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What to Know When Buying a Used Car

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author photo by Joe Tralongo October 2011

So you're looking to buy a used car - an admirable idea, especially if it's a late-model, low-mileage car that still has its factory warranty. It's a great way to save money, for sure. But what if you're looking for something a bit less expensive, maybe four or five years old, that's still reliable and will outlast the loan payments? Then you have a bit of a challenge because, unlike when buying a new or certified pre-owned car, you have no recourse if something goes wrong. While it's true that the used car landscape is full of first-time buyer pitfalls, here are some guidelines you can use to help navigate around these land mines and get the best deal.

Finding the Right Car

Before you set out to find the used vehicle of your dreams, take time to do your homework. First, be sure the car you're shopping for is the car you need, not just the car you want. In other words, don't allow your emotions to get the best of you. While a hot red Corvette might seem like an awesome ride, the rest of the family might see it differently.

Once you've decided on the type of vehicle you need (SUV, sedan, wagon or economy car), calculate what you can afford, remembering to include monthly totals for gas, insurance and maintenance. Visit websites like or Kelley Blue Book (, where you can read what owners of similar models have to say about your future car.

Also, check out's used car reviews to see if we've reviewed it. You can read up on the vehicle's safety ratings and view its recall history at, the National Highway Traffic Safety Administration's (NHTSA) crash test and recall history website. Using a free Recall Check from is another good way to research your next used car purchase. Finally, you can use sites like to more accurately predict the cost of your next car based on year, mileage, trim level and options.

What to Look For

Once you find the right car, the best thing to do is to have a trusted mechanic check it out. If the seller objects, it might be a good idea to walk away. If you don't have a mechanic close by, here are some things you can do to check the condition of the car.

  • Place a magnet on various metal car parts. If the magnet won't attach to, say, a front fender, there's a good chance it's because filler was used in a repair, and that might indicate the vehicle was in an accident. As some cars use plastic fenders and hoods to save weight, this trick won't always be 100 percent accurate. If the magnet won't stay in place on any part of the fender or hood, that's a good indication that the parts are not metal and the vehicle is fine. Repairs usually only cover a partial area, so if your magnet sticks to the front of the car's fender but not the part closest to the door, then it's likely a repair job.
  • Check the fluids. A car's oil, coolant and transmission fluid can tell you volumes about its condition. Look at the oil. Is it golden yellow and clear, or black as night? The latter indicates an engine that's probably burning oil or that hasn't been properly maintained with regular oil changes. Water droplets in the oil indicate a problem with the head gasket (a seal the separates the engine's coolant from the oil). Likewise, black oil droplets in the coolant overflow reservoir indicate that oil and water are co-mingling inside the engine, a sign of a costly repair just around the corner.
  • Look for overspray. When a car is repainted, some of the aerosolized particles inevitably make their way to other areas such as the engine bay, trunk and inside the doorjambs. Now's your chance to play automotive CSI. Bring a flashlight and look closely. Finding overspray on areas that aren't supposed to be painted is a telltale sign of a quick and sloppy repair.
  • Get dirty. If you're adventurous enough, crawling underneath the car can reveal all manner of useful information. Looking beneath the engine can reveal fresh oil leaks. On front-wheel-drive cars, you can inspect the condition of the CV boots. These are the cone-shaped rubber coverings at the point where the axle attaches to the wheel. If the boots are torn or missing, this means the CV joints so crucial to the car's operation have likely dried out or are contaminated with dirt. Moving around to the rear of the car tells another story, and it's not a place most people think to check. If you can easily spot the fuel tank, reach your hand up on top and feel around. When you pull your hand down, if it's filled with debris, you might have grounds for suspicion. This could indicate a car that's had flood damage.

Of course, if you're not interested in playing car sleuth, you can discover much of what you need to know about your future previously owned ride by obtaining a vehicle history report through a service such as CARFAX. For a small fee, CARFAX will research the VIN (Vehicle Identification Number) and return a report that can reveal the vehicle's accident history, number of previous owners, the mileage each owner accumulated, any damage done to the vehicle, service history and whether the warranty is still in effect. CARFAX can also show how reported history affects the vehicle's retail value. For example, cars with low mileage often sell for more than retail value, while cars with evidence of damage will often sell for less.

Where to Buy

While there are still some places trapped in the old way of selling cars, there are a growing number of used car dealers who will treat you fairly, help you find the right vehicle for your needs, and even place a limited warranty on the vehicle at no extra charge (usually something like 30 days or 1,000 miles). You can shop the big-box used car lots such as CarMax, or some of the bigger new car dealerships that carry a large inventory of used vehicles, as well.

The advantage of choosing a dealer over a private party is two-fold. First, you can test-drive the car and compare it to similar models. Secondly, a dealer can help you with financing. On the downside, you won't necessarily know much about the car or its previous owners. You'll also probably end up paying more when buying from a dealer because he has to recoup his costs plus make some profit along the way.

Buying from a private seller also has it pros and cons. Depending on your negotiating skills, you can save a bundle on the final price, and you might be able to get the entire repair history to boot, especially if the person selling the car is honest and up front. Here again, you should not rely solely on your emotions. Many people feel they are excellent judges of character and can tell a scam artist from an honest broker. You may feel reassured because you've just bought your car from a kindly old man in a cardigan sweater who lives in a nice, upscale neighborhood. You liked him so much, you didn't even argue about the price or ask about the car's problems. You just know people, and he seemed liked one of the good ones. What could go wrong?

Just remember that seeming like a nice person is what makes a lot of scammers really good at what they do. It's important to remember that when buying from a private party, use the same common sense you would with a dealer. Get the VIN, run a CARFAX Report, and then, if everything checks out, come back the next day and negotiate your deal.

On a final note, remember to be patient. Between ten and twelve million cars are sold each year. Odds are, the car you want will still be around tomorrow. There are plenty of fish in the sea and plenty of whatever model you're looking for. So take your time, compare models, do your homework and drive home confident that you've made the best deal.

CARFAX helped with the creation of this article.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
What to Know When Buying a Used Car - Autotrader