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Buying A Used Car

Each year, according to the Federal Trade Commission (FTC), consumers spend about $85 billion to buy more than 17 million used cars. They choose a used car for its indisputable advantages: lower price than a new car; slower depreciation; and greater flexibility in cost and availability.

Of course, along with these advantages, there are certain risks: a used car may have major mechanical or structural problems; replacement parts may be harder to find; the seller may misrepresent the car's mileage or condition; and warranty coverage may not be available.

The smart shopper's challenge is to make the most of a used car's advantages, and minimize the risks.

Pre-shopping Homework
Before launching your search for a good deal on a used car, spend some time considering many of the same factors that would apply to a new car purchase: how you will use the vehicle; how long do you plan to keep it; the size, style and appearance you need or prefer; and your budget for the purchase, as well as for operation, maintenance and repair costs.

You should ask friends about their experiences and satisfaction with their older cars -- would they buy the car again? Also, check auto and consumer magazines and books for information on the reliability records of various models. The annual Consumer Reports Guide to Used Cars can be particularly helpful in pointing out potential repair problems and trouble spots. The monthly Consumer Guide Used Cars Rating Guide also gives photos of each auto, and price ranges keyed to the condition of the car.

In addition, the National Highway Traffic Safety Administration (NHTSA) operates a toll-free hotline (800-424-9393), through which you can find out if a particular vehicle has ever been recalled for safety defects.

To help you investigate and compare prices, several publications are available which give approximate dealer and consumer prices for many models. Your library, bookstore, bank, or insurance agent should have a copy of the monthly N.A.D.A. Official Used Car Guide, monthly Kelley Blue Book, or quarterly Old Car/Truck Red Book.

Also, check your local newspaper's ads for an overview of current used car prices in your area. Comparing prices of similar makes and models can give you an idea of which seller offers the best deals.

Used Car Sources
Consider the following sources when looking for a used car:

New car dealers often sell the best of the cars they acquire through trade-in deals. Those cars may cost more than used cars available from other sellers, but they are more likely to have undergone necessary repairs in the dealer's service department. They are also likely to come with a limited warranty from the dealer.

Used car dealers generally sell vehicles that have seen a bit more use and abuse than those on the new car dealer's lot. You may pay less, but the car is less likely to have received needed repairs. Used car dealers also may offer limited warranties.
If you are considering buying from a dealer, check out the dealer's reputation and reliability first. Ask for the names and numbers of several previous customers, and contact them to find out how they were treated after the sale, and whether the car was as reliable as the dealer represented it to be. Also, call BBB for a reliability Report.

Car rental agencies may sell used rental cars, generally 9 to 12 months old, and driven less than 25,000 miles. The company usually can provide the car's maintenance and repair records, and may offer a limited warranty. But mileage on rental cars is often high on a per-year basis, and the cars may suffer from the wear and tear of use by a variety of drivers.

Bank and loan companies sometimes sell repossessed cars to pay off defaulted loans. Quality varies from car to car. But since the vehicle is being sold to recover the amount due on a loan, it may be possible to get a good price on a good car.

Private owners usually sell their used cars through newspaper ads. Combing through a sea of clunkers in search of a pearl can be time-consuming, and warranty and repair services are not available. On the other hand, you may find a well-maintained car selling for less money than you would pay a dealer.
If you buy a used car from a private owner, ask for the car's maintenance and repair records and, if the seller is the first owner, for records of the original purchase. Also, check the title to make sure the person selling the car is the legal owner.

The FTC Buyers Guide
Under the Federal Trade Commission's (FTC) Used Car Rule, all sellers of used cars (except private owners), are required to place a large sticker called a "Buyers Guide" in the window of their used cars, light-duty vans, and light-duty trucks. The "Buyers Guide" tells you whether the vehicle comes with a warranty and, if so, which systems are covered, how long coverage applies, and what percent of repair costs the dealer will pay.

The "Buyers Guide" also alerts you when a car is being sold with implied warranties only, or with no warranty at all ("as is"). The dealer has no further responsibility for a car sold "as is," once the sale is complete and you drive off the lot.

Under most state laws, if the car does not come with a written warranty, but is also not sold "as is," it is covered by an implied warranty. Depending on your state's particular laws, the implied warranty may guarantee that the car will run, or that it will live up to the seller's assurance that it is fit for a particular purpose, such as pulling a trailer. Your state consumer protection office can provide more information about the specifics of implied warranty coverage.

Checking It Out
When you are judging the quality of a used car, try to inspect the car in daylight, and in good weather. Bring a friend along, if possible, to help you make a thorough appraisal.

Expecting perfection in a secondhand car is impractical. Be willing to compromise on minor problems that you can correct yourself, but at the same time, do not let yourself be talked out of focusing on more serious defect. Be alert: some sellers are adept at masking problems, and a steam-cleaned engine and gleaming paint job are no indication of the quality of the automobile.

Finally, it is essential to take the car on a road test before committing yourself to a purchase. If you are not allowed to test drive the car, do not buy it. Take your friend along when you make the road test. If the dealer insists on accompanying you, do the driving yourself and ask the seller to sit in the back.

Use the following checklists when evaluating a used car.

On the Lot Checklist
Body: Look for rust, particularly at the bottoms of fenders, around lights and bumpers, on splash panels, under doors, in the wheel wells, and under trunk carpeting. Small blisters may indicate future rust sites. Check for paint that does not quite match, gritty surfaces, and paint overspray on chrome -- all possible signs of a new paint job, masking body problems. Look for cracks, heat-discolored areas, and loose bumpers -- warning signs of a past accident.
A welded seam may mean that the car is actually a body shop's "rebuilt" creation from salvaged parts. Look for welded seams in the trunk and on the floor; bumps under the paint around the windshield, rear window or between doors may indicate a rough welded seam beneath the paint.

Tires: New tires on a car with less than 25,000 miles may indicate that the odometer was turned back. Uneven wear on the front tires usually indicates either bad alignment, or front suspension damage. Do not forget to check the condition of the spare tire.

Battery: Look on the sticker for the guarantee date. A battery generally needs to be replaced after 25,000 miles.

Doors, Windows, Trunk Lid: Look for a close fit and ease of opening and closing. A door that fits unevenly may indicate that the car was involved in a collision.

Window Glass and Lights: Look for hairline cracks and tiny holes.

Tailpipe: Black, gummy soot in the tailpipe may mean worn rings, or bad valves, and expensive repairs.

Shock Absorbers: Lean hard on a corner of the car and release; if the car keeps rocking up and down, the shocks may need replacing.

Fluids: Oil that is whitish, or has white bubbles can be a sign of major mechanical problems. Check the radiator fluid; it should not look rusty. With the engine idling, check the transmission fluid; it should not smell rancid or look dark brown. Check for leaks and stain under the car, on the underside of the engine, and around hoses and valve covers.

Lights and Mechanical Parts: Make sure all headlights, taillights, brake lights, backup lights, and directional signals work properly. Test the radio, heater, air conditioner, and windshield wipers.

Interior: Check the upholstery for major wear and tear. Do not forget to look under floor mats and seat covers. Check the adjustability of seats, and make sure all seat belts work. Check the steering wheel; unlocked, with the engine off, it should have no more than two inches of play.
Lots of wear on the driver's seat, with low mileage, may indicate tampering with the odometer, so may heavy wear on the brake and accelerator pedals. A musty smell inside the auto could mean that the car was damaged in a flood, or that rain leaks in.

Road Test Checklist
The car should start easily and without excessive noise. Once the car has warmed up, listen for engine noise as you drive; unusual sounds may be signs of major trouble.

Drive over rough road surfaces; watch for unusual vibrations, noises, or odors.

Make several stops and starts, at varying, but safe, rates of speed on a clear, level road surface. The car should accelerate without hesitation, and should brake without grabbing, vibrating, or pulling to one side. When you step firmly on the brake pedal, it should feel firm, not spongy.

Have your friend look at the exhaust while you let the car decelerate from 45 mph to about 15 mph, then step hard on the gas. Blue smoke may mean worn rings or valves; white smoke may indicate a cracked block.

Try turning at various speeds. Too much sway or stiffness can mean bad shocks and/or front end problems. Turn the wheel all the way from one side to the other; power steering should feel smooth, with little or no squealing.

Check the wheels for "dog-tracking." Have your friend stand behind the car as you slowly drive away. If the back wheels head slightly to one side, the car has major frame problems.

Look for these signs of odometer tapering: white line between the numbers that do not line up, or vibration of the 1/10 mile numbers while the car is moving.

Finally, take the car to a reliable repair shop or auto diagnostic center, and have the mechanic give it a once-over. You will have to pay for this service, but the money you invest upfront may save you many more dollars down the road. Ask for a written estimate of the costs to repair any problems the mechanic finds, and use that estimate as a bargaining chip when you make your offer for the car.

Tips to Remember
Before signing the contract:

Take your time to read, and understand, the entire agreement.

Make sure all blank spaces have been filled in, all of the salesperson's verbal promises are included, and the type of warranty that comes with the car is spelled out.

If you are required to make a deposit, ask whether it is refundable, and under what circumstances, and make sure the information is also included in the contract.

Most state laws require dealers of used cars to provide the buyer with a signed statement verifying the mileage at the time of sale.

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As a matter of policy, BBB does not endorse any product, service or business.

BBB Business Reviews are provided solely to assist you in exercising your own best judgment. Information in this BBB Business Review is believed reliable but not guaranteed as to accuracy.

BBB Business Reviews generally cover a three-year reporting period. BBB Business Reviews are subject to change at any time.