10 things to know to avoid a purchase disaster
How do you find the right used car? Due diligence is key.
When you're in the market for a used car, the Latin phrase caveat emptor ("let the buyer beware") should be the guiding principle behind any purchase. Distinguishing a cream puff from a hard-ridden beater becomes an epic responsibility when so much of your hard-earned money is at stake. So how do you find the right used car? Due diligence is key. Having a plan about what to look for before scouring the Web and the streets in search of that diamond in the rough will help you find a vehicle that will serve as a reliable partner for miles to come.
The more detailed the repair records, the better your understanding of the car's history and its condition. Repair receipts from current and previous owners are great indicators of a vehicle's condition. Allen Otto of Hansville Repair in Hansville, Wash., says to keep an eye out for recently completed big-buck maintenance on high-mileage vehicles; look for items such as timing chain and belt service, water pump replacement and transmission repairs.
On newer vehicles, it's wise get a history report from services such as Carfax, AutoCheck and Instavin.com. However, Otto says buyers should understand that these reports refer only to insurance claims for incidents such as accidents, vandalism and flood damage, and have little to do with the mechanical operation of your candidate.
Signs of neglect
Always check a vehicle up and down, inside and out for any signs of damage or previous repair. Something as simple as the cleanliness of the interior can be a crystal ball into the quality of upkeep the vehicle has seen. Keeping a tidy cabin requires no technical ability and it illustrates the current owner's commitment to the vehicle.
MacGyver on duty
Escaping MacGyver-like from a jail cell with a paper clip, rubber band and ballpoint pen is one thing, but finding strange objects at work under the hood of a car is a red flag. Do you see some poorly executed do-it-yourself repairs? These can be another sign of neglect. Do all the tires match? A previous owner who cut corners on maintenance could be setting you up for a big fall.
A fluid situation
Checking oil and transmission fluid can provide key clues to an engine's internal health. Otto says the oil should not be gritty, watery or milky. Color is irrelevant. An oil-change sticker on the windshield can also provide insight. Transmission fluid is all about smell. An odor of dead fish means at some point the fluid got too hot, which leads to viscosity breakdown and potential damage. Be wary with your nose and also observe how the transmission shifts on your test drive.
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Any used car could potentially be a good or bad decision. The best advise is to take any vehicle you are thinking of purchasing to a reputable shop to have a pre-purchase inspection done. This will cost you anywhere from $85 to $120. They will do a complete and thorough inspection of the vehicle and then give you a written report of what they found wrong or right with the vehicle. Narrow your choices down first to your top choice and then have the inspection preformed on that vehicle. Just remember you are purchasing a used vehicle and do your research BEFORE you purchase the vehicle, after the purchase is to late.
timing chain bracket breaks and there goes your whole god damn engine!
Beware or the dealer offering to process financing paperwork instead of contacting your bank/credit union personally. This is a new step to reduce the workforce in the bank loan department but keeps you from hearing how much the bank will finance based on the book value and the dealer in my case called me 3 weeks after taking possession of the car to inform me that I still owed $600 more (in addition to the $2000 down payment) because they JUST found out the credit union shorted them that amount!
Had I went to the CU after getting the cars price, they would have told me in person how much the car was valued at, causing some complications for the dealer.
No, I didn't pay the $600, I screamed at the salesman in the phone until he thought I was having a heart attack and his manager came on the phone and said they would take care of the shortage with the CU!
In my opinion to buy a used car is very tricky. Most cars today will last 100-120k with your basic maintenance. But a great car will last 200k plus until you have to redo engines and trannies.
Before you start looking for a car you need to do things backwards. This will save time and create less headache when you find the one you want.
1. Financial. What can you afford. If credit is an issue, you need to run a credit report and dispute or clean up as much as possible. If you have lower scores or credit issues, it will be best if you try to find outside financing. Try a credit union or your bank, you may also be able to borrow from your 401k. You can find auto loans online for people with credit issues but buyer beware. Talk to friends and family to see if they know a dealer that has easier qualifications for buying a car. If you have good credit, still run credit report to be sure. Also check with you bank to see if you can get a better rate than the dealership. Make sure you having financing options.
2. Budget. Based upon what you think you can afford, a budget can make sure you are not money poor and car rich. I think the Toyota Corolla commercial was correct asking if you are ready to compromise your lifestyle to buy a car. Remember a car note today, for the average Joe, is 3-5 years. That is a long time to sacrifice. It will be every month until it is paid, but that is just the start. You will still have every other bill on top of that car note. Just because you think you can afford that 500.00 a month convertible or sports car, think ahead about what will happen if life gets in the way. Do not forget to add things like, the cost of insurance, tag cost, and the cost of gas and maintenance. When I sold cars, the top reason to trade in a 2 door sports car was, we are having a baby, or I need something cheaper to drive.
3. Wants vs. needs. If you have a family of 5, you may need a larger car, but want something small. This is more common sense and you will need to decide what is best for you. For example, you are looking for a commuter car for work, but you have a large family. I would suggest you look at 4 to 5 door small cars. Many have great room for 4 and get great mileage on the highway. Same as if you have kids but do not want a minivan. Most have switched to car frame SUVs'. Some have a third row of seats that fold flat when not in use. Make sure you check out your options, because cars have changed and may crossover to meet your needs.
4. Shopping. After you know what you want and can afford, do your research online, and are ready to buy. My advise is to shop around online using sites like KBB.com or dealerships online to get a price guideline and to see what is available. Make sure the used car you are trying to buy is not more expensive or similar price to buying new. Example, if they are running sweet rebates on new cars, it may be better or cost effective to buy new vs. used. But when buying used, you have to be flexible on options and colors or be prepared to wait for what you are looking for.
5. Buying. Some dealers are good, bad, and ugly. Ask friends and family for references to help. Cover your bases with research on trade values, but be realistic. The dealer is a business and is out to make money. Last, be smart, do your research, and do not be afraid to walk away from a deal. Please ask questions and read everything before signing it. Happy car hunting.