What You Should Know
The First Thing -- Learn!
There are loads of car models and options -- take your first step by learning what's out there. You don't need to learn enough to make a choice -- you simply want to learn enough to narrow the field.
How can you learn? Well, you've started with the right learning medium. The Internet offers loads of information on cars and options. For instance, try entering "used cars" in a search engine like Overture or Google.
You can find additional information at your public library and at local and internet bookstores like Amazon.
Examine used car advertisements -- ads on the internet, ads in your local paper or sales flyers, even ads on bulletin boards. Get a feel for asking prices and model availability.
As you gather information about models, you also want to be looking for information on repairs -- frequency of repairs on specific models, weaknesses and strengths of specific models, safety matters, recalls, etc. Also try to get a feel for danger levels on mileage for specific models. Some models may go over 250,000 with proper maintenance; others start to choke at much lower levels.
As you gather more and more information, you'll find that several models seem to fit your financial and physical needs. Now it's time to really research these models. You want to find out what type of repair is most often required and at what mileage levels it is likely to be required. You also want to get a feel for how available local repair shops are and the likely range of repair costs.
Remember -- ALL cars need repair. That's not a sign of weakness, that's just a fact. If normal maintenance is performed at the proper intervals, then the repair costs are likely to be lower. If maintenace has been skipped, repair costs will likely be higher.
Once you've identified a model and a price range, take a moment to think about how you're going to pay for your used car. You can pay the full amount in cash -- or you can finance your purchase. Research your financing options -- there are many attractive Internet possibilities -- and think about the length of the loan and the annual percentage rate. You will likely find that used car rates are slightly higher than new car rates.
If you do decide to finance, then be sure you understand these points before you finalize anything.
1) The exact (EXACT) price you're going to pay. This may include local sales taxes and registration fees.
2) The amount you're going to finance
3) The finance charge (how much it's going to cost you to finance)
4) The APR (the yearly rate of the cost of credit)
There are certain legal issues you want to be aware of. If you purchase a used car from a dealer, then the Federal Trade Commission's Used Car Rule requires the dealer to post a Buyer's Guide in every used car they offer. This Buyers Buide must tell you:
1) Whether the vehicle is sold "as/is" or with a warranty
2) If a warranty, then what percentage of repair costs the dealer will pay. Don't expect it to be 100%.
3) If the dealer promises you something, then get it in writing. Spoken promises are really tough to enforce.
4) The major mechanical and electical systems on the car, including some of the major problems you should look out for.
5) Recommendation to have the car inspected by an independent mechanic before you buy.
This last one is key ... let's repeat it just to make sure:
"Recommendation to have the car inspected by an indepenent mechanic before you buy."
This inspection is called a "Pre-Purchase Inspection", or PPI. It's not going to be free; but it's not that expensive, either. Figure to pay around $100 for a PPI -- but it's worth it if it keeps you from making a high-dollar mistake.
If a PPI finds a major repair will be necessary, you can look for another vehicle -- or you can factor in the cost of this repair when determining what price you're willing to pay.
If you don't know where to obtain a PPI, then look under "Automotive Diagnostic Service" in your Yellow Page directory. Ask how long the inspection will take and how much it will cost. Expect to pay this cost -- although you may be able to get the seller to "knock off" that amount or part of the amount if you decide to purchase the vehicle.
You may even find mobile services who will travel to the vehicle in order to perform the inspection.
Your PPI should include a written report (often on a standard form) along with cost estimates of the vehicle's repairs. You can use these costs to help you negotiate a final price.
If you buy a car from a private seller instead of a dealer, things may be a little different. Private sellers don't have to post a Buyer's Guide. Private sales usually don't include a warranty; sales are on an "as-is" basis unless you negotiate otherwise. The car may not even pass a state inspection!
When you buy from a private seller, you have to do a little more work to ensure a wise purchase. The PPI will help you a lot -- also try and obtain all maintenance records on the vehicle. This will tell you if the car was properly maintained.
This maintenance record isn't always available -- especially if the seller is not the original car owner. Again, your PPI is your best protection against a high-dollar mistake!
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