
of the actual mileage at the time of transfer. Exemptions from odometer
disclosure include vehicles which:
- Are 10 years old or older.
- Have a GVWR (Gross Vehicle Weight Rating) of more
than 16,000 pounds.
- Are not self-propelled.
Other
Items to Check
Ask if the
vehicle has ever been in an accident. Find out as much as possible about the
car's prior history and maintenance record. If you are purchasing the car from
a dealer, contact the previous owner to verify the mileage and condition of the
car. If the dealer will not provide this information, write down the vehicle
identification number, which is usually visible through the windshield on the
driver's side. With the vehicle identification number, you can contact your
local tax collector's office or the DMV to obtain the previous owners' name.
For a small
fee the National Automobile Dealer's Association, (800) 274-2277, will run a
title search on a vehicle. The search will tell you in which cities and states
the vehicle has been registered. It will also tell you if a particular vehicle
has been salvaged, flood damaged, recalled or had the odometer rolled back.
Mechanical
Check
After you've
checked out the car thoroughly and are seriously considering buying it, you should
take it to a trusted mechanic or auto diagnostic service (again, check the
Better Business Bureau) before you make a final decision.
The money
spent on checking the car out may save you a lot more money and hassle in the
long run. After a close look by a professional, an attractive automobile may
not turn out to be as mechanically good as it appears.
The best
place to have the car inspected is at a dealership that sells and services the
same make of car. The mechanics there will be familiar with the car and know
what problems to look for. They also have the sophisticated computer equipment
needed to analyze today's cars.
If the car
does have some problems, ask the mechanic the approximate cost of repairing any
defects. Minor problems which can easily be repaired can be used to negotiate a
lower price but a car with major problems should be avoided. Think long and
hard before buying a flood damaged or rebuilt car, or one with serious problems
that you may not have the additional money to repair.
The mechanical
check is not an "iron-clad" guarantee, just one more way of
protecting you and your loved ones. This may be the most important step in
the used-car buying process. Don't skip it! This is also very important
when buying from a private party. If the dealer or owner refuses to let you
take the car to a mechanic, Do Not Buy The
Vehicle! You may have to pay $50 or so for this service, but it provides
the best protection available, although it does not guarantee the car against
major defects.
Emissions
As of June 29, 2000,
Certification
of Pollution Control Form
All dealers are required
to have this form filled out completely and signed by both the customer and the
dealer at the time of sale. Dealers within
As-Is Or Warranty
All dealers are required
by Federal law to post a "buyers guide" in the window of each vehicle
offered for sale. The buyers guide notifies the buyer that there is a warranty
or that the vehicle is being sold "AS-IS" with no warranty of any
kind.
In the case
of an "AS-IS" sale, once you drive the vehicle from the dealership,
it belongs to you, despite any problems the vehicle may have. If the vehicle
breaks down after only a few minutes of leaving the dealership, the repairs are
YOUR responsibility.
Sometimes
the most important difference between vehicles is not under the hood or in the
extra equipment offered but rather is tucked away in the product packaging -
the Warranty Card. While you think nothing will ever happen to your newly
purchased vehicle, problems will surface. The better the warranty, the less you
will pay for those unexpected repair bills.
When
comparing warranty policies, longer is better. However, be cautious of policies
that are too long or have unrealistic requirements -- the company may not be
around later when the vehicle needs service. Be sure to ask:
- Are all the parts covered?
- Is there a co-payment
- Am I required to have repairs done only at selected
garages?
- Does normal service need to be accounted for?
Can service
be performed at a repair shop of your choosing or only by certified repair
shops designated in the policy? (Important if you live some distance from where
you would be expected to have repairs and service done.)
- If misused, is the warranty completely void on all
covered items?
Keep your
warranty safe, it should be kept with receipts. Make a copy and keep it in a
separate location. Some companies are lax while others require you to have the
original warranty with you when repairs are performed. Be sure to be specific
in following the manufacturer's warranty requirements.
The
Magnuson-Moss Warranty Act of 1975 requires that warranties be available for
reading before purchase. Unfortunately some companies do not comply with this
requirement. No reputable dealer runs afoul of this law, but their
administrative procedures for providing this information are sometimes
incomplete. Under this federal law, you can sue based on breach of express
warranties, implied warranties or a service contract.
The bottom
line is: read warranties carefully, especially the fine print. Be sure to
obtain copies of the documents you sign. Be sure that any other papers you sign
match what you agreed to. There have been occasions where a "buyers
guide" reflected a warranty, but the contract stated "AS-IS". In
this case, government agencies would view this as an "AS-IS" sale.
Remember,
there is no warranty or agreement unless it is in writing and signed by all
parties. Get any promises made in writing.
There is
no Lemon Law for used cars in
Be
Careful and Be Aware
Under no circumstances
should you sign any blank forms. Obtain copies of all signed paperwork involved
in the sale at the time of preparation. Do not lose control of your trade
vehicle's title.
In many
cases, once a deposit is made, if the customer changes his/her mind and decides
not to purchase the vehicle, the decision can result in a lost deposit. Make
sure that your receipt and or contract specifies a refundable deposit. Be sure
that you understand all the terms of the contract.
Many
contracts are written pending credit application. Deposits are made with credit
application fees. Trade-in value is given and the vehicle purchased is then
driven home. The application is then processed and denied. The application may
then be processed with another agency through the dealership, but at a higher
interest rate. Again, ensure that you get everything (agreed interest rate and
terms, and terms if denied credit). Be sure the dealership has a license to
finance by checking with the Division of Banking and Finance if you have any
questions.
After
purchasing the car, have the seller write a receipt marked "Paid in
Full." The receipt should include the make, model and vehicle
identification number of the car, the seller's name, the buyer's name and the
amount paid.
Tax, Tag
and Title
Dealers can only charge
the actual amount of fees paid for tax, tag and title transfer. Generally, the
tax, tag and title fees are not included in the contract. However, some dealers
will charge a processing or handling fee. If they do, it must be separately
disclosed. Again, make sure you understand all the terms of the contract.
A licensed
dealer is required to transfer the tag and title within thirty days. If a
dealer issues a second temporary tag, the consumer should start asking
questions. If the dealer issues a third temporary tag, the consumer should
contact the Division of Motor Vehicles immediately, as this is a violation of
Florida Statutes which falls under DMV jurisdiction.
Be sure you
have proof of insurance.
Declining
Value
Almost every car loses
value as it ages. Large luxury cars and subcompacts tend to depreciate at the
fastest rate. Domestic cars tend to depreciate faster than comparable imports.
Used cars
with the highest resale value are typically best selling new models with
desirable options like air conditioning, power steering and cruise control. If
you end up paying a little more than you had expected for that perfect used
car, it is not the end of the world. In the long run, you are much better off
with a car that you are happy with than one that you saved a few dollars on.
Exterior
Checklist:
- Examine in daytime
- Examine in clear weather
- Check for nicks and scratches
- Check for thin, worn paint
- Check for big defects (costly) and not minor repairs
- General look around the outside of the car.
- Examine both sides of the car from a distance (both
front and back).
- Look for ripples, waves, poorly fitted panels and
mismatched colors.
- Look for dents or rust around the bottom of the doors
and fenders.
- Check for bubbles along molding or chrome (indicates
rust underneath).
- Look under the vehicle for rust
- Check for welding spots on the frame (serious
accident or repairs).
- Open and close the doors, hood, trunk or hatchback.
- Stand back approximately 10 to 15 feet from the car
and see if the car is level.
- Check the shocks by pushing down on each corner of
the car and letting go.
- Check the tires (sidewall cracks, uneven tire wear,
brake fluid leakage)
- Look under the car for:
- oil spots, or
- transmission fluid or
- power steering fluid or
- shock absorber fluid.
- Open the hood and check belts and hoses for cracks or
wear.
- Radiator coolant should be a clean, greenish (or blue
or yellow) color.
- Pull out the oil dipstick. Oil should not be gummy or
grayish or smell burnt.
- Check automatic transmission fluid,
should be clear and reddish.
- Check the fluid level in the master cylinder as well.
- Look inside the trunk for an inflated spare tire, a
jack and a lug wrench.
- Check the mileage
- Compare mileage on service stickers (door jamb/under
hood) to the odometer reading.
- Check the condition of the seats, belts and
carpeting.
- Check the windows to see if they open and close
easily.
- Check the brake, accelerator and clutch -- should
work smoothly, no strange noises.
- Check all exterior lights and flashers on the car
- Start the engine and check the warning lights and
gauges
- Make certain that the air conditioning blows very
cold air.
- Check the glove box for the owner's manual.
- Do not be afraid to take up the salespersons' time.
- Stay in control
- Do not let anyone talk you into buying a vehicle you
do not want.
Test
Drive Checklist
- Drive the car on hills, highways and in stop-and-go
traffic.
- Start the engine and press down on the brake.
- Listen for noises which could indicate engine
problems.
- Put the car in neutral. Check for smoke from rear
exhaust.
- Punch the pedal. Does engine respond without
hesitation then return to normal?
- Check the lights on the control panels.
- Does automatic transmission shift smoothly?
- Manual transmission should shift smoothly between
gears without grinding.
- Clutch should engage and disengage smoothly without
grabbing
- Drive in reverse
- Does car pull or vibrate when driving on a flat,
smooth road?
- Do the brakes grab evenly and does the car slow down
in a straight line?
- Drive at 35 miles per hour and listen for any unusual
noises.
- Accelerate to 45 miles per hour, does the front end
shake or vibrate?
- Drive quickly over a rough road and listen for any
loud squeaks or rattles.
- Does the car bounce or bang over small bumps?
- Check the temperature gauge to see if it shows a high
reading
- Accelerate hard on an empty road, does the car
respond immediately?
- Accelerate on a hill, does the car respond
immediately?
- Cut off the engine. Then restart the engine
- Check for leaks under the hood and beneath the car.
- Check the tailpipe. Are there any black, sooty oil
deposits?
- Does the odometer mileage seem to match the physical
condition of the car?
- Check odometer for scratches, misaligned digits,
digits that stick.