Buying A Used Vehicle in the Internet Age, Part III

So…you’ve found a good prospect, you don’t have to travel five states away to look at it, the VIN check you ran looks good—no crashes, no being passed from owner to owner, maintenance done looks reasonable, no bizarre mileage history, etc.—so it’s time to go look at the car.  (Ladies, one word of warning; be reasonably cautious.  Don’t go look at cars at night and be careful about getting into a car with a stranger; most legitimate dealers and sellers have no objection to you test driving a car on your own.)

You’re going to need to check a lot of things on any car you look at. Any dings, dents, evidence of body work? Do all the windows and doors open, does the heater and A/C work—oh, heck, take a list. Here’s a pretty good one:

http://classiccars.about.com/od/buyingadvise/ht/inspection.htm

I used this as a basis for my own list, with a place for “Yes/No” answers and check marks. Make a bunch of copies; you’ll need ‘em. 

Second, get on the computer again and check any prospect for recalls. That doesn’t always show up on Autocheck.  Note any on your inspection list so you can ask the seller for proof that the work was done.

Third, prepare yourself to resist the sales pitch. Remember, it’s your money on the line here.  The sales pitch can come from both dealers and private sellers. (Who are sometimes dealers who just work out of their homes.)  Your job is to be polite, but firm. There are honest sellers out there, and, sadly, there are some who will tell you anything to get you to buy the car.

Like the folks who told me over the phone that their Dodge 1500 was in “excellent condition”—and when I pointed out that the truck bed was both rusted and warped, indicating a back end collision, told me they’d meant that the engine was in excellent condition.

Or one non-dealer dealer. “I’m not a dealer, I only sell a few cars a month!”  As part of my standard road test, I always found a safe place to, at a slow speed,  punch fairly hard on the accelerator. A vehicle with a good automatic  transmission should downshift and take off almost instantly. This truck just revved. When I told him this, he swore he’d driven it twenty miles that morning and “It drove just fine.” 

Or the guy who, when I pointed out that everything underneath his truck was corroded, said, “Every vehicle shows a little corrosion.” (I took pictures and showed them to my mechanic. His comment? “Looks like it’s been underwater for a month.”)

Or the person who, when I pointed out the green-yellow fluid dripping from the engine, said “Well, every car drips a little coolant.”

Or the salesman at the huge dealership who told me that it was my “lucky” day when I pointed out that the online price of a truck seemed quite a bit low. Yep, low. There was no picture on the online ad; the truck itself, when I was shown it, was being “touched up” by a paint crew. “It’s a mistake on the ad!” said the salesman. “The price should  be $12,000, but we’ll give it to you for the $7,900 in the ad!”

I said I’d think about it. I went home and rechecked the ad. There was now a picture of the newly retouched truck (without any mention of the repairs) but the price still read $7,900. IMHO, this was a vehicle that had gotten in a fender-bender—or worse—and they were trying to get rid of it quick.

To properly inspect a car takes time. I suggest you show the owner your inspection list and tell them you need about a half-hour. With any luck, they’ll leave you alone. Some will insist on hovering, but don't let them rush you.

Then inspect the car. Thoroughly. Remember, anything you miss, you’ll end up paying your mechanic to find.  Wear clothes that let you bend, kneel and even lie down on the pavement. (A security guard at one dealership found me on the ground looking underneath a car and thought I’d keeled over from the heat.) Bring some hand wipes, because you will get your hands dirty. 

Don’t be fooled either, by mere cleanliness. It’s easy to steam clean a filthy engine, scrub up a stained interior and paint over rust and corrosion. Look beneath the seats, behind the seats.  Run your fingers inside the seams between doors, in the wheel wells, anywhere you can reach, to check for the roughness left by painting tape.

On the test drive, be just as thorough. Drive the vehicle at appropriate speeds in all the gears, including Reverse.  Find a large empty parking lot and turn it in fairly tight circles. Find an empty road, accelerate hard, brake hard. Go out on the freeway and get it up to the speed limit.  Check and recheck the gauges as you do this. 

Everything should work smoothly. Strange noises, hesitations, indications of strain, rattles, creaks, smoke, overheating, warning lights coming on….you want to make sure you give the vehicle a chance to reveal these problems. Don’t abuse any vehicle…it is, after all, not yours…but don’t drive it two miles and back on a  level road and decide it’s fine.

Finally, check the title. Make sure it matches both the vehicle's description and VIN. Most of all, make sure the title is in the seller's name. Because it’s astounding how many people, innocently or not, will try to sell a car they don’t legally own.

(A good idea before you look at your first prospect, is to stop by an office of your state Department of Motor Vehicles. Ask them about your state’s requirements for titling and tax payments. Ask them what the tax rate is on used cars. Ask to see a dealer's license; in most states, only licensed dealers can sell cars without first transferring the title to their name.)

A bill of sale and physical possession of a car doesn't mean that someone legally owns it. Unless it's being sold by a legitimately licensed dealer, a vehicle must be registered in that owners name, on the title.

Sometimes, people honestly don't know this. (Sometimes they do and they don't care.) There was one  young man I called, with a Dodge 1500 for sale, who’d rarely driven it, since he was a long-distance truck driver. He had the title certificate he’d been given when he bought it—“They signed it over to me”—but he’d never registered it in his name, because he didn’t have the money to pay the sales tax.

I asked him how long he’d had the truck. “Two years. It’s been sitting in the garage mostly. That's why I want to sell it.” He was genuinely shocked when I told  him that legally, he didn’t own the car and therefore, legally, couldn’t sell the car….and that since there’s a $25 per month fee for any delay in registering a vehicle with the state, he now not only owed the sales tax, he owed an additional $600. 

He didn’t have $1,200 to transfer the title and pay the fine. Killed that deal. 

So…..you’ve found a vehicle that you like. It looks good, you’ve gone through your checklist, it drives fine, the title looks legit. (Make a copy and take it to the DMV if you're not sure.) Call your mechanic.  Since most good mechanics are busy, have the number of a back-up mechanic in case yours can’t look at the vehicle immediately.  If the vehicle passes your mechanic’s inspection, you make the “buy or pass” decision then.

Hopefully, you’ve saved up enough money to buy for cash or with a small loan and avoid financing charges. Do be aware though, that dealers will often charge various fees that can kick a final price up a few hundred dollars, so allow for that and also allow for the state sales tax. 

Be patient, be savvy and don’t let anyone pressure you into a deal. There's always another good prospect just down the road. Good luck!

Buying a Used Vehicle in the Internet Age, Part II

At the end of Part I, I made the statement that when you’re searching for a used car or truck, your job is not to approve vehicles, it’s to eliminate them.

Why? Because most used cars come with little or no warranty. So before buying one, you need to have it inspected by a competent mechanic.  Such a check won’t guarantee a car that’s perfect, but it could reveal problems that you, as a layman, might not catch. But such inspections can cost $50-$150. You need to weed out any obvious “lemons” long before you reach that point or you'll quickly go broke paying inspection fees.

So….where do you find used vehicles and how do you eliminate the lemons?

One thing you need is a source of prospects that’s local.  It used to be that your town newspaper was the main place to go, but although you’ll still find ads there, the number has dropped considerably. So take a look at the internet.

Start with Craigslist.com. Since you can specify the locale you want to search, you can hunt for vehicles within a reasonably driving range. You can also specify the make, model and year you’re interested in, plus a price range.

First, though, check Craigslist’s information on avoiding scams. Believe me, a lot of scammers are out there. 

When I first started looking for “Mike” I ran into quite a few. There was, for example, the person who needed to sell their truck immediately--at a very cheap price--because they were being shipped out to Iraq. Interestingly, I found an ad for the exact same make, model and year of truck that had been posted a day earlier,  featuring the exact same language, except this time the owner was going to Dubai.  In both cases, the owner offered to “ship the vehicle from Dallas to the buyer’s location.” Since I was searching the Dallas/Fort Worth Craigslist, I couldn’t help but wonder why the vehicle needed to be “shipped" at all.

Of course, chances are that there is no such vehicle and this ad is being run on Craigslist all over the country, to lure buyers into sending money to the scammer. This is why Craigslist specifies that all offers to ship cars are fraudulent. 

In fact, you should never buy a used car you haven’t seen and driven. I don’t care how pretty the picture is, I don’t care how cheap the price is, I don’t care what kind of a “Must sell!” sob story the seller pitches you. Never buy a car you haven’t seen and driven. And had checked by your mechanic.

Another good source for ads is Autotrader.com. There, you specify make, model, a range of model years and a price range. You can also specify the maximum distance to the car or the zip code you want Autotrader to search.

Edmonds.com will let you specify a make and model, then tell you how many cars it has listed, broken down by model year.

So….you look, you see the kind of car you want, within your price range and close enough so that it won’t take a major road trip to reach it. Now it’s time to go check it out, right?

Wrong. First, run a report on the VIN.

VIN stands for Vehicle Identification Number. Each vehicle has its own individual VIN. You can find it near the lower part of the windshield on the driver’s side, either on a metal plate on the dashboard or etched into the windshield itself. 

Why check the VIN? Because it’s the second way to recognize a lemon, without spending the time or gas money to actually go see the car. 

Take the VIN and run it on AutoCheck. AutoCheck and CARFAX both sell reports that provide a lot—but not all—information about a vehicle’s history. How many owners has it had? How many repairs?  Has it been in a wreck? Was it a fleet or lease vehicle? Has any problem been reported with the title?

Why do I recommend AutoCheck over CARFAX? In a word, price. AutoCheck will give you a month’s worth of unlimited vehicle reports for about $45.  For the same price, CARFAX only gives you five reports. I found that I often wanted to check more than five VINS in a single hour’s worth of online searching. (BTW, if an ad doesn’t list the VIN, email or call the seller and ask for it. If they won’t provide it, cross that vehicle off your list.)

You do need to actually read these reports. Sometimes a dealer will provide one --“Look! Free VIN report with every car!”--and you’ll be tempted to just glance at it or not bother reading it at all. After all, if they’re willing to let you see it, it must be fine, right? 

Wrong. Read the report. Carefully. I was given one report by a used car dealer that showed a lot of parts replaced in the first few years of the vehicle’s life. A lot of parts. The dealer tried to convince me this was good, that “all those parts are now new.” But what kind of car needs a dozen major components replaced within the first 20,000 miles? In a word, a lemon. A vehicle either badly built or badly maintained. It’s entirely possible to ruin a new car or truck quite quickly. Run it too hard or too hot. Never replace the coolant, transmission fluid or the oil.  Make it tow weights or carry loads it wasn’t designed to handle. Result? A mechanic’s dream...and a buyer’s nightmare

.  

For that reason, AutoCheck is again, only a tool to eliminate vehicles from your search, not guarantee that they’re okay. So if the Autocheck report looks good, it’s on to the next step….go look at the vehicle. We’ll talk about that in Part III.

Buying A Used Vehicle In The Internet Age

Meet my recently-purchased "newer" vehicle, Mike, a 2006 Ford F-150.

My old van, Quartermain, hit the 275,000 miles mark late last year and I decided that it was time for something newer. He was still running reasonably well, but getting to the point where he'd soon be due for major mechanical work, and it made no sense to put thousands of dollars into a vehicle that had a market worth of less than $1000. Plus, I needed a truck.

I've always bought used vehicles, starting with my first $1,000 Datsun when I was 15.  But I'd had Quart for more than ten years and when I decided to start shopping, I found that the internet has brought a lot of changes to this particular chore, making things easier for buyers, sellers and, unfortunately, scammers. 

Well, it took some time and effort to find Mike, and I had to learn a lot. I thought I'd pass on what I already knew about buying a used vehicle, plus what I learned about car shopping on the internet.

First of all, why buy used?

In a word, money. 

A new car can lose 20-30% of its value the second you drive it off the dealer's lot. It's just the nature of the beast. A car a few years old with less than a 100,000 miles on it can easily be half the price of a comparable new car.

For example, Mike, before taxes and title, cost $8,900. A comparable new F-150 in my zip code costs $18,000 plus. Mike was four years old and had 70k miles on him when I made the deal. Because I bought him used, with, as my mechanic put it, just enough miles on him to be fully broken in, I saved $9,000+. Add in the fact that I was able to pay cash, avoiding interest on financing, and the savings are probably $10,000 plus.

Or to put it another way, I was able to afford a much better vehicle because I bought one used. Indeed, I was able to buy the vehicle I really needed, with some of the features I wanted as well,  because I bought used. 

Unless you've got enough money to buy whatever you want--in which case, why are you reading this blog?--the first job when buying any vehicle, new or used, it to decide what you can afford to pay and how much that will get you in terms of what you want and what you need. 

Sit down and figure it out. What do you need? How many passengers do you need to carry? Do you need a car that doesn't use much gas? Do you need a vehicle that can tow? Or carry cargo?  If so, how much?

Then list what you want. A/C? (In my part of Texas, that's a need.) Power door locks, windows, mirrors? Cloth seats? A GPS system? A lot of power? A certain paint color? A fancy sound system?

When you buy used, you often have to make compromises. That's just part of the deal. What you're willing to be flexible on is up to you.

In my case, I needed a truck, so I could carry round bales of hay, and it needed to be able to tow at least 5000 lbs. My small trailer, loaded with a full-sized horse, weighs 2500 lbs, but you never tow at the maximum, so I wanted double that capacity.  I didn't need power anything, other than steering and brakes, I could care less about a GPS or sound system and a three-passenger bench seat was fine. I didn't want to pay for more power than I needed, so a F 150,  Dodge 1500, Chevy Silverado or GMC Sierra would work, though smaller trucks like  an S-10 or Ranger might be a little underpowered.

I wanted a truck that was a nice color--green, burgundy, blue--that had a tow package, so I wouldn't have to buy one, and that had no more than 90,000 miles on it.  I also wanted some room behind the seat, so I could stow everything from groceries to pony harness.

Having made those two lists--needs and wants--you now need to get some idea of what all that will cost.


A good place to start is with Blue Book, www.bluebook.com.  This is the online version of the venerable price guide for both new and used cars. You can enter a type of vehicle--sedan, truck, van, mini van--or a specific car model and year, mileage and your zip code, plus a whole list of options and it will provide you with three possible prices. The first is the Trade In value of  the car you have in mind; in other words, how much you'd get for such a vehicle if you traded it in for a new car. The second is the Private Party price, or how much you might expect to pay for this model if you brought it from an owner. The third is the Retail or Dealer price or how much it's going to cost you to drive into a used car dealership and simply say "I want that."

This range will give you some idea of what you can afford, including what you might have to give up in the way of  "wants" to fit your budget.

Next, it's time to start shopping. But shopping for a good used vehicle is more a process of elimination than a matter of picking a winner. We'll talk about that in Part II.