How to Find a Good Used Car

The key to finding a good used car is being able to predict its future performance -- and the best way to do that is to know how the car was treated and what problems it had in the past. That's why a trusted friend can be the best source for a used car. Among other things, you'll get an honest answer to the question, "Why are you selling it?"

Your chances of finding a good used car depend on where you look. There are five main sources: new car dealers, used car dealers, rental car companies, private sellers and used car superstores.

New Car Dealers

Buying a used car from a new car dealer means that you will probably pay more for it. However, many dealers keep only the best cars for resale and generally have a wide selection, especially of the higher priced models. In addition, most new car dealers will give you a written warranty. But beware: These warranties are usually full of loopholes in the dealer's favor.

Another benefit of buying from new car dealers is that most have service facilities. This increases the chance that the car was inspected and repaired before being offered for sale. However, these repairs are only as good as your warranty, so make sure you get the warranty in writing. If you trust the dealership and know that it has serviced the car regularly, then a new car dealer can be a good source for a reliable car.

Tip: Used cars of the same brand as the new cars that the dealer sells are your best bets. Dealers can't get parts as easily and as inexpensively for cars from other manufacturers, and they are less likely to make repairs before reselling the car.

Used Car Dealers

You can usually get lower prices on an independent used car lot than from a new car dealer. However, the majority of cars are sold in "as is" condition. Even if a used car dealer offers a warranty, it's often extremely difficult to get repair costs covered.

Another problem with buying from used car dealers is that they often get cast-offs, either from new car dealers or at auctions. In fact, they rarely know the history of the cars they're selling. Also, most used car dealerships do not have service facilities, so they have done little, if any, work on the cars. Many times used car dealers sell cars from lease fleets, taxi companies, or police departments -- cars that have excessive wear.

Tip: The longer a dealer has been in the same location, the better your chances are of getting help should a problem arise. Because used car dealerships tend to be transient, it's best to find one that has been in business for at least five years at the same location.

Rental Car Companies

During the past few years, rental car companies have been reselling vehicles from their rental fleets to consumers. Contrary to popular belief, cars sold by the rental car companies haven't necessarily been "driven into the ground" by careless renters. For the most part, these cars are used by business people who simply drive from the airport to a meeting and then back again, or by renters who use the cars on longer trips.

Many rental companies have facilities that resemble new car dealerships. They generally offer late models (12 to 18 months old) that have high mileage (an average of 23,000 miles). There are advantages to buying from a rental car company:

• You have access to the maintenance history of the car.
• Problem cars are not sold through the dealerships. (They go to auctions and probably show up on independent used car lots.)
• The cars have had regular maintenance work.
• There is generally a good selection.
• You don't negotiate the price.

On the other hand, buying from a rental car company means buying a late model car with high mileage. Also, these cars tend to be loaded with options, which add to the overall price. (In general, prices at rental car companies tend to be slightly higher than a private seller's prices.)

Tip: To get a good deal from a rental car company, have a good idea of the fair market value of the car, and have the car checked by an independent mechanic.

One of the best and most common ways to buy a used car is from a private owner. The owner will often accept less than the car's retail value, because he or she doesn't have the overhead and expenses of a dealer. Also, buying from someone you know is the best way to get honest information about how well that car was cared for. On the other hand, buying a car from a private source usually requires a lot of running around in order to compare cars.

On a private sale, you should always call the seller before going to see the car. Asking the right questions over the phone can avoid some wasted trips.

One problem with buying through private sellers is determining whether the seller is truly an independent individual selling a single car, or is actually a pro masquerading as a private seller. Don't be afraid to use your intuition, and if you're in doubt, ask to see the title of the car. If the name on the title doesn't match the name of the seller, ask questions.

Tip: If you know someone who regularly trades in a car that they've taken good care of, contact them and ask if they'd be willing to sell it to you rather than trade it in. They can usually get more by selling it to you than the wholesale price offered on the trade-in. And you will often pay less than the retail price that the dealer would charge.

Superstores

A new way of buying a used car avoids the hassles of negotiating the price with traditional dealers and private sellers. Over 20 superstores will be opening their doors nationwide. What is their appeal? They offer "no-haggle" pricing, an enormous selection, and sales people who aren't on commission. At a superstore, your first stop will generally be a computer terminal where a sales person will guide you through selecting a car based on your price range and desired features. The computer will identify the vehicles on the lot which meet your needs and tell you where they are located.

Tip: Be sure to go on a clear day and allow yourself an afternoon's worth of time to peruse the numerous choices. Expect to pay prices at or close to blue book retail, which means you may be paying slightly more - but benefits like a decent warranty, one-stop shopping and "no-haggle" pricing are probably worth it.

from The Car Book 1998 by Jack Gillis