BBB Tips For Buying A Used Car

June 01, 2017

For many consumers, buying a car is second only to buying a home when it comes to big-ticket purchases, and the process can be just as daunting. Choosing a used car is a great investment that allows consumers to purchase a reliable vehicle that fits their needs while still saving money, but the potential risks involved make it all the more important to do your homework first.

Jim Camp, Better Business Bureau President and CEO, said consumers should make well-researched and informed decisions before purchasing a used car. “A used car might test-drive like a dream, only to be a clunker a few weeks later” Camp said. “It’s important to know the vehicles history and your rights under a warranty.”

Nationally, BBB has received 26,000 complaints regarding used car purchases in the past three years. Approximately 60% of these complaints follow a simple pattern: a consumer buys a used car, the car soon after malfunctions or fails to pass an inspection, and the consumer wants redress. Locally, over 602 complaints were made against used car dealers in the last three years. 

When shopping for a used car, BBB recommends the follow tips to avoid driving off the car lot in a lemon:

  • Do the research. There are many online resources to check the average retail prices of various makes and models of used cars depending on the year and how many miles are on the car. These prices will give you an idea of what the used car should sell for when looking at different locations.
  • Evaluate your finances and budget carefully. Check your credit score with one of the credit reporting agencies before shopping. Your credit score may impact the type of financing you qualify for, the terms of a loan, or even which vehicles for which you can be approved. Visit your bank or credit union to get pre-approved for a loan, so you can compare rates offered by the dealer. Allow room in your budget for repairs, which will help give you realistic expectations of what you can truly afford. Set a price limit. When calculating the cost, be sure to include the price of the tax, title, registration, and insurance. Together these costs are estimated to be 10% of the purchase price.
  • Ask specific questions about a vehicle’s history and condition. If a salesperson indicates that a vehicle has been “inspected” or “checked over”, ask for specific details. Was it a mechanical inspection, or just visual? Has the vehicle been put up on a lift? Ask for any records on the vehicle, including those related to inspection, prior maintenance, and any repairs or reconditioning done by the dealer. Ask for a vehicle history report, such as CarFax or AutoCheck. Many dealers are willing to provide this, and it can reveal past issues such as accidents. Remember that a vehicle history is only as complete as information reported, and is not a guarantee of the vehicle’s condition.
  • Consider having a qualified mechanic inspect the vehicle. Reputable dealers encourage customers to have an inspection done by a qualified mechanic prior to purchase, and will generally allow a vehicle to be taken off-site for a short time with some basic information such as a customer’s driver’s license and proof of insurance. Pre-purchase inspections can cost upwards of $100, but may help identify potential issues and save on costly repairs further down the road.
  • Get any additional commitments made by the dealer in writing. If the dealer has agreed to perform or pay for additional repairs as a condition of purchase, be sure to have these commitments written into the contract. This is sometimes referred to as a “We Owe” agreement. Get the timeframe for completion of repairs in writing, and make sure you understand who to contact to have work completed.