Used Car Buying Checklist
Spotting the good, the bad, and the ugly
Created by Steve Temple
Smart shoppers know that's it's usually better to buy a used car rather than new one. That's partly because the market value of a new car drops almost as quickly as the fuel gauge on a gas-guzzling SUV. Luxury cars in particular suffer the biggest depreciation in value, which is bad for the seller, but good for the buyer. After about two years, the resale price levels off and stays relatively steady for a few years after that, depending on the care and condition.
In addition, with all the improvements in quality control in recent years, cars are lasting longer than ever, so buying a used vehicle no longer has the stigma or drawbacks it once had. Another factor in consumers' favor is the glut of vehicles coming off leasing plans, which undermines the cars' residual (market) value, making these a good buy. No surprise, then, that almost three in four car purchases last year were made on used-car lots.
Homework
Armed with this knowledge, you're ahead of the curve in making your best deal on a used car—if it's in good condition. And there's the rub. One option is to buy a "certified" used vehicle (which the dealer supposedly inspects, but don't assume that's the case—due diligence is the responsibility of every used-car buyer). You can probably get an even better price by going through a private party, as long as you know what to watch out for.
First off, don't go exclusively by the "Blue Book" value, because those prices don't reflect actual market transactions. Check out those used-car web sites or car-sale magazines in convenience stores to get a better idea of the actual selling prices. Figure on being able to negotiate at least 10 percent off that asking price, even if the ad says "price firm." Once you've narrowed down your selection to a few promising offers, now comes time for an inspection.
Inspection
Start with a slow walk-around, looking for body damage or evidence of repair, such as mismatched paint or panels and ripples in the finish. Tires worn unevenly may indicate a twisted frame instead of merely an alignment problem. Crawl underneath with a flashlight and look for corrosion and fluid leaks. Check under the seats with a handheld mirror for rust, which can indicate a flood-damaged vehicle.
If the miles are unusually low, look at the brake pedal, the upholstery, or the carpet under the floor mats. If they appear worn, the odometer may have been reset (which can be done on either mechanical or digital units). The industry standard is 12,000 miles per year. If over that, the car's value is automatically reduced. High mileage reduces the value by thousands, not just a few hundred. Avoid high-mileage used cars, unless you get one for a really good price.
To verify claims of mileage and a vehicle's accident record, Carfax Vehicle History Service (
www.carfax.com) has a database of information that, the company claims, covers virtually every car on the road. The data comes from state registration and inspection records, auto auctions, salvage auctions and rental companies. The reports indicate such things as mileage discrepancies (a car that showed 70,000 miles when it was inspected in 1996 and 50,000 miles in 1997 either has a rolled-back odometer or someone entered the wrong mileage into a computer), rental-car use and accident-related damage. The company guarantees it will pay up to $1,000 if a vehicle it claims is "clean" but actually has a problem in its past.
In addition to a computer search, if possible, inspect the car early in the morning before it has been started. A cold engine reveals mechanical problems better than a warmed-up one. If you tell the seller not to start the car before you arrive, and the engine is warm, he or she may be trying to conceal something.
Check under the hood for overall cleanliness and the condition of hoses, belts and wires. Examine the dipsticks for oil and transmission fluid. The oil should be fairly clean (amber or brown, not black or sooty), and the fluid a bright pink or purple. Is the radiator fluid green? If not, it's been a while since the radiator was maintained and the fluid has turned brown (although some cars use a stop-leak preventative that's beige in color). Take note of any leaks or unusual smells, and listen carefully to the engine at idle and revving at 3,000 or more rpm. If you suspect some sort of engine malfunction, pay a mechanic to do a compression check on the cylinders, among other inspections.
Test Drive
During your test drive (don't buy a used car without one), have someone follow in another car to check for excessive smoke from the tailpipe (blue or black means burning oil and possibly bad seals or rings). While driving, vary the speeds and terrain so you get a feel for the car in a variety of conditions. Use all of your senses, and notice how the vehicle "talks" to you. For instance, if there's a shimmy in the front end, the transmission shifts roughly, or the car immediately drifts to the side when you lift your hands off the wheel, you may be looking at some significant repair bills.
Operate as many functions on the car as possible (lights, air conditioner, heater, stereo, power windows, etc.) to check for any items in need of repair. If you know that a particular model has a weak point (such as brakes, electrical, or air conditioning), try to determine the car's service history, and find out if anything has been done to address that sort of problem.
Above all, do not buy on impulse because the car is the color or style you like, while the engine is blowing smoke or knocking. Keep in mind that there is always another car out there. It's not your job to fix somebody else's lemon.
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