Before shopping for a used car, line up your financing options so you don’t get ripped off by paying exorbitant interest on an auto loan. You may not realize that banks are not your only option either because credit card companies such as Discover also make auto loans. Additionally, car insurance companies like State Farm also do auto loans. In fact, State Farm even has several credit cards you can carry, including rewards cards to help pay for your State Farm car loan or insurance.
Once you know how you are going to pay for your new car, then comes the step that consumers dread the most; walking onto a used car lot to haggle over the price of a vehicle. You can opt to buy from an individual seller, but that can also be fraught with stress because you may not be sure who to trust. Following these three golden rules can help take the guesswork and risk out of the purchasing process. If you’re a parent, teach these rules to your teens. They’ll be glad you prepared them before sending them out into the world.
#1 Don’t Assume the Vehicle’s History Report is Complete
Think of the history of a vehicle as you would the history of an individual person; the older they are, the more complicated their history is to remember and explain. You can buy a history of vehicle report from companies like Carfax or AutoCheck, which would be helpful for your decision process. The problem is that many buyers accept these printed documents as 100% accurate and complete, but oftentimes they are not.
The first golden rule of used car buying is to never assume a printout of the vehicle’s history report is complete. The chances are pretty high that even if the documentation is multiple pages long and covers all sorts of information, there will still be missing pieces to the puzzle. You should still take advantage of these resources, but don’t accept them as foolproof and don’t exclusively rely on them as the only way to check out a used vehicle. Even Carfax explains to their customers that when shopping for a vehicle you should use the vehicle history as a tool, but not your only tool.
Consider a history printout as just one of several resources that can help you make a more informed decision. After all, the data contained in the report is only as good as the sources it was derived from, and if an accident was never reported it’s not going to show up on the public history of the vehicle. One point that’s especially encouraging is when the dealership has papers that show the vehicle was taken to the dealership’s service department each time it needed maintenance, including for oil changes.
Additionally, you should ask the seller for copies of all their routine auto maintenance records and receipts. The more paperwork they have, the more likely it is that they are fastidious about car care. Disorganized people who don’t have any records may also be disorganized about vehicle maintenance, whereas hyper-organized types may be more inclined to follow the owner’s manual.
#2 Don’t Trust the Odometer
Generally speaking, the price of the car will rise by $600 or more for every 10,000 miles that are wiped off the odometer. Some crooks take advantage of that and illegally erase enough to add a thousand dollars or more to the price tag. They then sell the worn-out vehicles to unsuspecting buyers who believe they are getting a vehicle that is only gently used. The Today Show on NBC ran a story last year that explored the trend of shady car sellers illegally rolling back odometers. In the segment they explained that close to 200,000 cars have their odometers rolled back every year at a cost of nearly $800 million in lost value and needed auto repairs to unaware American buyers.
How hard is it to roll back an odometer? The electronic ones are actually easier to work with than the old-fashioned mechanical ones, and there are how-to videos and articles all over the web that explain step-by-step how it can be done. Something as simple as a faulty circuit, bad electrical connection or a disconnected cable can cause an odometer to stop functioning. That means that anyone who knows how to troubleshoot and repair such problems can reverse the steps in the process to deliberately render the odometer inoperable.
I have personally driven cars with a stuck odometer. Thousands of miles were put on the car, but none of them were recorded because the numbers never moved. Once I got the gadget fixed the odometer worked as it should, but all those miles don’t magically jump back on the odometer. The lesson I learned from that is “don’t trust the odometer.”
#3 Get the Vehicle Checked by Professionals
Most problems encountered when buying a used vehicle are due to inadequate information regarding whether the vehicle has too much wear and tear or has been in any serious accidents. Follow this third golden rule of having the car carefully evaluated by a top-notch mechanic and it could help you avoid some major pitfalls. Make an appointment to take the vehicle to them, coordinate with the seller, and be willing to shell out $100-$150 for a thorough pre-purchase car checkup.
Your mechanic should check out the condition of all important systems including the brakes, electrical components and drive shaft. Be sure they also do a compression check, which is one of the most important ways to test whether an engine has any hidden damage.
They should also study the paint job. The surface of a new vehicle is more or less consistently thick throughout the whole car, whereas repainting or blending of paint after a repair adds additional layers of paint and builds-up the thickness. There are even handheld digital devices that can accurately measure the thickness of paint on a car. Have a professional analyze your vehicle with this kind of sophisticated tool before you buy. They can point out whether or not the car has been damaged and then painted to cosmetically hide a problem.
Take it as a huge warning sign if your seller refuses to let you test drive the car and take it to your mechanic. The majority of reputable sellers have no problem letting your mechanic evaluate the car, whereas those who are afraid of what a professional inspection might reveal are likely to refuse the mechanical inspection.