Get the Most for Your Money when Buying a Used Car
2013 is turning out to be a banner year for the sale of new cars and light trucks in the US. Likewise, the supply of used cars and light trucks in the US is experiencing unprecedented growth as people either trade in or sell outright, their used vehicles. The intent of this article is to help you to take advantage of this trend.
Contents
Steps
Deciding Where to Buy the Vehicle
- Consider dealership alternatives. Dealerships are convenient, but more expensive. Buying a used car from a used car dealership is much more expensive because about 30% of the purchase price must go into the overhead of maintaining the dealership, paying employees, finance charges and sales commissions. In addition, used car dealerships buy most of their vehicles at auctions, so, much like buying a house at a foreclosure auction, the dealerships never get to test drive the vehicle they are buying. Most of the cars at auctions are the trade in vehicles that the dealerships didn't want to sell themselves. What if we could eliminate these expenses and most of the uncertainties?
- Go for 'sale by owner.' Buying a used car using the 'for sale by owner ' approach is an effective way of eliminating the used car dealership overhead. However, in order to participate in this market one must have the purchase and registration fees upfront. This means either borrowing the money or saving the necessary cash.
Determining If the Car is Reliable or Not
- Examine the service records. Screening a well maintained and reliable used car from the mechanically challenged is a way to eliminate the uncertainties. When you make a call to ask about a car, ask to see 3-5 years of sequential service records. If the person has no records, this is a 'tell' about the car and its maintenance. Move on to another vehicle.
- Interview the person as well as test drive and inspect the car. Is the person punctual, are they well groomed, is their living situation neat and orderly? How the person lives and behaves speaks volumes about how they take car of their possessions, including their car.
- Ask to see the car in the morning and ensure that you're able to start it cold for the day. 'Stone cold' starting a vehicle can speak volumes about the condition of the engine. If it smokes, other than normal steam condensation out the tail pipe, do NOT buy the car. If it smells odd( sickly sweet, rotten egg smell, burnt oil etc )do NOT buy the car. Used car dealerships almost never let you 'stone cold' start car.
- Take a good used car candidate to a trusted mechanical repair shop who is very familiar with the vehicle and have them do a comprehensive pre-purchase inspection. Do not use generic car used car inspection services, like AAA, because they only perform a skin deep inspection and have no specialized product knowledge. For example, if you're buying a Mercedes Benz, take the car to a shop that specializes in Mercedes. They will know the vehicle fine points and known patter failures and how to properly check for them.
- Run a CarFax.com on the vehicle. You can do this after it passes the mechanical pre-purchase inspection so you can see if the vehicle has any hidden accident history.
- Take the car for a smog inspection yourself BEFORE you buy the car, even if it already has a smog certification. Unfortunately, there are still many ways to get a non-compliant vehicle smog certified. Witness the legal inspection of the car and ask the emissions inspector to go over the VIR (Vehicle Inspection Report ) with you and ask him or her what they think of the car and do they see any thing to worry about?
Deciding What Kind of Car to Buy
- Determine the price of the car based on the market and the quality of the car. Check KBB.com for an approximate price of the car. Used cars that have a history of reliability, like a Camry, Corolla, Civic or Accord, hold more than their Kelly Blue Book value. My 1998 Camry is still selling for what I paid for it almost 10 years ago.
- Take a pass on an all-wheel drive or 4 wheel drive vehicle. Used 4wd/all wheel drive vehicles are usually much more costly to maintain. Unless you live in a snowbound area or go to a snow area more than 5 times a year, all-wheel drive is a big waste of fuel and involves twice as many moving drive line parts that wear out and need replacing. All wheel drive vehicles tend to wear out their tires much faster and provide at best, a negligible safety advantage when the roads aren't icy or covered with snow.
- Buy the car if it passes all the above criteria. This whole process may take some work, but you're getting at least 30% more value and you're proactively creating peace of mind which is priceless.
- Think twice before getting the extended warranty. They tend to have questionable benefits. It is rare to see an extended warranty company pay out more in a claim than the price of the premium. Choose a used car wisely and save your self a lot of money.
References
- www.carfax.com
