By on July 7, 2011


Used cars give automobile buyers the best possible bang for the buck– except when they don’t. As a professional dealer, I could tell you stories of used car calamities that would make public transportation seem like the only sensible option. Tales of stitched together death traps that looked as new as the day both cars were born. Cars with supposedly clean registration papers that turned out to be hotter than Peachtree Street in mid-August. Instead, I’m going to tell you how to buy a used car without getting your proverbial clock cleaned.

Finding an appropriate used car is a pretty simple business: decide what kind of car you want, research it online (especially model and brand-specific enthusiasts’ sites) and then go out and find one.

You can find a great car at a variety of sources: private, owner, independent used car dealer, used car superstores, new car dealer; even a “buy here / pay here” lot might stock a great vehicle or two (credit the law of averages). On a percentage basis, I’ve found that private owners and independent dealers offer the best bang for the buck. Conversely, your neighborhood impound lot or public auction is a no-no nadir.

When you make contact with the seller, ask for the car’s VIN (Vehicle Identification Number). That’s the government-mandated ID code welded onto the car’s chassis (and attached elsewhere), and listed on the car’s registration papers. Thank the seller for the info, tell them you’ll call them back, and hit the ‘Net.

Plug the car’s VIN number into Carfax’s or Autocheck’s on-line database. For a nominal fee, these sites will tell you if the car’s been flooded, torched, stolen, crashed, rebuilt, salvaged or had its odometer rolled back. Equally important, it’ll let you know if the car was a rental, a fleet vehicle or had a long series of owners (i.e. sporty models with neglectful owners are financial time bombs).

This due diligence must be done, but the information is far from perfect. Any damage not filed in an accident report won’t show up. Arbitration issues can also fall through the cracks. When TTAC alum Frank Williams checked an Audi he once owned, the report made no mention of the fact that Audi

bought back the car under Lemon Law provisions.

To fill the holes in a used car’s mission critical history, it pays to dig a little deeper.

Contact the service department at the brand-appropriate dealership and ask the service advisor for a maintenance report. By law, dealers can’t print out the information or give the owner’s name. But they CAN verbally report a car’s service history. If you’ve got the wrong dealership, contact the seller and ask where the car was serviced.

This brings us back to your most important source of car-specific information: the seller.

After you’ve secured the VIN and done your homework, call the seller back. There are dozens of excellent questions you can ask, and one you shouldn’t: what’s the price? Avoid negotiating price for the same reason you wouldn’t bid on a house without looking inside.

Here’s how I do it:

“I like to catch up on maintenance whenever I buy a car. Can you tell me where the car was serviced, what you’ve done lately and if there’s anything else I’ll need to do in the next year or so?”

“I usually have my cars inspected at ‘x’. If I like the car, would it be OK to have it inspected?”

I always use conditional words and phrases– “Can you… would… do you know…is it possible.” It’s non-threatening, and the polite approach encourages the owner to provide additional information.

Thank the seller; you’ll call them back when you’re ready to see the car in person.

If confidence is still high, it’s time to determine an appropriate price. Forget Edmunds, Kelly Blue Book and NADA. For popular late model used automobiles, eBay’s ‘Completed Items’ section is the only pricing guide that matters. Specifically, check out your prospective purchase’s green “ending price.” The number reflects the final purchase price for cars that actually sold in the marketplace.

If there aren’t any recent or enough listings, go to your local bank or credit union. Tell them you’re looking at buying a used car and ask them to print out an industry wide pricing guide called the Manheim Market Report (MMR).

The MMR lists wholesale and retail used car prices based on millions of recent transactions. Although the MMR is not for public consumption, almost all financial institutions with an auto lending department have access to this information.

Time for a bid? Nope. Time for a test drive.

Mr. Lang invites readers to share their used car buying advice and their used car triumphs and tragedies below.
He can be reached at steven.lang@alumni.duke.edu

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36 Comments on “How to Buy a Used Car – Pt. 1: First Contact...”


  • avatar
    Bryce

    My last car was adeal as it turned out I needed a cheap car and it had to be cheap to run so I bid $310 for a 1990 Toyota Corona Diesel rough paint rough interior current W.O.F. and more roadtax than kms on the speedo it drove badly enuff to be scary and rained oil the whole car dripped underneath and the ijector pump leaked I spent $200 on parts repaired all the faults and drove it for 9 months and sold it to a mate who loves it Great fuel economy no power at all 2c engine auto no turbo but it will run all day at the speed limit and get 45mpg I got $600 and he was happy with the car cant moan on that one

    • 0 avatar
      twotone

      I’ve owned over 30 vehicles in my 40 years of driving. All were used cars and, except for two, were purchased from private owners. I buy the seller as much as I buy the car. Nice home, clean garage, all service records — yes. Lives in a dump — move on. Even those cars that pass the initial sniff test get a PPI from an independent mechanic specializing in the make. I’ve yet to buy a lemon.

      • 0 avatar
        jpcavanaugh

        You are absolutely right. I am sure there are exceptions, but I have never seen a decent car that has been photographed in an alley. And my definition of “nice car” must be way off, because I have wasted a lot of time driving to see a “nice car” that is a steaming crap pile.
        A prior owner who keeps a neat property has usually maintained his car well. My best cars have come from older people in more expensive neighborhoods. These people are not desperate for money (usually) and are looking for a fair price. They don’t want to get skinned by a dealer and don’t want to skin a buyer.
        Also, once a car hits 10 years old, you can tell how it has been maintained. Most of my used cars have been 10 years and older.

  • avatar
    dwford

    Carfax is only as good as the info reported. We sold a 2010 Elantra last fall with a clean Carfax, only to have the customer come back this week pissed because now the car shows an accident. Turns out, the car HAD been in an accident before we bought it at auction, but the fine state of Alabama didn’t get around to reporting it until months later after the customer had bought it from us.

    MMRs are great, but you can’t always tell what trim the car is or what equipment it has on it. Don’t expect to pay an MMR number from a dealer. Dealers have to recondition the car before resale, transport it from the auction to the dealer, etc.

    Ask the seller to provide maintenance records, and take the car to your mechanic – especially if the car is older.

    • 0 avatar
      joeveto3

      I would like to add a second caution to trusting what CarFax reports. I bought a 4Runner that had a clean CarFax. I loved the 4Runner I found, because I thought it was an odd 1-off. See, it had the 3rd row seat AND a FACTORY moonroof. From my research, this was an impossible combination for the model year. It also had some odd dents at the roof rails that were barely noticeable.

      Later, when I shopped it at CarMax, they asked me if it had ever been in an accident. “Not with me, and it has a clean CarFax.”. Was my honest response. They left and returned only to ask me again about it’s accident history. I repeated what I said before. That’s when they showed me the AutoCheck which revealed several accidents. It began to make sense, why this particular 4Runner had a moonroof. An accident could have made a new roof necessary, and the one they found had a moonroof.

      The accidents found also made all the rust I found at various spots on the truck’s body and frame easier to explain.

      Bottom line: In my opinion, dealers like to use CarFax for selling vehicles, because a lot of incidents aren’t caught. I also believe AutoCheck catches more, though I can’t explain why. The best advice I can give, is to use your eyes, or the eyes of an experienced mechanic to weed out the garbage.

      As an aside, the 4Runner never gave me an ounce of trouble beyond fuel economy in the mid 16′s. But I can’t guarantee what it would do if in yet another accident. Toyota, to it’s credit, repaired any rust I found at no charge to me. The rust repairs showed up on the AutoCheck report, but not CarFax.

      • 0 avatar
        Flybrian

        AutoCheck is used at all major auctions and reports announced or arbitrated ‘frame damage’ whereas Carfax skips this major telltale.

        Granted, not all frame damage is major, nor is it all completely accurate, but it does give you a better overall scope.

        I use AutoCheck when I buy and also present it when I sell for the other reason that AutoCheck is by far cheaper. $44.95 for a monthly private subscription (SHHHH! ;)) vs. $900/mo for a corporate CarFax subscription. Also, CarFax somehow feels it necessary to now dictate value by adding their own ‘add’ or ‘deduct’ for what seems tob e arbitrary and specious reasons to the value of the car. No thanks. Just the facts, ma’am.

      • 0 avatar
        NN

        My experience with incomplete data is similar, but switch the services. I ran a Carfax on a 2002 Mazda Millenia I bought in 2009. Showed clean. Car had 65k on the odo, so I bought it, took it home, and had tons of problems with it. I went to get an appraisal at a dealer, they pulled a Carfax, and service data that showed the car with actually 113k miles had appeared months after I bought the car. I did some research and came to find that the shop that serviced the car updated to a new computer system a couple months after I bought the car, which uploaded all their data to Carfax. The car I bought had had the odo rolled back quite a bit. I went to Carmax to trade it in, disclosed to them the odo was wrong, and they pulled an Autocheck that didn’t show the high mileage…the Autocheck was clean. I sold the car with a full disclosure nonetheless and sued the bastard who sold it to me (who rolled the odometer back).

      • 0 avatar
        ExPatBrit

        The classic way to “wash” a title is to repair it and move it to another state.

        By the time the paperwork catches up it’s too late.

        I once looked at purchasing a “perfect” low mileage Audi S4 for a pretty good price. Turned out it had been involved in serious accidents in (2) states and been totaled twice both times.

        Carfax picked it up, but the body language from the seller was a big red flag.

  • avatar
    findude

    Excellent advice.

    Regarding the net, I recommend also typing the VIN at ebaymotors.com in case the car was auctioned and not sold (hint, it’s not worth more than the highest bid it didn’t sell for). In addition, use a site-specific search string on Google for the local craigslist (e.g.: “site:washingtondc.craigslist.org 2002 Ford Crown Vic”) as the Google hits will outlast the hits from the craigslist search. You may not be able to click through, but often there is enough text in the Google result to know that the car was previously advertised at a different price.

    An excellent way to get information out of someone in person also works well, though to a lesser extent, on the phone. Once you get the person talking about the car, especially things it needs, go for the long silences. Most people hate silence enough that they will instinctively fill it with . . . . more information. This is also when they are most likely to spill the beans on stuff they weren’t necessarily planning to say.

    Also, many “private” party sales (especially on craigslist) are really pseudo-professional “dealers” (licensed or not) who make a living flipping cars. It’s good to ask “How long has the car been registered in your name?” Also, if the seller keeps reiterating the same three or four positive points about the car and not really answering specific questions, they do selling for a living. This doesn’t mean you can’t get a good deal on a great car, but it means that you may have to work harder to get information and then to get the deal you want.

  • avatar
    skor

    “Conversely, your neighborhood impound lot or public auction is a no-no nadir.” Man, you got that right. My local county government car auction is so crooked, it needs braces. I attended once, even though I was warned not to. The few decent cars were essentially stolen by people connected to county government….mostly cops. What was left was junk…one car had a small tree growing through the dashboard. The junks were bought up the local scrap metal dealers. Stay away, far away.

  • avatar
    Ubermensch

    I believe that it used to be the case that my state did not require a title to report accident damage unless it was over a certain dollar amount. A car could have every body panel repaired over it’s lifetime without ever needing anything on the title. I looked a used car back in college that had obvious severe front end damage that was badly repaired and the title was clean.

    Car Fax is a good place to start but don’t think it is gospel.

  • avatar
    obbop

    Not that the Traditional Coot Method of Used Vehicle Buying is perfect: I may have merely been lucky over the decades.

    I eye-ball the unit and test drive then ask a few in-person questions of the seller or their representative.

    The one time I took the for-sale unit in for a mechanic’s perusing was with a 1991 Toyota Previa van that was a wee bit harder to “sample.”

    I have either been very lucky or the used-vehicle sellers were honest (all private parties) or Karma has been very kind to me.

    The one dreadful vehicle I owned; a 1980 or whatever Audi 500, was a “gift” from Mom’s husband who never did like me. And that “gift” proved it!!!!

    A gift that cost me more than if I had refused it from the get-go!!!

    Such is life for the Disgruntled One.

    But, all the other used vehicles provided wonderful service.

    Nonpareil. Soul-satisfying. Even my well-padded buttocks were pleased with seat comfort; also when the derriere’ was not padded; downright emaciated, even.

    From a 1972 Duster to a 1975 Honda Civic CVCC to a Datsun 710 to a 72-1/2 Datsun Lil Hustler to that 1978 bought-from-the-junkyard theft-recovery Hilux pick-up and using the chain-around-the-tree and radiator support method of body straightening my good luck with used conveyances has, perhaps, defied the odds.

    Or perhaps my scowls and growls and hulking presence led sellers to be truthful in regards to their for-sale iron.

    One hombre, an older gent, was selling a nice-looking Volvo wagon, was it a late 70s model? I forget but it was a boxy thing and drove nicely and felt well-built but he actually talked me out of buying it declaring that some problem in Europe made parts hard to get and when needed were too expensive.

    I growled my “Thanks” and grabbed the Civic a couple weeks later.

    If only that ONE new critter… Mr. Crappola 2004 Chevy Silverado, had been as reliable as my used vehicles.

    Figures; the ONE new vehicle I ever bought and GMC, from the corporate level downwards SCREWED me repeatedly in regards to honoring their mainly useless warranty.

    Have a wonderful weekend, herd.

    May all your vehicle purchases regrow any missing hair and put a skip into thine step as ye traipse across the planet.

  • avatar
    The Comedian

    The original posting of this primer (http://www.thetruthaboutcars.com/2007/06/how-to-buy-a-used-car-pt-1/) had many good comments.

  • avatar
    JimR

    The human component of dealing with a private seller is so important. Glad it was mentioned. A few minutes of shooting the breeze face-to-face on driving and maintenance habits and even personal details will tell you volumes about how a car was treated. I feel like doing the “reconditioning” myself after a private sale is worth the confidence of knowing the last owner’s behavior.

    Thanks for the summary. Articles like this get bookmarked and shared when the subject of a friend buying a used car is raised. Unfortunately, I still don’t have an answer for a non-gearhead’s “Oooh, that’s pretty. I’m buying that one.”

    • 0 avatar
      Educator(of teachers)Dan

      “Oooh, that’s pretty. I’m buying that one.”

      That got a good laugh out of me because I thought of all the people I’ve known (male & female) who answered the question; “What kind of car is it?” with “It’s red!”

    • 0 avatar
      evan

      Whenever I buy a car from someone I always ask a few John le Carre style questions… These are questions I already know the answer to, but ask anyway just so I can judge his or her credibility. (I know, I think I’m so smart!)

      Just as an example, take a look at the quality of oil on the dipstick, and then later ask how long its been since the oil was changed – If they say “recently” and yet the oil looks old, well, that’s enough to make me really suspicious of everything I’ve heard.

  • avatar
    Penaloza

    Hey Steven,

    Do you have an opinion on clearbook? It’s the used car pricing site from the truecar.com folks.

  • avatar

    Thanks, Steven. Just the facts, and great advice!

  • avatar
    radimus

    And that, ladies and gentlemen, is why overpriced outfits like CarMax make so much money. No average car buyer is going to think of checking two thirds of what Steve details just in part one.

    Oh, and if you’re too cheap to pay for a Carfax or AutoCheck subscription just try mooching a report when you needed. If you’re looking at a car at a dealer they’ll have accounts at one or both of those services, so ask them to print a report out for you. If you’re looking at a private sale vehicle and you’re on friendly terms with a local dealer stop by when it’s slow and ask him to print one for you. I’ve never been refused on this, and if a dealer doesn’t have a subscription you probably don’t want to be buying his cars anyway.

    • 0 avatar
      ciddyguy

      For CarFax anyway, you CAN buy individual reports for $40 or something like that IIRC.

      I did that with my truck and it turned out to be a local truck here in Washington State since new and had a note where the last mileage reported was 126K back in 2001 and friends whom I bought it from were told a major repair, but they could not recall exactly (head repairs?) The car sold in 2003 to the second owner but no mileage disclosed on the title and to this day, it’s listed as exempt even on my title so from that, I was able to deduce the truck’s overall wear evidence and concluded that the odo’s reading was, indeed 188K back in 2006 (about right age wise) as the 1992 Ford ranger didn’t have the 100,000th mile digit as did many Fords of the day didn’t to begin with.

      It’s been a great truck for my needs for the past 5.5 years and now has 234K on it.

  • avatar
    slance66

    For private sales this makes perfect sense. But what about dealer sales? Often they won’t have the repair history. If serviced at a dealer, you can sometimes find the history on the dealer website by submiting the VIN. But indi repairs don’t show up at all. Many of these cars are off-lease and the variation in how their owners treated them is significant.

  • avatar
    willamettejd

    Anyone have a good site or resource that lists the highest-depreciating cars?

    My sweet spot is to find a car listed as very reliable by TrueDelta and CR that has suffered extreme depreciation compared to its competitors. They are hard to find, but can be found. In 2005 my wife and I bought a 1999 Mazda Millenia with 65K for $6400 (retailed for about $32K I believe)…..and listed as one of CRs top most reliable cars.

    I still don’t know why we sold that beauty, especially considering what prices the used market is trying to demand these days…..

    • 0 avatar
      evan

      Normally I’d be weary of targeting models of cars that have the highest depreciation in their segment; it seems there’s some good reasons for that loss of value, but I guess you’ve found some exceptions to the rule. That’s some smart shoping.

      http://www.edmunds.com seems to run ‘best and worst’ depreciation schedules for cars occassionaly…. search with ‘depreciation’ or ‘residual’ and see what you come up with.

      • 0 avatar
        willamettejd

        Indeed, very difficult to find….has to be because of a lack of brand cachet or a very reliable model amidst a sea of unreliables in a particular brand. The Millenia, for example, was supposed to be Lexus competitor, but no one bought that, they produced very few, and it depreciated like crazy because of it.

      • 0 avatar
        CJinSD

        A friend of mine picked up a lightly used Mazda 6 4-cylinder automatic for about 65% of the price of comparable models during the 4 cylinder car crunch of 2008. It has been pretty good for her, but another friend bought a Mazda 3 around the same time that has been a horrible car to own. Constant CEL issues and a full engine rebuild at 80K miles doesn’t make for a good deal at any price.

        Generally, cars popular with fleets will be cheaper on the used market than cars that aren’t popular with fleets, but fleets also tend to buy cars that are discounted because of soft retail demand in the first place.

  • avatar
    ajla

    even a “buy here / pay here” lot might stock a great vehicle or two (credit the law of averages).

    There is a BHPH lot near where I live that constantly taunts me. They have had in the past two years: an AMC Spirit I6, a Pontiac Ventura (with a genuine Pontiac 350), a HPP Grand Marquis, and a Plymouth Turismo. He’ll probably have a first-gen Seville before too long.

    Why a BHPH lot has these kind of cars is beyond me, but the prices he wants for them are absolutely crazy.

    I’m sure he’ll get my money eventually.

  • avatar
    Lorenzo

    I have to second the advice to stay away from impound yards. A golfing buddy bought a ’96 Eagle Vision TSi for about $800 below low book from an INS impound yard near the San Diego/Tijuana border. On his way home he was pulled over for failing to signal a turn – he’d signaled but it wasn’t working. The police found 20 lbs of marijuana in the trunk, but fortunately, he was only 4 miles from the lot and could prove he’d just gotten the car. The INS was embarrassed, but unapologetic. The turn signal was just the beginning of electric gremlins that cost my buddy over $1500 in repairs and left him stranded several times. He finally gave up when it flunked emissions and traded it in.

  • avatar
    Prado

    I have not found Ebay to be a reliable source for pricing. The completed sales volume on any make/model year combination is way to small. Throw in miles, trim level/equipment, and location, and you will rarely find a comp. Also, the sold prices often reflect that this is a liquidation sale, meaning the seller was not able to find a buyer through traditional methods. Much more likely to be a lemon than a creampuff, and this higher risk is a part of the lower price.

  • avatar
    JMII

    Just another person to echo that CarFax does not tell all. My brother had his Passat smashed up pretty good in the rear, took two weeks at the body shop to get trunk back in shape. He sold the car private party and pulled a CarFax just to see what info buyers could dig up. Under accidents it said: none.

    The ownership info off CarMax is good, also which states the car has been registered in is helpful if you fear road salt (rust). For example when we bought our used Volvo C30 we were able to quickly determine that it never left our county. One owner, leased, with all service done at only two local dealerships. In fact the car is still under the factory warranty for the next four months so it was a reasonable safe purchase.

  • avatar
    DenverMike

    Absolutely, take it to a mechanic. A good one will look for things you could never imagine. Run it up to speed on the lift and over the road including a stress test or two.

    Went on a used car test drive with a buddy and told him to put it in 5th at 20 MPH and stand on the gas just to see what it’d do. Engine went straight to redline as it needed a clutch. This was very well the reason it was for sale in the 1st place.

    I’ve been known run new cars/trucks with basic insurance coverage because I bought them outright. If I wreck one at my own doing and just half ass it back together, who’s gonna know? Carfax? Not unless I tell them.

  • avatar
    beefmalone

    My ebay seller bill is over $3k a month so trust me when I tell you that using them as a price guide is a complete waste of time. There are way too many trim/engine variables to take into account not to mention location, how well the auction was presented, etc. I can list the same motorhome 4 weeks in a row and the ending price can vary from $15k to $30k easily.

    • 0 avatar
      Steven Lang

      I believe folks should focus on the listings with a ‘green price’ and competitive bidding. Your statement is 100% correct and especially so when you’re buying RV’s and powersport related inventory.

  • avatar
    sco

    I bought my 2006 Scion Xb off a lot 2 years ago and what worked for me was finding the registration card of the previous owner in glove compartment. A quick look in the phone book and a quick call to the previous owner, who in this case had absolutely nothing to hid, told me all I needed to know. The car looked sketchy, high miles, two town paint but I found out that the previous owner loved the car, husband sold it because he broke his foot and couldn’t deal with the manual tranny and all the shifting, car was well maintained, all highway miles. When it came time to talk price i knew far more about the car than the dealer did, got a great deal ($7500!), love the car

  • avatar
    sco

    I bought my 2006 Scion Xb off a lot 2 years ago and what worked for me was finding the registration card of the previous owner in glove compartment. A quick look in the phone book and a quick call to the previous owner, who in this case had absolutely nothing to hid, told me all I needed to know. The car looked sketchy, high miles, two tone paint but I found out that the previous owner loved the car, husband sold it because he broke his foot and couldn’t deal with the manual tranny and all the shifting, car was well maintained, all highway miles, factory paint job. When it came time to talk price i knew far more about the car than the dealer did, got a great deal ($7500!), love the car

  • avatar
    Jaywalker

    IIRC, when CarFax lost a suit in 2006 (Wiki), they disclosed they were not getting data from 23 states, all the while claiming full coverage. I can’t know it AutoCheck is any better, but I know I’ll avoid CarFax ethics.

    Buy from an individual for sure, even with the first throw-away question, “Why are you selling the car?” It doesn’t matter what they answer, since you only use their words to move into other questions to get them talking; sometimes they say too much.

    Of the used cars I’ve bought recently, I stay with one-state cars, preferably my own, in order to try to avoid title washes. If I can stay with my own state, then people like me will still have a one-state car when I’m finished with it.

    All of the guidebooks (NADA, etc.) are bad info for a buyer and designed by the industry to be inflated so that when you buy from the dealer you’ll be paying top dollar. Consider an owner wanting to trade up – his car worth $10,000 on which there’s still $12,000 left to pay, and his target car at $20k. The dealer gives the owner $12k for the trade by raising the new car by $2k to $22k, possibly “Addition Dealer Markup,” or “Market Adjustment,” or whatever… Both transactions, the trade price and the newer car price, are reported to the publishers of the NADA, Blue Book, etc., as prices paid. There’s no wonder dealers are perfectly willing to work from “book” value so often – except for trade-in values. It’s the system they’ve built that keeps used prices high.


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