How to avoid a sour used-car shopping experience
Twenty-two percent of members polled online say they've had a problem with a used vehicle they felt should have been disclosed when they purchased it.(Photo courtesy of Angie's List member Sara Deaver)
After years of relying on public transportation, Nicole Corbett of Portland, Ore., decided she wanted a car to get to school and transport her dogs around town.
She thought she got a good deal on a used Hyundai Accent from an area dealer last fall, but the car had problems out of the gate. She ended up spending $3,500 on repairs and several months later, the car was dead.
"The woman who sold it to me told me there was a 12-point diagnostic blah-blah check on it," says Corbett, who says she felt pressured to make a deal the day she walked into the dealership looking for a Honda Civic. "I think I was naive."
She joined Angie's List after the experience and negotiated a settlement with the dealership, Ron Tonkin Auto Acceptance, to return the car, but was out the money she spent on repairs and is back to riding the bus. The Ron Tonkin Family of Dealerships declined to comment.
About 72 percent of members who responded to an online poll say they've purchased a used car or truck. Some commented that they buy used because of the "drive-off depreciation" or unresolved kinks of a brand-new vehicle, but buying a pre-owned auto also comes with some risks.
Twenty-two percent of members polled online say they've had a problem with a used vehicle they felt should have been disclosed when they purchased it.
Dallas member Paulette Mitchell says shopping for a used car for her teenage son years ago taught her an important lesson. Before she considered buying the Ford Thunderbird her son had fallen in love with, she had her trusted mechanic inspect it and discovered it had a broken axle.
"I was shocked, angry and disappointed," says Mitchell, who moved on to another dealership. "That was just an accident waiting to happen."
Experts say taking a used car to a mechanic prior to purchase is the most important line of defense for consumers; however, only 24 percent of the members who responded to our poll consulted a mechanic before buying a used vehicle.
"When you repair a car that's damaged in an accident, the shop fixes the fenders and everything," says Pete Abbott, owner of highly rated Abbott's Auto Service in Glen Allen, Va. "You wouldn't notice it just walking by, but if you raise it up [on a lift], you see it."
He cautions buyers against relying on checks done by dealers. "You see these people who have a '160-point check' - bully-kai, that's an advertising gimmick," he says.
An independent pre-purchase inspection is the way to go. It can zero in on leaks, engine problems, trouble with the heating or cooling systems or any other sizeable, imminent repairs.
According to consumer research firm J.D. Power and Associates, pre-purchase inspections average between $100 and $200, but mechanics interviewed for this story say they usually charge about a half-hour of labor, or between $40 and $50.
"We should be able to tell within a half-hour whether the car is worth buying or if they should keep looking," says Pete Billgo, manager of the highly rated Riverside Automotive Service in Milwaukee. "If you're putting all your money into a car, the last thing you want to find out is that you have to sink $700 or $800 right after you buy it."
Vince Powell, owner of highly rated Powell Motors in Portland, Ore., sends cars to specialty mechanics before putting them on his lot. "I will frequently spend $1,000 or $1,200 on a car," he says. "I wouldn't want to sell a car that I wouldn't drive myself."
At Powell, buyers are offered a dossier of information about each vehicle that includes a free CarFax report and records of service done by the dealer.
Running a report on a vehicle's history using CarFax, AutoCheck or a similar service is another tool many consumers use to find a good buy.
Nearly 60 percent of members who took the online poll and detailed how they determined the pedigree of their used vehicle say they relied on these reports, which provide data on a car's history, like maintenance records and whether a car has been salvaged, stolen or fire damaged.
The companies amass data from sources like police departments, insurance companies, state motor vehicle departments and dealerships.
While these services provide useful information, they sometimes don't tell the whole story. Pittsburgh member Marcel Minutolo bought a used Volvo wagon with a clean CarFax record, but after he had a fender bender, he says his mechanic found it'd been in a serious accident based on evidence of body damage.
If a car owner doesn't file an insurance claim or a police report, there may be no record of damage, which was news to Minutolo. "These type of things go under the CarFax wire, so the report may be misleading in many ways," he says.
Both AutoCheck and CarFax acknowledge that experiences like Minutolo's happen and recommend a pre-purchase inspection as well. "That's the best one-two punch to protect yourself," says Chris Basso, a spokesman for CarFax.
Used-car buyers can also check a federal database launched in 2009 that requires all state motor vehicle departments, insurance companies and businesses that deal in salvaged, junk or recycled automobiles to report vehicle history information.
The National Motor Vehicle Title Information System captures data like odometer readings and whether it's been salvaged or flood damaged in an effort to prevent fraud like odometer tampering or "washed" titles.
A NMVTIS report, which costs less than $5, does not include all information that might be provided in other reports, such as maintenance records. About 90 percent of U.S. cars are expected to be in the database by year's end.
Member Michael Weinstein of Wesley Chapel, Fla., estimates he's bought 15 pre-owned cars - everything from Porsches to Subarus. He says it's critical to research the car you're considering beforehand, using websites like Edmunds.com, Kelly Blue Book and blogs written by car enthusiasts.
"Some models are cheap to buy, but the repairs are unbelievably expensive," says Weinstein, who drives a used BMW. Once you find a car you like, he suggests assessing its performance in different conditions, such as highway versus local roads, and checking basic features yourself, like windows and air conditioning.
Ira Rheingold of the National Association of Consumer Advocates says another way to ensure your used-car buying experience goes smoothly is to secure financing before you shop.
"Even if the car is a decent or good car, the other place that people get cheated on is financing," Rheingold says. "You need to be smart and shop around, and never assume that the financing your car dealership is giving is the best you can get."
Secure a loan with a trusted bank or credit union before considering a dealer's financing package so you can focus on negotiating a price.
"I always try to tell people they can do a lot by themselves before they buy," says Tom Davis, an assistant used car sales manager at the highly rated Roush Honda in Westerville, Ohio.
In addition to lining up financing options, Davis recommends going online to compare prices on similar cars at various area dealerships to use as leverage in price negotiations. "They're going to get a good buy, because they did everything they could beforehand instead of walking in here blind."