Monday, January 24, 2011

How To Buy A Used Car the Right Way

Background: Why You Should Be Wary Buying Used Cars Without 3rd Party Inspection

"Certified Pre-Owned Cars." Carmax and other non-brand dealers along with every brand in existence make big bucks on used, "Certified" used cars. Unlike new cars, they actually make money on used cars by offering low buying points and selling high. There is nothing wrong with this, but it definitely doesn't represent the best way to buy.

The last three used cars I or family members have bought have needed, respectively, $3000.00, $2700, and $900 worth of work after certification by a major branded entity. Today, my Fiance had a dealership walk away from a deal after we had it independently inspected. The certified technicians at a local dealership had missed a vehicle that needed a transmission flush (it was 30,000 miles past due by their maintenance schedule. The dealership inspecting it had handled all of this cars servicing in the past), all new pads and rotors (front and back), new lower ball joints, and the alignment that would need to be done after the ball joints were replaced.

Our mechanic could do this work for just shy of $1,000, but the local dealership could not. They tried to get my Fiance to pay for the work their "certified" mechanics had missed. Sadly, this doesn't take gall - it is standard industry practice. They then came back offering her discounts - $300, leaving her $700 to pay. Then $500, leaving her $500 to pay. Now, they're acting like she is not being fair, so she walked away from the deal.

What to Do

Whenever you buy a used car, demand that you be allowed to have the mechanic of your choice inspect the vehicle. Then, take it to the most reputable and thorough mechanic that you can find. Most shops will have a "courtesy" checklist. They like these because it is one of the ways they generate business; have them use it as the basis for their inspection, and ask them to also use their experience and intuition to go beyond these parameters.

IMPORTANT: Always have a compression check done on the engine. This will normally cost you more than the rest of the inspection combined, but it is well worth it. I recently had a friend who got a vehicle inspected prior to purchase. The spark plugs (which must be removed to do a compression check) were stuck! The mechanic stopped, the vehicle was returned to the dealer, and they attempted to remove the plug. The bulb ended up falling into the engine, and the head had to be removed. This would have been a $600-$900 spark plug change! He ended up buying the vehicle without eating that cost.

Don't "Play Games"

I've never purchased a used vehicle without it needing some work. It has to be done, and the only question is who will pay for it. The dealer wants to make the sale and he wants you to eat the cost of the work. Here are some common methods they have of doing that:

  1. Guilt. "We can't do that work for what your mechanic can. We'll lose money." Surprisingly, this works on many people!
  2. Dismissal. The dealership will try to tell you that your mechanic is being too picky, and that the parts in question actually don't need to be replaced. Don't buy it.
  3. Negotiating. The dealership will offer to cover the labor if you buy the parts, or vice versa. Failing this, the dealership will offer to discount the car. They get away with this because many people don't know how to do basic addition and subtraction. If they discount a car needing $1000 in repairs $500, you're still out of pocket $500. Additionally, you'll be out of pocket for any issues that might arise in the repair pocket.

Be courteous, but make it clear that for you to buy the vehicle, the repairs have to be made. If the dealership will not do it, walk away.

Closing the Deal.

After the dealership fixes the vehicle, have it inspected again. "That's insulting!" Yes, it is. However, it is not as insulting as being told work was done and then finding out it was in fact not done, and that you've been played for a fool.

My dad bought my sister a 1996 Toyota Camry from one of the largest Toyota Dealerships in Memphis. On inspection, it was obvious that the vehicle needed all new struts. Four struts. The dealership agreed to replace the struts, put the car in the shop, and then told my dad they had made the repairs. He surprised them by getting the vehicle inspected again. The two front struts had been replaced. The rear struts had been painted. My dad could have easily sued that dealership for fraud. He didn't. Instead, he had them make the repairs and reimburse him for the 2nd and 3rd inspection charges.

It is sad that there are some real scam artists out there. I sell used engines, and encounter these types of things in my competition all the time. Though there are bad apples in the industry, realize that there are excellent companies in existence who will take care of their customers. Find these companies and patronize them!

Final Thoughts

Let me close by saying that buying from a dealership isn't in actuality the best way to go. You're paying for a nice building, some Starbucks coffee, and a sales and support staff. Oh, and a car. What you really WANT is a good car.

Shop privately using,, and your local newspaper. Then have the vehicle inspected. Have the owner fix what needs fixing, and then buy the car! The seller will get a higher selling price on a private sale, and you'll get a lower buying price on a private sale. This is a "win-win" situation.

Please feel free to distribute this to friends. I only ask that you cite me, Matthew Nowlin, as the author.

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