One of the things that keeps most average Americans from ever truly getting ahead is car debt. Buying or, even worse, leasing a new car every 3-5 years is a sure-fire way to make sure you usually find yourself with too much month at the end of your money. One way to escape this trap is by purchasing a quality used vehicle. The typical new car loses about 20% of its value the moment you drive it off the lot and approximately 65% of its value over the first five years. Obviously, those are broad averages. Some cars hold value better than others. But in most cases, driving a new car is a little like winding down your window and throwing a $100 bill out on your way to work once a week.
OK. So you say maybe a quality used car really is more economical but how do I make sure I get quality and not a lemon that is going to cost me even more in the long run? What if you aren’t very mechanically inclined? What if recognizing the car has a steering wheel and 4 tires is about where your expertise ends? To be honest, this used to be one of my rationalizations for buying new cars. I was afraid I’d get a lemon and that it would be a money pit and leave me stranded. Well the truth is you really can find good quality used cars, even if you can’t tell a carburetor from a differential.
Here are 8 tips for avoiding a lemon.
1. Research, research, research.
There is no substitute for doing your homework. What features are important to you? Fuel economy? Safety? Do you need the capacity of a mini-van, hauling ability of a pickup, something cool and sporty looking? Reliability? 4 wheel drive? Make a list of what features are critical to you. Now start your research. Get the Consumer Reports auto buying guide. J.D. Power provides reliability studies including studies of automobiles. Kelley Blue Book, Edmunds, and NADA are all good sites where you can find a wealth of information on used vehicles as well as many articles to help you search wisely for your next vehicle. Lastly, when you think you have an idea what you might want, google it. Look for reviews, owner experiences, etc. By spending a few hours doing some research, you should be able to narrow your search to a few models that match your desires. You now have a starting point for your search.
2. Consider private sellers
Not being an expert on automobiles, I used to be a little afraid of buying from a private seller. Somehow buying from a dealer seemed safer. But here’s an important thing to consider when it comes to buying from a dealer. They have a fixed cost associated with the car. If they paid $5,000 for the vehicle, no matter how expertly you negotiate it’s unlikely you’ll get them to sell it to you for $4,000. If they consistently sell things for less than they paid for them, they aren’t likely to be in business long. Take that same $5,000 car at a private seller though? They might take $4,000, especially if you are offering cash. Because chances are they have already paid for the vehicle. So they don’t have that same fixed cost that a dealer has. Granted it’s possible they still have a loan on the vehicle and that might present the same barrier that the dealer cost presents, but you won’t know that until you begin to negotiate and you can be 100% sure that the dealer has a floor on what he’ll take.
When you are pretty sure you have found a vehicle you might purchase, get the VIN (Vehicle Identification Number) and purchase a report on that VIN from Carfax.com. You can purchase one report for $34.99 or unlimited reports for $49.99. If you have more than one vehicle you are looking at paying the extra $15 is probably well worth it. Carfax will give you information about how many owners the vehicle has had. It will give you an indication if the vehicle has ever been in an accident. You will get an idea of what kind of maintenance has been done to the vehicle. While not perfect, it will give you a decent idea of the history of the vehicle, and will also help you know if the seller is being honest with you.
4. Know what the vehicle is worth
Take advantage of sites like Kelley Blue Book, Edmunds, and NADA to lookup what is the real market value of the vehicle. When negotiating the person with the most information will almost always come out ahead. Not that you are trying to take advantage of the seller, but neither do you want to be taken advantage of by not knowing what the vehicle is worth ahead of time.
5. Ask a friend for help
If you aren’t an expert when it comes to automobiles, do you have a friend that is a mechanic or a car buff? Take them with you and get their opinion. Offer to buy them lunch. It might be money well spent.
6. Inspect the car
Now it’s time to go look at the car. Check out the following things.
- Look for mismatched paint or body parts that don’t seem to align quite right. These are good indicators the vehicle has been in an accident.
- Check the tires to see if they seem evenly worn. Uneven wear is a sign the car is badly aligned.
- Check the gas and brake pedals for excessive wear. Check to see if the steering wheel seems worn or the driver’s seat seems to sag. If the car has low mileage but you see these signs that may indicate the odometer has been tampered with.
- Check the engine compartment for obvious signs of fluid or leaks.
- Feel under the dash or under the seats. If you find mud or dirt this can be a tell-tale sign the vehicle has been through a flood and you shouldn’t buy it.
- Check the radio presets. If they aren’t set to local stations, this is a possible sign the car wasn’t locally owned.
- Any unexplained spots of rust?
7. Test drive
- Make sure the vehicle is comfortable. Does the seat fit you well? Controls you most often use are conveniently located? Can you see well? If you are tall is it easy to get in and out of? It’s not a good deal if you end up hating the car because it doesn’t fit you well.
- Try to test drive the vehicle at a variety of speeds if possible. Sometimes you’ll notice things at highway speeds that aren’t noticable driving 25MPH around the block.
- Any unusual vibrations in the steering wheel? Any unexplainable noises?
- Are the brakes firm? Does it pull noticeably to one side or the other when you apply them?
- Make sure there are no warning lights on.
Use the negotiating tips I mentioned in an earlier post. You might be able to get a great deal.
There are no guarantees that these tips will enable you to get a quality used car at a great price. But really, there’s no guarantee that your new car won’t have issues as well. If you follow these steps though I think even the most mechanically challenged can find a good, quality, comfortable vehicle that won’t break your budget.
Photo credit: aldenjewell