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Pros and cons of buying a used car

Finding the right dealership is key to finding the right used car. (Photo courtesy of member Benjamin S., Portland, Ore.)

Finding the right dealership is key to finding the right used car. (Photo courtesy of member Benjamin S., Portland, Ore.)

In the market for a used car? Make sure you understand the risks and rewards that come with searching for a used car, so you avoid driving home in a clunker.

Unlike the previous two buying options Angie’s List wrote about, buying new or leasing new, a used car has been driven before, whether 5,000 or 50,000 miles. How much research you do to find the right car and dealership will generally play a big role in the quality of the used car you end up with, auto dealers say.

“Generally with a used car, the whole point is to save money,” says Ken Peltz, with highly rated Jim Keim Ford in Columbus, Ohio. “When you buy a new car, you have some depreciation right off the lot. When you're buying a pre-owned, someone has already taken the depreciation out of it.”

Do plenty of research

Car dealers say you should decide what make/model/year of car you're interested in, how much you're willing to spend and the maximum number of miles you want on it before going to the dealership.

When buying a car from a private owner, spend the money to purchase a vehicle history report, experts say. Dealers will sometimes provide them for free, while many of the national reports come with a small fee. A history report allows consumers to receive information on the vehicle's title, most recent odometer reading, brand history, accident history and, in some cases, historical theft data. Companies such as Carfax, Auto Check and Kelley Blue Book, are just a few that offer such services and may have information about whether the vehicle was in a previous accident. If one of these companies indicate the car was severely damaged in a previous accident, the cost of the report was money well spent. The National Motor Vehicle Title Information System, meanwhile, offers vehicle title information.

You can find estimates on used car prices on various online websites. Use the information to negotiate with the seller.

“Not all people selling cars privately are truthful with you about the vehicle’s health or history,” says Bill Griffin, owner of highly rated Griffin’s Neighborhood Auto Clinic in Farmington, Mich. “For example, they may say, ‘We had a lot of work done,’ or, ‘This car never had a problem the whole time we had it.’ People selling cars privately many times are selling them because they won’t put money into it.”

How does the car perform?

It's always a good idea to take a test drive to see how the car runs.

“You can tell a lot from a test drive,” Peltz says. “Listen to the car. Leave the radio off and look at the overall condition of the car. Is the vehicle dinged and dented, and is the interior cleaned up? If it's ratted out in the inside, chances are someone didn't take care of the car, which is a reflection of the mechanical [operation] as well.”

Have it inspected by a trusted mechanic to learn if there are any problems and what its present condition is. A service facility should inspect for any wear or defects.

“Not all places provide a vehicle history report,” Peltz says. “A reputable dealership provides at least a minimum safety inspection on the vehicle. Some dealerships may just put some shine on it and put it on the lot.”

Look for drips and leaks and check service records to see how well the car was maintained, if available, Peltz says.

“Finding a reputable dealership is the biggest thing in my opinion,” Peltz says. “If you buy it from a big box dealership, the chances are they have a lot of experience with cars. Some of the smaller dealers that don't have a brand associated with it, they may not have had techs that have gone through training.”

Reasons to buy used

“Most used cars in the upper price range usually are lower mileage and in decent condition,” Griffin says.

If you're looking for something newer, search for a certified, pre-owned vehicle that has met its manufacturer's strict guidelines. Some of these cars are still covered under warranty, have not been in accidents and have undergone thorough inspections.

One- or two-year-old certified, pre-owned cars are a good deal, some auto experts say, because buyers avoid that depreciation hit that comes with buying a new car. They typically cost several thousand dollars less than new cars, which can lose up to 20 percent of their value after the paperwork is signed.

“You may get up to a seven-year, 100,000 mile power train warranty [on a used vehicle],” Peltz adds. “You're not going to get a full warranty that covers every part and piece [for the full length]. Sometimes, you'll get the remaining warranty from the original owner or full [coverage] for one year, or 17,000 miles.”

Reasons not to buy used

If you buy an older used car and there is very little information about it, you could end up with a clunker. In such cases, it's impossible to know if the previous owner followed manufacturer's guidelines on maintenance, like regular oil changes, which if neglected could lead to serious engine damage.

"You could be inheriting someone else's problem," Peltz says. "Keep in the back of your mind, why are they getting rid of the vehicle? Were they having a problem? Three- to four-year-old cars, generally they're in pretty good shape.

“If you buy a car for your kids for a $3,000 to $4,000 initial purchase price, how much do you have to put out to get the car in shape to put your kid in the car?” Peltz says.

Older cars can also break down and need repaired more frequently, many are not covered under warranty and there are fewer choices of styles and features.

Auto experts say if you do your homework, buying used can be the best of the three options. But just taking the seller’s word for it without doing any homework can also make it the worst choice you could make.


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