Buying a Used Car
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Let me start off this article by asking the question, "Who am I to write this article and offer advice on buying a used car?" Very good question. Buying a car is a major decision and any advice given by anyone in buying a car should be scrutinized carefully. Granted, no one knows everything (and I sure don't know it all), but I do have some experience with cars that I can share with others. First of all, ever since I was a kid, I've wrenched on engines and mechanical equipment. As soon as I was old enough to drive a car, I was interested in tinkering and working on them. In large part because of my interest in cars, I received a Mechanical Engineering degree. My dream was to one day work in the automotive industry as an engineer helping to design and manufacture new cars. Because life took me in different directions, I never did move to Detroit to work at one of the Big Three automotive manufacturers, but I have spent much of my life being interested and involved in cars. For some people, buying an automobile is a chore that they just want to get over as quickly as possible. Not for me. I always enjoyed researching and studying to try to get as much information as possible before making my choice of what car to buy. Maybe it was the engineering persuasion in me that wanted to research, get as much data as possible, and make a good decision based on that information. Whatever the exact reason, part of it was that I just enjoyed doing it. All the vehicles I've purchased over the years have been used. At one point, shortly after graduating from college when I had a good income working as an engineer, I was planning to buy a brand new Nissan 300ZX Twin Turbo. That was the only time I considered buying a brand new automobile, but instead I ended up focusing more of my money on buying a house and then I just purchased another used car. To get back to that initial question of who am I to write on this topic. I'm a car enthusiast, someone familiar with how an automobile works, someone who spent years wrenching on them, and I've spent a lot of time trying to figure out the best way to make a good choice when buying a car. It is from that point of view that I'm sharing some of what I've learned with you...
If you are thinking about buying a used car, but you have some questions you want answered before you are ready to start your search, then that is a good sign that you are on the right track. Buying an automobile is a big decision that can have long lasting ramifications on your life, and so it is good to take it seriously and proceed with caution. The person that just goes down to the local used car lot and picks out the "cutest" or the "coolest" car that they see could be bringing a lot of unnecessary trouble upon themselves. When you buy a used car, it's not like shopping for new clothes or different furniture for your home. An automobile is a complex piece of machinery. There are lots of things that can go wrong, and there are a lot of areas of potential grief if you make a bad choice. Nobody enjoys being stuck on the side of the road with vehicle problems. No one enjoys buying a lemon that requires frequent and expensive repairs. These are the sort of problems that you can encounter if you buy a used car haphazardly and without some forethought.
WHEN TO BUY A USED CAR? This question is best answered in terms of dollars and cents. The best time to buy a used car is when you need (or want) to save money. A new car can be very nice, but many people can not afford buying brand new. The sticker shock on a new automobile can be quite significant. Once you drive off the lot, it is considered a used car and the value depreciates. This fact can be frustrating for the person buying a brand new car, because the value of their investment can drop significantly shortly after purchasing it. On the other hand, for the used car shopper this can be good news, because it means that you can buy a nearly new vehicle at a nice savings of money. For the person that buys a new car and plans to keep it for a long time, then this depreciation is factored out over many years and may not be a big concern to the car buyer. Another benefit of buying a new car is the comprehensive factory warranty. Even so, many people would rather save the money and purchase a used car.
HOW TO BUY A USED CAR? This question can best be summarized in one word. CAREFULLY! Some people like to go through life flying by the seat of their pants and make decisions almost entirely based on their feelings. This may work in some areas of life, but it can be a recipe for disaster when buying a used car! You might get lucky and end up with a good used car, or you might get very unlucky and end up with a nightmare that you wish you could forget! Below you will see 3 suggestions for how to find a good used car.
1) DO YOUR HOMEWORK! This is probably the single most important step in how to buy a used car. Most people don't like the idea of "homework", but this is an area in which it can really pay back in terms of money savings and hassle reduction down the road. One of the best ways you can do your homework is to find out the reliability ratings of the different vehicles in which you are interested. Better yet, don't set your heart on any vehicle until you know that it has a good track record. In other words, it would be prudent to not be interested in any vehicle which may end up causing you great grief and financial loss down the road. One of the ways to discover whether or not a vehicle is a good choice is to talk to people who actually own the vehicle and find out their experiences with the car. Naturally, it would be very difficult to find enough owners to talk with one on one. Thankfully, there are ways that you can indirectly "talk" with 1000's of other car owners, and that is through the ratings based on surveys filled out by people who actually own these different cars.
One of the best ways to find the highest rated automobiles is to get the April issue of Consumer Reports. This is their annual automobile issue in which they give reliability ratings on used cars for the past several years. You can sometimes go down to your local library and see the Consumer Reports April issue if they subscribe to this magazine. In addition, you can also go on eBay and buy past issues of this magazine. For those that prefer to do things electronically, it is also possible to subscribe online at the Consumer Reports website and access this information over the internet. This is probably the best way to get the CR used car buying information for people who have access to a computer and the internet. At the time that this article is being written, you can subscribe to Consumer Reports for 1 year online for $26.00, or you can subscribe monthly for $5.95/month. Either way, once you subscribe, you will have access to a wealth of used car reliability data online. Just be aware that if you subscribe monthly, that you will be automatically charged every month unless you specifically go into your account and cancel your subscription. If you know that you will buy a used car, then spending the $5.95 for the monthly subscription online is a GREAT investment! It is a low price compared to the wealth of information that you are getting. When you're ready to buy a used car, just subscribe and pay the $5.95 and you'll have a full month to do your used car shopping with this detailed information available to you. If after the month is up and you need more time, then just don't cancel yet and you'll be billed pay for another month. It's a BARGAIN! The information available is worth much, much more than the small fee they charge. You will literally have used car buying data at your fingertips based on survey information from over 1 MILLION car owners for just about every used car on the road for the past 10 years! It will be easy for you to see which are the highest rated automobiles. Below you will find a small sample of the type of information you will find.
In this example, you will see the used car reliability data on the Toyota Camry for model years 2002-2011. Basically, what you want to see is red. The red dot with the hole in the center is the best possible score. Red means good reliability (few problems). In the chart above, you can see that most any year of Toyota Camry has excellent reliability ratings overall; however, you should take note of the fact that in 2005-2007 (especially 2007) there were more issues with cooling system problems. What this means is that you should look for a model year other than 2005-2007. This is just one example, but from this data you will find that many model years of the Toyota Camry are among the highest rated automobiles. You can also use this information to find out what other makes and models of cars are highly rated. When you figure out how this system works, you will be able to quickly scan through information on hundreds of different years and models of used cars to find the highest rated automobiles. It can not be overemphasized how valuable this information can be when you are ready to buy a used car. If someone came up and asked how to buy a used car, and the only thing they were told was "Get the Consumer Reports data", then that person would be well on their way to making a good choice simply based on this great car reliability data. While you can make some general statements about cars such as: "a Toyota Camry is a good car" or "a Honda Civic is a good choice", the above example illustrates that it would be wise to investigate each model year to see if there were any problems which would warrant avoiding that particular year. The time to find out that there are some potential problems with a particular make and model is before you buy it. Once you buy a car, then you have to live with the consequences of that choice both financially and from practical day-to-day driving standpoint. You want to have a reliable vehicle that will serve you well for many years with a minimal amount of additional expenses for repair and maintenance.
2) CAREFULLY CHECK THE CAR IN PERSON. Once you have narrowed your search down to the models of used cars that have good reliability ratings, then you will start to process of trying to find a specific vehicle. Only consider buying a car that you can examine in person. Resist the temptation to buy a car sight unseen. If you just buy something over the internet, then you don't know what you are getting. Sure, you can find a lot more available used cars at places like eBay, but if you are not able to check out the car, then you might be getting yourself into trouble even if the car model itself has good reliability ratings. Also, you want to look for signs that the car might have been wrecked. In some states, a special salvage title is issued to cars that have been in major accidents and then rebuilt. Ask to see the title to see if the car you are considering has a salvage title. Also, a personal examination of the car can show signs of damage that might go unnoticed in pictures. Assuming the vehicle is structurally sound and has not been in any major accidents, the next thing you want to try to determine is the overall mechanical condition of the automobile. While it is important to choose a used car that has a good design and has good ratings, it is also important to make sure that the car was properly cared for by the previous owners. If the previous owner(s) neglected the car and didn't perform critical maintenance like changing the oil regularly, then you could be faced with expensive engine repairs down the road.
Just to give you a real life example of this, the author of this article knows of a situation where a young foreign exchange student purchased a brand new Honda automobile while attending school in the US. As you probably know by now, most Honda vehicle have excellent reliability ratings. After driving this Honda for years, one day the car just died while on a long road trip. When the car was towed to a mechanic to be fixed, it was discovered that the engine was ruined. It is extremely unusual for a relatively new Honda to experience a complete engine failure. When the mechanic pulled out the oil dipstick to examine the condition of the oil, he only found some black sludge at the end of the dipstick. There was no oil! As it turns out, the foreign exchange student had no idea about how a car operates. He thought that all you needed to do was add gasoline. He never cared (or knew) to check the engine oil or to have the oil changed. This particular car had around 60,000 MILES on the factory installed oil before the engine failed. As the dirty oil became more contaminated, the abrasive particles in the oil began to allow the piston rings (an other critical engine components) to wear prematurely. As the engine wore further, it began to consume more oil. Since the oil was never checked, then oil level began dropping which concentrated the dirt and contaminants in the remaining oil. This created a vicious cycle of further accelerated wear and increased oil consumption. Finally, this all ended dramatically when the oil level dropped to the point that the oil pump was sucking air. All that was left was a black sludge at the bottom of the nearly empty oil pan. The fact that this car survived 60,000 miles with this kind of abuse and neglect is a testimony to outstanding design of this Honda engine. However, the moral of this story is that while it is very important to select a car that is well designed, it is also important to make sure the car was properly maintained by the previous owners. Can you imagine buying a highly rated Honda like the one owned by this foreign exchange student? What if you bought it at the 50,000 mile point? That's a relatively low mileage used car that has a good rating. However, with the neglect that car endured, the engine might be in worse condition than an older Honda that had an engine with 245,000 miles on it! You get the point. Don't make the mistake of doing your homework carefully to select a well designed car, and then rush at the end and choose a used vehicle that has been neglected.
All this brings up the question, "How can you know if a used car has been properly maintained by the previous owner?" One simple way is to ask to see the maintenance records. Even car owners that are not mechanically inclined and never work on their own cars will often keep records and receipts of the work done to their vehicle. Try to verify that the oil was changed regularly. This is probably the single most important maintenance factor that can affect the longevity of any engine. Another way to try to determine how that particular used car was maintained is to pop the hood. Pull the dipsticks and check vital engine fluids. How do they look? On the engine oil dipstick, does the oil look like a nice semi-transparent tan color? This indicates that the engine oil is relatively clean, and that it was probably changed somewhat recently. If the engine oil looks dark brown or black, then that can be a sign of oil that was not changed regularly. In addition, any signs of water droplets on the oil dipstick is a major red flag. Water (engine coolant) mixing with the engine oil indicates a major engine problem. Stay FAR AWAY from such a car! Related to the transmission, a manual transmission is hard to check, because you'd need to crawl under the car and remove a drain plug or filler plug to try to access a sample of the transmission oil. This is not practical in most cases. Thankfully, manual transmissions are usually less problematic and as long as the transmission shifts normally and there are not unusual noises (which might indicate worn bearings or gears), then it is very likely fine. Automatic transmissions are much more complex and therefore much more prone to problems. With an automatic transmission, you can pull the dipstick under the hood. Is the fluid a nice pinkish red color? If so, then this can give you an indication that the transmission is in good condition. If the transmission fluid looks brown or very dark and has a burned smell to it, then stay away from the car! This can be an early indication of an automatic transmission that is badly worn and could fail soon. In case you didn't know, a transmission failure can easily cost you $1000's to fix. Expect to pay at least $3000-$4000 to have a typical transmission replaced these days on an ordinary vehicle. Also in terms of replacement costs, expect to pay at least as much to replace an engine. These are very conservative cost estimates. Costs can even go MUCH higher than this! You get the point. If in doubt, quickly run far away from any car that shows signs of potential engine or transmission problems. Some other areas that you can check under the hood include the power steering fluid. Check the reservoir and see how clean the fluid looks. Related to the engine, also try to check the engine coolant. Look to see if the coolant looks clean. It will usually have sort of a fluorescent green color. Some newer coolants also have a golden color. Regardless of the color, just make sure that it looks clean and is mostly transparent. You don't want to find sludge or oil contamination in the engine coolant. This can be a sign of serious engine trouble like a blown head gasket or a cracked cylinder head (or block), and require very expensive engine repairs. DANGER! In regards to checking the engine coolant, never open a radiator cap or a coolant reservoir cap while the engine is hot. You can be scalded by hot engine coolant and be seriously burned. Always check engine coolant when the engine is cooled down.
That brings up another important point in all this. If you are not interested or unable to check the car yourself, then try to find a friend or family member that is more experienced with cars to go along with you. In addition, it can be a good investment to take the car to a trustworthy car mechanic to have them check the car for you. There is no one that has X-ray vision that will allow them to see inside all the critical systems of a used vehicle, but you can increase your odds of choosing a good used car by looking for outward signs of any serious inward problems. In other words, you or someone else may not be able to spot all the potential trouble spots on a used automobile, but you can greatly reduce your odds of having trouble if you try to do a complete examination of the car before you buy it. Don't take shortcuts on this. You might get lucky and get a well maintained car, but you might also end up with a 60,000 mile Honda with an engine that is about to blow because the oil was never checked or changed!
3) KNOW IF THE PRICE IS RIGHT $. So, now that you've done your homework and you know which models are reliable, you have narrowed it down to a specific used vehicle and thoroughly checked it out, and so now the last factor to consider is price. Before you go to buy a used car, make sure that you find out the fair market on the model that you want. Unfortunately, used car dealers sometimes have a reputation of not always being honest, and while there are honest used car salesmen out there, you need to know what the fair market value is before you enter a discussion with someone. That way, you will know if they are trying to overcharge you. Some places where you can find used car values are: Kelley Blue Book, NADA Used Car Guide, or Edmunds. Keep in mind that prices will vary depending on option packages on specific cars, so there can be some variations in price even on the same year and model of used car.
WHERE TO BUY A USED CAR? Let's say that you have done all your homework. You know which used car you want to buy. You know that it has good reliability ratings. You know how much it should cost. Now you are faced with the task of where to find it. There are 2 general routes that you can go: buy from a private party, or buy from a used car dealer. There are some benefits in going either route. If you buy a used car from an individual, then you can sometimes get a better deal. There are no dealer markups which can drive up the price. On the downside, you are assuming a little more risk in dealing with an individual. You need to make sure that the car is not stolen and that the seller has a clear title in hand with no liens against it that might cause you trouble later. Make sure the car has not been in an accident. In many states, if a car was in a serious wreck and rebuilt, then the title will reflect this by stating something like "salvage title". For most people, it is probably best to avoid a car that has been seriously wrecked and rebuilt. Sure, you might be able to get a good car for an even better price this way, but you are trading off a lower initial cost for a greater chance of problems later. This is true regardless of whether you buy from an private party or dealer. Regarding buying from a used car dealer, if you find a good dealer, then you may have some more options available to you such as an extended service policy or Carfax data available right there. Speaking of Carfax, this can be another way to get some more information and check out the background on a specific used car to see if there are any records of accidents or serious problems. You can get the Carfax information online by entering the used car's Vehicle Identification Number (VIN) and paying a fee for the service. At the time this is being written, the cost to get a Carfax report is $34.99 for a single report, or $44.99 for up to 5 vehicle reports. You have to decide if this is worth the cost. Assuming you have already done your homework and selected a good make and model of used car, then the Carfax would probably be more useful just to verify that the car was not in a major wreck, flooded, or rebuilt after serious damage. Again, in some states, this would also be obvious by the fact that the state issued a salvage title for the vehicle.
Back to the question of where to buy a used car. Some of the obvious places are local car dealers in your area. You will likely be familiar with some of them just from your everyday driving around. You can also look up car dealers in the phone book to see what is available nearby. In addition, you can find used cars for sale from a large number of different car dealers online at Cars.com. Another large online resource for used cars is Autotrader where you will find both car dealer and private party sales. Your local newspaper can be another place to check for used cars for sale. For more online options, Craigslist and eBay are also possible places to buy a used car. Just remember that it is important to carefully inspect and test drive any used car in person before buying it. That means that with places such as eBay, you might need to limit your search to distances that are within a reasonable driving distance from you. The same is true with Cars.com and Autotrader. You might need to limit your search radius to a shorter distance, so that it is convenient for you to personally inspect each car of interest.
In conclusion, purchasing a used vehicle is a big decision that should not be taken lightly. The most important thing that you can do when buying a used car is to research and pick a year, make, and model that has a good track record for reliability. Next, thoroughly check out any used automobiles that you are considering to make sure that they were properly maintained. If you neglect either one of these important factors, then you can experience expensive car troubles down the road. If you overlook both of them, then you are almost guaranteeing yourself trouble - unless you happen to be very lucky. Finally, be sure to determine the fair market value of the vehicle upfront, so that you will not be overcharged when dealing with either a private party or a used car dealer. The worst possible scenario in purchasing a used car is to pick a model that had design problems to begin with, and then to make matters even worse, to buy a specific vehicle that was neglected by its previous owner. Once a poorly designed vehicle leaves the showroom floor, things can only go downhill from there once you add in time and additional wear & tear. About the only thing that would make this bad situation even worse is to overpay for such a vehicle! In the end, if you are a good student and do your homework well, then you are more likely to be rewarded with an A+ used car driving experience.