BBB says be smart when buying a used car

August 15, 2014

Buffalo, NY-- Buying a used car can be a great investment that fits your needs, while still saving money. Better Business Bureau serving Upstate New York receives daily calls from consumers who question a recent purchase they made or are confused by the used car industry as a whole. With used car buying season in full swing, consumers are advised to start with trust before making their next purchase and heed BBB advice. 

BBB received hundreds of complaints last year and over 39,000 inquiries about used auto dealerships in 2013. Common complaints include:

  • “Qualifying” consumers for loans; taking down payments, cashing checks or depositing the money, then telling them that they need a co-signer for the loan or more cash for the down payment.
  • Claiming repairs were minor then “finding more” or charging the consumer only to find the repairs were not done properly, or not done at all.
  • Telling consumers the car passes New York State inspection, only to find out from another mechanic that it does not.
  • Delivering vehicle to consumers, without making verbally promised repairs.

BBB offers the following tips for buying a used vehicle:

Set a price limit. Before you start your search, decide how much you can afford. 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.

Determine where to buy the used vehicle. Three common places to purchase used cars are private parties, dealerships, and independent lots. Private parties tend to have more reasonable prices without the pressure of a salesperson. Buying a used car from a dealership provides you with inspected vehicles and the balance of factory warranty or extended warranty programs. The Federal Trade Commission’s Used Car Rule states that dealers must post a Buyer’s Guide for every used car that is for sale. The Buyer’s Guide must inform you if the car is being sold with a warranty, the percentage of repair costs the dealer pays while under warranty and any major problems of the mechanical and electrical systems. The Buyer’s Guide also suggests getting the car inspected by your mechanic before purchasing. Keep in mind, when purchasing from a private party, sellers are not required to provide a Buyer’s Guide.  

Know what your warranty covers. Is your warranty bumper to bumper, limited powertrain? When repair work is to be done under the terms of the manufacturer's warranty, it almost always must be done by an authorized franchised dealership that sells your make of car. Remember, normal wear and tear is not covered. Powertrain warranties do not cover “wear” parts, like CV joints, clutches, and other parts that are known to have a limited life span.

Sometimes, deposits are not refundable. Many consumers are under the false impression that there is a law which entitles them to a refund made on a car deposit if they choose not to buy the car. There is no such law. Car deposits are non-refundable, unless the contract or sales receipt specifically contains a refund policy. Before signing on the dotted line or making a deposit, inquire what the dealership's policy is. If the contract does not contain a refund policy on car deposits, you may request one be written in the contract, or be written on an addendum attached to the contract.

Choose a car that fits specific needs. Think about the equipment the car offers, the safety features you need, the conditions the car will be driven in (snow, terrain, etc.) and any necessities required for you, your child or your family. 

Do your 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 it. These prices will give you an idea of what the car’s price should be.

Take the vehicle for a “test drive.” Be thorough when test driving a used car and make sure to examine all of the features. Turn the key to “accessory mode” to ensure the dashboard lights are on. If either the “check engine” or “ABS” lights remain unlit, it could be a sign that the vehicle may have a serious issue. While driving, carefully check the brakes, steering, and gear shifting. Make sure to listen to the engine for any noises. Take it on the highway, back roads, through traffic and any other types of terrain. 

Get a history report and inspection. When looking to purchase a used car, copy down the Vehicle Identification Number (VIN) from all parts in which it appears. Make sure all VINs are identical. The VIN provides an AutoCheck Vehicle History Report and allows the buyer to check the title of the used car. No matter where you purchased from, ask the seller for a copy of the service records and bring the car to a dependable mechanic to inspect before making the purchase.

Understand New York State’s Lemon Law. The Used Car Lemon Law provides a legal remedy for consumers who are buyers or lessees of used cars that turn out to be lemons. The law requires dealers to give consumers a written warranty, which says they must repair, free of charge, any defect in covered parts. If the dealer is unable to repair the car after a reasonable number of attempts, the consumer is entitled to a full refund.

If you believe your issue isn’t being addressed, BBBs AutoLine may help. AutoLine is the nation's oldest and most respected auto warranty dispute resolution program, it is an out-of-court program administered by BBB to settle automotive disputes.  An informal hearing is held where a neutral third party, the arbitrator, decides how the dispute will be resolved.

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