Buying a Car

Buying a Used Car

There are many benefits to buying a used car, however, there are also some things you should consider before making any vehicle purchase.

When buying a used car, you may not be able to choose the exact features like you can when buying a new car, but you do get the benefit of it already being a used car, meaning that the value doesn’t change as drastically as when you drive a new car off the lot. It is also likely to cost less to register and insure because it is older and has already depreciated in value. 

However, when buying used you don’t know how the prior owner treated the car. Usually, a dealership will check it out and make sure everything is running correctly, but how an owner drives and how well they care for a car can affect how long a car lasts. 


Benefits of buying used

Step 1: Research

Set a realistic price range:

– Include insurance, fuel, and repairs, plus features you need
– You don’t want to be stuck with monthly payments you can’t afford
– Only look for makes and models that fit into your price range

Figure out what kind of car you need:

– Compact: Up to 4 people, good for hauling books and takeout, ideal for lots of highway driving or commuting
– Sedan: Up to 4 people, good for hauling groceries and a few boxes, ideal for a mix of around town and highway driving
– Van: More than 4 people, good for hauling lots of people and stuff on a regular basis, ideal for around town with the occasional long distance trip
– Truck: 2–4 people, good for hauling work tools, equipment or pulling a trailer, if you tow equipment a lot consider a diesel engine

Get pre-approved for financing:

– If you don’t have the cash to buy your used vehicle outright, you’ll need to get an auto loan
– Being pre-approved for an auto loan from your credit union is a good idea
– You’ll know how much you can spend, which will give you some negotiating power with a dealer or used car lot, as they’ll know you are serious

Find your vehicle:

– Visit the manufacturers’ websites to find a model you like
– Visit websites that research and investigate vehicles for consumers to find out all you can about the vehicle you like—try, and
– Visit your local dealer, used car lot or classified ads and start tracking that vehicle down

Advantages of a private seller:

– Great deals: When you buy directly from a person, you can often find a really good deal
– Less intimidating negotiations: Negotiating can be less intimidating because you’re working with a regular person, not a highly trained sales professional
– No unnecessary costs: Dealerships often try to charge for unneeded extras

Advantages of a dealer or used car lot:

– Warranty: Most dealers offer a warranty, which will give you the peace of mind that the car that you’re buying is in good working condition
– Extras: Dealers will often throw in extra services for free that a private seller can’t, like a free oil change
– Trade-ins: Dealers take trade-ins, which can lower the amount you have to pay for the car you are buying

Disadvantages of a private seller:

– No consumer protection: If you discover after the sale that the car has a problem (known or unknown by the seller), it immediately becomes your problem
– Annoying negotiations: Owners tend to be more attached to their cars than dealerships and can be difficult to work with

Disadvantages of a dealer or used car lot:

– Higher prices: List prices at dealerships tend to be more expensive than when buying directly from a private owner
– High-pressure negotiation: Negotiation with used car salespeople can be high pressure, as selling is what these folks do for a living

Step 2: Evaluate

Before you start the car, give it an initial inspection:

– Inspect the exterior: Look for offset doors and fenders, cracks and differences in paint color, as this may indicate body damage—if you spot new paint, tap along the repainted areas; a change in the sound can reveal repairs and body work
– Look for rust: Check underneath the car for rust—a used car with a rusted frame isn’t structurally sound
– Check the interior: Inspect the interior for wear and tear and water damage and check the odometer—if it shows low mileage but the inside of the car is disheveled, the car may not be what it appears to be
– Check the tires and wheels: Look for even tire wear—uneven wear could mean that the wheels or suspension are out of alignment
– Look at the engine: If you see rounded or stripped nuts and bolt heads, it may indicate shoddy repair work; check for new spark plugs—it is a good sign that the car has undergone regular maintenance; make sure the coolant is clear and the oil, transmission fluid and brake fluid are all the correct colors

Now, take the car for a test drive:

– Be sure to drive it cold: A cold engine will tell you a lot more than a warm engine will
– Plan your route: Your test drive route should cover different types of roads—try to drive on highways, city streets and rural roads
– Vary the terrain: Find a bumpy road to see how the car responds—if you feel like you’re being thrown around, the shocks are likely worn out
– Check the controls: Test the wipers, lights, turn indicators, stereo, and the heat and air-conditioning controllers
– Check the alignment: While driving, momentarily take your hands off the steering wheel to see if the car pulls to the left or right
– Check the gearbox: Gears should shift smoothly—if you hear any grinding noises, there is likely something wrong with the transmission
– Check the brakes: Find an empty road, accelerate and hit the brakes hard—if the car pulls to one side, there may be a loose caliper

Vehicle history report:

– Get a comprehensive report of the vehicle’s history—these reports often cost money, but they are worth it
– For no charge, will show you how many records are available for a specific Vehicle Identification Number (VIN); however, if you want to view the records, there is a charge

Step 3: Negotiate

You’ve found a car you’re happy with and now you want to buy it. Remember, dealers don’t just make their money on the selling price.

– Front end: Dealers make money on the front end by selling the car for more than what they paid for it
– Back end: Dealers make money on the back end by selling financing, extended warranties and add-ons like rustproofing
– Trade-in: If you have a trade-in, dealers make money on the difference between what they pay you for your car and what they get when they sell it

It’s time to negotiate. Dealers build about 20% gross margin into the asking price of the used car.

– Research the price: Find out what the going price is in your area for the type of car you want—check out classified ads in the paper or online to get an idea of prices
– Make an offer: Offer 15% below the asking price—tell the salesperson that you know there’s about 20% gross margin in the price and that you want him or her to make a profit
– Turn down add-ons: If you’re buying a used car from a dealer and they try to sell you add-ons, just say no—you can likely find a cheaper source elsewhere

Be prepared to walk away. In any negotiation, be ready to walk away—be flexible in your choice and don’t get too attached to one car.


View the infographic below or click here for a quick cheat-sheet on tips for buying a used car:

28 B Infographic Sacovalley


When Buying a Used Car Privately, Beware of “Curbstoning”

Auto dealers are expected to sell cars that meet certain consumer protection criteria. This may include providing a warranty that will cover the buyer’s costs if a car turns out to be a lemon. Unfortunately, some unethical dealers may attempt to bypass these laws by curbstoning. Curbstoning is when a dealer poses as a private seller to sell a car. By curbstoning, an unethical dealer can avoid having to comply with the regulations that apply to dealers. To a buyer, this could mean buying a car that has a salvaged title (a car that’s been declared a total loss by an insurance company). It could also mean unknowingly buying a car that has been in a flood and suffered severe water damage.

The term curbstoning comes from the way these transactions typically occur. When a dealer is trying to pose as a private seller, they will often sell cars from the curb or a parking lot, just as an individual would. A curbstoner often gets away with scamming buyers because he or she sells the vehicle and then disappears. With no office or contact information, a buyer can end up with a lot of headaches to deal with.

Experts say up to 80% of used cars sold through online classified ads are orchestrated by curbstoners. Follow these tips to protect yourself:

1. Type in the seller’s phone number
If you find the listing on craigslist or in an Internet classified ad, do an online search for the phone number to see if it is linked to other car ads. If the seller is selling multiple cars, that’s a red flag. You will know that this is not the seller’s private car, which might indicate that they are a curbstoner.

2. Just ask about “the car”
Don’t say too much—be purposefully vague and just ask “about the car” without giving any details. If the seller responds with “Which car?”, you’ll know that he or she has multiple cars for sale.

3. Get an inspection and a written repair estimate
Have the car inspected by a mechanic before you buy it. If you don’t have a mechanic, Google and Yelp are good places to read reviews of local shops. It’s a smart investment—a pre-purchase inspection costs about $100 and can alert you to problems you may not find yourself.

4. Get a vehicle history report
AutoCheck and CARFAX are the two best-known sources for vehicle history reports. These reports can reveal vital information about the car, including whether the odometer has been rolled back or if it has a salvage title. Use the car’s vehicle identification number (VIN) to get this information. Most cars listed for sale on reputable sites provide a free history report that you can pull and view yourself.

5. Check the warranty
See if any manufacturer’s warranty is left on the car that could be transferred to you. A used car that is only a couple of years old, or that has low mileage, may still be covered.

6. Ask to see the driver’s license and title
You should always ask to see the seller’s driver’s license to see if it matches the name and address on the car’s title. If the person’s name on the title is different from the name of the person selling it to you, that’s another red flag.

7. Be wary of fictitious friends and family
Unlicensed dealers often use family and friends as part of their sales pitch. They may pretend that it’s their friend’s car, their mother’s car or “my Uncle Dave’s car.” If the seller tells you that he is selling it for his aunt, uncle or cousin, it’s likely not true.

8. File a complaint
If something does go wrong, file a complaint with your local office of consumer affairs, the Motor Vehicle Administration or state department of motor vehicles, and the state Attorney General’s Office.

Buying a car privately can be a good way to find the car you are looking for and save money. By following these tips, you’ll avoid falling prey to curbstoning. Whether you are buying a car privately or from a dealer, credit unions are often an overlooked source of legitimate and affordable auto financing. Many people make a mistake in thinking that they can’t get a loan to buy a better car, so they end up settling for a junker.