PreOwned Car Buying Tips
(from Consumer Reports Money Adviser)
FINDING A GOOD DEAL ON A PREOWNED CAR
UNCLEAR ON THE PIMP CONCEPTIf you've changed your car-buying plans from new to preowned as a result of the uncertain economy, you're not alone. In a recent Cars.com survey, 32 percent of auto shoppers who were considering buying a new car are now looking for a more affordable preowned vehicle. It's not a bad strategy, as late-model cars and trucks can cost thousands of dollars less than comparable new models, thanks to the big depreciation in value of new cars during their first year or so on the road.
But how do you avoid paying too much or getting stuck with someone else's headache? Here are some tips to help you get a great preowned car at a good price.
WHAT TO BUY
First decide on the make, model, and approximate age of the vehicle you want. Then find one that's been maintained properly. Here's how:
Look for a reliable top-scorer. Concentrate on models that get good reports from owners and automotive experts. The Consumer Reports Annual Auto Issue is a good source of information on preowned-car reliability, as is the Consumer Reports Used Car Buying Kit ($24 for a three-month subscription).
Get the newest car you can afford. Generally, a three-year-old model that's proven reliable is a good value because it has already depreciated significantly, yet it sports some modern safety features. A vehicle that's new enough to still be covered by a year or more of the manufacturer's warranty is your safest bet. Verify that the coverage will transfer to you.
Be wary of lease and rental cars. Lessees might neglect maintenance if they're planning to turn in the vehicle after a couple of years, as most do. Carfax, a company that provides vehicle history reports, says it has seen an increasing number of odometer rollbacks, which might be due to lessees reprogramming their mileage to avoid paying over-mileage charges. And rental cars are usually subject to much more abuse than other vehicles.
Ask for maintenance records. Look for a vehicle with a complete list of maintenance and repair records. Compare them with the service recommendations in the owner's manual.
WHERE TO BUY
Often the best source is a friend or relative with a vehicle that you know is well cared for and accident-free. Barring that, you'll have to comb the usual sources:
New-car dealers. You'll pay a premium, especially if you're looking at a certified preowned vehicle, which usually comes with an extended warranty. But you'll have protections you can't get with a private sale. Start with dealers that sell new cars of the same make that you're seeking.
If you don't find anything right away, ask the dealers to notify you when a customer trades in your desired model. Tell the dealers you'd like to talk to the former owner to verify the vehicle's history, as the Federal Trade Commission and Better Business Bureau recommend. Dealers sometimes balk, asserting that federal law prohibits them from disclosing information about former owners. Not only is that wrong, but at least four states - Kentucky, Maine, Massachusetts, and Wisconsin - actually require dealers to comply with such requests. When you speak to the previous owner, verify the vehicle's odometer reading, service record, and other details, including whether the car was ever in an accident or declared a lemon under state lemon laws.
Private party. You'll often get the best price here. But sales usually are as-is, leaving you little recourse if the car implodes as you drive away. If you buy from a private party, look for a car that's covered by the manufacturer's warranty.
Independent preowned-car dealers. Although they often have lower prices than new-car dealers, vehicle quality tends to be lower too. If the dealership has been around for a long time and has a good reputation, those are good signs.
HOW TO BUY
Buying a preowned car often requires a bit more legwork than purchasing a new vehicle. Follow these steps:
Find the right price. The Consumer Reports Used Car Price Service can help you find out what the vehicle's worth ($12 per report). You can also check prices free at www.edmunds.com and www.kbb.com. Use those prices during your negotiations.
Take it to a mechanic. No matter how new the car, have it examined by an independent repair shop certified by the National Institute for Automotive Service Excellence or AAA, preferably one that can spot body work, a sign that the vehicle was in an accident.
Examine the paperwork. Inspect the vehicle title carefully for words like "salvage," "reconstructed," or "theft recovery." State laws require that such designations, commonly called "brands," be printed on the title of a damaged car. If there's a lien holder, make sure the seller has a release showing the loan has been repaid. The title also can tell you who last owned the vehicle, such as a rental agency or, in the case of a leased vehicle, a finance company. Don't accept a vehicle with temporary or dealer plates, a sign that the dealer might not have the paperwork necessary to register it.
Get a preowned-car history report. Free and commercial preowned-car history reports could turn up a problem you need to know about. But the reports have limitations, as we found in a recent investigation (see below). Be sure to compare the last mileage reading in the report with the one on the vehicle's odometer.
Shop for financing. If you need to take out a loan, don't just blindly accept the dealer financing. Check with local and online banks and credit unions. Dealer financing usually is negotiable.
Read the contract carefully. Once you sign the contract, you're legally bound to the purchase unless the dealer violates its terms or the law.
Use a credit card for a down payment. A credit card will let you dispute the charge if a dealership pulls some hanky-panky and won't return your money.
Skip the extended warranty. It's usually unnecessary, especially if you buy a reliable model that's been inspected by a mechanic. If you can't resist the extended warranty, negotiate the price.
Get all that you're entitled to. Don't accept the vehicle if the seller owes you any parts or services.
VEHICLE HISTORY REPORTS NOT ALWAYS ACCURATE
Preowned car history reports have become more popular as buyers try to make sure they're not getting a vehicle with a problem. Many preowned car dealers and auto Web sites now offer free reports.
They might help you uncover problems, but sometimes they miss major damage, we recently found. And missing information might show up on a later report, a real problem if you paid top dollar for a vehicle based on an erroneous clean report and then want to sell it.
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