How to Buy Yourself a Used Car

Know What You're Looking For

• Before you hand over your hard-earned cash to a big-toothed, salesman you might not entirely trust, you first must prepare. The infinite variables that accompany a used car purchase can make this even more difficult. On the preliminary list of "need-to-knows" are a used car's make, model, mileage and purpose.

  Makes and models: Choosing prospective makes and models of vehicles can be a tiring and frustrating process, but if you want a car that will last more than a month, there are some simple steps you can take to ensure your purchase will be a wise one. Look around you on the highways and parking lots. If you see a certain vehicle in abundance on the roads, it usually means the car has a good track record and it stays on the road longer.

  Do your own research. Hundreds of publications list the reliability of vehicles (both new and used). "Consumer Reports" tests the reliability of thousands of products every year, and automobiles are one of their specialties. Take a look at their guide to the most (and least) reliable used cars. "Consumer Reports" tests important things that you will be unable to do for yourself. For instance, it would be nearly impossible for you to know how many times per thousand miles an '86 Monte Carlo breaks down.

  Mileage: Obviously, a used car comes with some baggage. Number one on your list of things to be concerned about (before a test-drive) is your mileage preference. Sure, we would all prefer to have a car that is six months old and has 5,000 miles on it, but that's not going to happen. Set a reasonable goal for yourself regarding mileage and wear-and-tear on your prospective vehicle. Consider things like a factory warranty. A vehicle that is only a couple of years old and has 20,000 miles on it is likely to have a good bit of a factory warranty left. Also consider how many miles you're planning to stack on the car. If you're using the car as a backup, you don't need to be so concerned about mileage, but if you're planning to make it your primary mode of transportation, get a car with low mileage.

  Be wary of vehicles with frighteningly low mileage numbers. Salesmen have been known to turn back the mileage on vehicles to make them appear more attractive.

  Purpose: Finally, why do you need this car? If it's reliability you need, your decision is easy. If you need a reliable family car with dual airbags, seven cup holders and a four-speed automatic with maroon shag interior, it makes your search all the easier. Take into account your needs when you research models so you know what is standard fare on the vehicle in question. Unlike new cars, used cars can't be ordered to your preference. In some ways, you have to "luck out" to get the ideal vehicle. But keeping your eyes and ears open helps. Start your used-car search months before the vehicle need is critical so you can keep your options open (and possibly stumble upon a sweet deal).

Find a Place to Buy Your Used Car

• Where you buy the car will be a major factor in its quality, price and headache levels. There are four primary options: auction; private individual; used car dealer; or used car superstore.

  Government auctions sell repossessed cars to the lowest bidders. Or maybe you're buying the car on eBay. But before you purchase a car from an online autoseller, know the risks of auction purchasing:

  While you are likely to get a good price (since this is a market-driven sale), you can't be entirely sure what you are purchasing. You may have seen the ads for government repo sales where you can get a Porsche 911 for $300. That's usually a sucker line.

  Since these auctions involve repossessed cars, cars sold by dealerships and some privately sold vehicles, you still might get screwed over. True, these vehicles may appear in great shape, but unless you are a very knowledgeable auto mechanic, you may be purchasing someone else's damaged goods without knowing it. Auction cars may have been previously damaged in an accident, by floodwaters, or by owner abuse. Yes, they might be reconditioned, but the parts used are often substandard and the work less-than-perfectly.

  On top of all these caveats, it is usually difficult to get any sort of warranty on an auction-purchased car.

  Our advice: Forget about auctions. It's just too risky. But if you're determined, just look in the auto section of your newspaper under auctions. You'll find plenty.

  A second and more traditional method of purchasing a used car is through an individual. While there are several warnings to heed, many of them can be overcome through simple preparation. Private individual sales can be found in the newspaper, through used car advertising books and through word of mouth. The newspaper and advertisement route may be a more daunting option because you don't know the seller, but these sales also offer variety you can't find from friends and family.

  Private sellers offer an opportunity for both parties to save money. Individual sellers know they won't get everything that their cars are worth if they trade them in, and the buyer knows the negotiations will be less hectic. Also, with a private seller, a test-drive can be used to determine whether a vehicle is in proper condition and running order. You can have your mechanic check the car out before you buy it. So the overall benefit of a private individual is that you're dealing with a human being (not a company or a dealer) who probably wants to get rid of the car as much as you want it. To find a car using this method, just look in your newspaper, or do a search online of used car newsgroups. There are also websites where you can specify exactly what kind of used car you're looking for and get hooked up with a private seller.

  A used car dealer (or even a new car dealer) offers an option that can provide peace of mind for many buyers (as well as the thrill of the negotiation over a stale cup of coffee). It may appear that you are paying more through a dealer than you would be through a private individual or an auction. However, there are some good reasons for going to a dealer.

  A dealer-sold car is usually a well-inspected vehicle with at least some kind of limited warranty.

  If your vehicle turns out to be a lemon, you will be better protected, since the dealer is easy to locate and confront.

  Used car superstores offer pre-inspected, low-mileage, certified vehicles in a low-pressure situation. These stores often have a no-haggle approach to your purchase of a vehicle. This means no negotiating and sometimes a higher price. What you sacrifice in value is often made up for in assurances that you are making a wise purchase.

Learn Tricks to Save Money

• Once you have selected the type of vehicle you need (while leaving your options open) and you have chosen where to purchase the vehicle, take a few steps at the individual's house or the dealership.

  Know about how much the vehicle is worth before you look at the car. The Kelley Blue Book (or Blue Book for short) will help you assess the worth of any car in any condition. Their website is easy to use: just input the car's information, such as its mileage, features and wear, and a price will be generated. This is the price that you can expect to be charged by a retail outfit, but it is not necessarily the price you should be willing to pay. This is only a starting point and a guide to the possible value of a vehicle. But if anyone ever wants to charge you more than the Blue Book value, you can simply tell them what the Blue Book value is and make them prove that it's worth more. The seller will see that you've done your research and will be a lot warier of trying to trick you.

  Buying From a Private Individual

  Once you have selected a vehicle from an ad, visit the owner and inspect the vehicle. Begin any car-purchasing venture with the understanding that the car you get will not be perfect. Few vehicles, even new cars, are perfect. What you are trying to find is a vehicle that suits your needs, fits your budget and has never been used to dispose of a dead body.

  When you arrive at the residence of the seller, take notice of the appearance of the dwelling. Someone who takes meticulous care of a house and yard is more likely to take meticulous care of a car, changing the oil when necessary and maintaining the vehicle on time.

  Begin any encounter by being friendly. Creating a relationship with a prospective seller can help you down the line when it comes to negotiating a price.

  Inspect the vehicle carefully. You are not looking for scratches in the paint (there will be a few) or even small fender dings (they will be there also). Instead, look for serious wear and tear, like worn-down parts, broken parts or missing parts. Signs of serious wear and tear are more important than any small scratch.

  Be wary of any vehicle that has after-market work done. That low riding '82 Vanogan may look great, but will the work affect the reliability in the long run?

  After the preliminary inspection, it's time for the best part of the deal: the test drive. One rule of thumb for the test drive is that if a car breaks down while test-driving, you should not buy it. Beyond that, there are several other guidelines to follow.

  Be wary of any seller who will not permit you a test-drive.

  Take the vehicle on several different types of road surfaces.

  Test the pick-up of a vehicle on a highway.

  Find the bumpiest portion of road to test the suspension and overall comfort of the car.

  If you decide the vehicle is for you, ask the owner to see the maintenance records of the vehicle. If he cannot or will not produce this paperwork, forget this one. This is a warning sign that the vehicle may have trouble that the owner is trying to hide from you.

  If all this checks out, have the vehicle inspected by a private mechanic. This should cost $40 to $60, but it is a small price to pay to make sure you are getting your money's worth.

  Finally, the negotiation should be approached very carefully. Every private seller should expect to get less than they ask. Do not accept the first offer unless it is too good to be true (and in that case you want to be very careful). In the same respect, do not insult the seller. Offer a fair price below what they are asking and work from there, using your Blue Book number as a guideline. If your inspection of the vehicle has revealed some minor problems, use them as bargaining chips to lower the price even further.

  Buying From a Dealership

  If you are leaning toward making a purchase from a dealership, there are different (though just as numerous) factors to consider. There's a reason used car salespeople have bad reputations.

  There are positives and negatives about using a dealership. While you can expect to find vehicles with low mileage and in better shape, be prepared to ask several question and avoid several dealer "tricks."

  At a dealership, you can expect to encounter salespeople who have a high stake in ripping you off. We call these people "commissioned thieves." Though they are operating from a different frame of reference than a private seller, some of the same rules apply. A friendly rapport built between yourself and a salesman can assure that you will, in the end, get a more fair deal. Assume that every salesperson is out to get you, but also assume that some of them have a heart behind that shark-like personality. Also, if you go in there acting like a jerk, she will try to rip you off. A private seller gains his profit from the sale of a vehicle outright, while a commissioned salesperson makes a portion of the profit (the dealer's take) as well as money for added extras that you purchase. It is important to be prepared for these "extras" before you visit the dealer.

  Consider how you're going to pay for the car. If you need to use some kind of payment plan (as most people do), it is essential to try to obtain pre-approval on a loan before even setting foot on a showroom floor. The dealer will try to convince you that her financing plan is better than the bank's. However, unless the dealer is offering a special sale on car loans, a bank is more likely to provide a better loan on terms you can handle.

  After the same test-drive procedure described above, you may have finally found your dream car. It is now that you must prepare yourself for the most exciting and nerve-wracking part of the deal: the negotiation.

  It takes two to three hours to close a deal, it is essential that you show up 90 minutes before the store closes. The later you can get in the door and get dealing, the more likely you are to get a good deal. Car salespeople are human, and they get tired, too. At the end of a long day, they'll be more likely to not feel like haggling rather than when they are fresh in the morning. They want to go home.

  Never make the first offer. It might seem that it makes sense to walk right up to the dealer and tell her, "I am willing to pay $4,000 and not a penny more, I swear." The dealer may have been willing to give you a better deal, but now you have told him that he need not go lower. Second, if you are bluffing, you may find yourself out on the street without the car before you know what hit you.

  If you decide to take the dealer's financing or the dealer is assuming that you will (not passing on the financing immediately can sometimes help you get a better deal in the long-run), be aware of a second dealer trick. Never answer the question "Would you take the car tonight if I could get you a $250 monthly payment?" What she has not told you is that the loan is for 19 years at an APR of 456 percent. In the end, the most important thing is the total price of a car before financing. After that, factor in the financing to see if the deal is for you.

  Be wary of phrases like "What will it take to get you into this car today?" or "I'll have to check with my manager, I don't think we can go that low," or "it's a steal at this price." Chances are, the salesperson has said the same thing to about four dozen people already that day. Don't feel guilty about making her check with her manager (chances are, she won't even check) and don't let her language pressure you into making a purchase you don't feel right about. Remember that the salesperson is there to assist you, not the other way around.

  Other add-ons like car alarms, warranties, rust coating, in-dash microwaves and such can add up when it comes to the bottom line. Ask what each add-on does, and decide whether you want it. Sometimes the salesperson will tell you that "everybody gets this add-on." Your mother would be very disappointed in you if you fell for that lame argument. While most additional offers should be declined, a good warranty (especially if it comes through a major auto manufacturer) can be an added plus. Make sure you check the warranty terms, coverage, roadside assistance and other variables. After all of these decisions have been made, get ready to sign your life away.

  Read everything before signing. A typo could "conveniently" slip into the contract.

  Buying From a Superstore

  You can approach this option with slightly less anxiety than the other options. The test drive, inspection and choosing process are about the same. The difference is the negotiation. Usually, the salesperson does not operate on commission and the price on the window is the price you pay. It does not hurt to attempt to negotiate, but it usually won't do much good. Be wary of the add-ons just as you would at any other dealer, and make sure the car is for you.

Get Your Money Back on a Lemon

• So you're driving your used car out of the dealership lot, and the steering wheel breaks off, the hood pops open and blood pours out of the dashboard. You were suckered. You got a lemon. Is there anything you can do about it?

  Find out if the car has been reported as a lemon by someone before. Carfax.com will perform a free online check for you.

  When choosing your not-so-new vehicle, realize that as a consumer, you have rights. Make yourself aware of the "lemon laws" in your state (we'd list them, but they're incredibly diverse and changing constantly). In many areas, if your used car turns out to be a dud, you can take legal action to make sure that the dealer is held accountable. Lemon laws vary from state to state and the amount that you may be able to recover will differ. The website Lemon Aid lists specific laws regarding new and used car purchases for all 50 states and the District of Columbia.

  If you hope to recover anything, you need to have proof of what you agreed upon when purchasing the car. So document and get in writing every single detail you can think of, including the price, what the seller claims is new and used, and if possible, a guarantee for a refund if the car clunks out before a certain time.

  If all else fails, complain. They say the squeaky wheel gets the grease, so if you squeak enough, you just might get some attention from a used car dealer. Tell them you will go to the Better Business Bureau, tell them you will sue them, tell them you will give them a bad name, tell them that your Uncle Morty is a lawyer who will take them to the cleaners. Speak with friends, call the attorney general of your state, and threaten legal action. Many companies, when faced with lawsuits, rely on intimidation to keep them out of court. Don't allow yourself to be a victim. Make sure you know your rights as a consumer and that you get treated fairly.