You may yearn for a new car, but your budget says "used." Just because you're buying a secondhand car, doesn't mean you have to settle for second rate. Asking the right questions can ensure that the used car you buy is a good value for the money you're paying, even if you don't get to enjoy that new car smell.
Whether you purchase your car from a dealer, online or from a private seller, knowing the ownership history is important. Besides ensuring that you are able to obtain clear title, the ownership history may give you clues about how well the car has been maintained. If a car has only had one previous owner, that's usually preferable to a car that has changed ownership several times. This is especially true for a relatively new car that has had several short-term owners -- the car may be a lemon.
Besides checking for obvious signs of damage such as rust, upholstery tears and dents, you should obtain the vehicle identification number and get a vehicle history report. The vehicle history report, which is available from a number of online sites for a fee, discloses such red flags as flood damage or serious accidents. If a vehicle history report includes a salvage title, run, don't walk in the other direction. A salvage title is issued when a vehicle is totaled, either through serious damage from environmental circumstances such as flooding or from a crash. Even if the vehicle history seems OK, you should have the car checked out by a mechanic before you pay any money.
Warranties, Lemon Laws and Buyer's Remorse
Many used cars are sold "as is," which means that once you've made the purchase, you are almost never able to obtain a refund. However, many newer used cars carry warranties for maintenance, parts replacement and repair labor costs. This is especially true for certified pre-owned cars, low mileage cars that the dealer or manufacturer certifies have undergone a thorough inspection before being offered for sale. In addition, the Cooling-Off Rule from the Federal Trade Commission allows buyers who purchase merchandise, including cars, at their own homes or away from the seller's main business location to return the merchandise within three days and receive a full refund. The Cooling-Off Rule generally doesn't apply to sales by private individuals, though. Finally, nearly all states have some version of a lemon law that covers cars, although some laws are limited to new cars.
Price and Financing
If you have an idea of the make, model and approximate year of the car you want, check out Kelley Blue Book for the average price for similar models sold in your area. If you run across a car that is much higher or much lower than the Kelley Blue Book price, be prepared to ask tough questions or just walk away. If you are not paying cash, shop around for financing. Even if you are credit challenged, steer clear of "buy here, pay here" lots that often feature poor quality vehicles with jacked-up interest rates for financing.
- CBS News: How to Buy a Used Car
- Edmunds.com: Vehicle History Report -- Your Key to a Good Used Car
- Edmunds.com: Buying a Used Car for Under $2,500
- Los Angeles Times: A Hard Road for the Poor In Need of Cars
- Federal Trade Commission:The Cooling-Off Rule -- When and How to Cancel a Sale
- Car Lemon: Lemon Law Summaries
- Cars.com: Questions to Ask the Seller
- Cars.com: Used-Car-Buyer's Checklist
- AutoTrader.com: Buying CPO -- Bridging the Gap Between New and Used
- AutoTrader.com: Buying Used: Maximize Your Value
- Kelley Blue Book: Get Your Used Car Price
- Los Angeles Times: Buy Here, Pay Here Alternatives
- Edmunds.com: Making Sense of Your VIN
- Edmunds.com: Which Vehicle History Report Is Right for You?
- Edmunds.com : How To Buy and Maintain a Very Inexpensive Car
- Bureau of Consumer Protection Business Center: A Businessperson's Guide to Federal Warranty Law
- 123Car.com: Lemon Law Information and Sites
- Car Lemon: Lemon Law Statutes
- Jupiterimages/liquidlibrary/Getty Images
- Buying a New Car Vs. a 2 or 3 Year Old Car
- How to Sell a Nonoperating Vehicle
- 10 Things to Look for When Buying a Used Car
- How to Buy a Used Car for First Time Buyers
- Will They Give Me Cash Back If I Trade in a Car?
- How to Buy a High Mileage Car
- Does a Car's Trade in Value Drop If It Has Been Repaired After an Accident?
- Can You Trade in Two Cars for One?