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KnowledgeBase

Tips for Buying and Selling Used Cars

Cars depreciate the moment you drive them off of the lot.  Buying a used car can be a rewarding experience or it can be a nightmare.  Here are a few tips to help improve the experience.

  1. See if Maintenance Records Exist.  Ask the seller if he has maintenance records for the vehicle.  Typically, a conscientious owner will keep records of maintenance throughout the life of the vehicle.  While this doesn't guarantee that the car is in perfect condition, it is a good indicator that the car has been cared for over it's lifetime as opposed to having just been gassed up and driven.

  2. Review the Vehicle's Maintenance Record.  Review the records, or ask the owner what kind of maintenance has been done to the car over it's lifetime.  Oil changes alone are not a sign of a good maintenance program.  Did you know that brake fluid needs to be flushed every two years regardless of mileage?  It's also good to know if the car has had any serious repairs like a new engine or transmission.

  3. Do a History Check.  Get a CarFax report on-line.  For a few dollars you can run a complete history check on the vehicle.  They can check for things such as: Title Check (salvaged, lemon, flooded, rebuilt), Odometer Check (fraud, rolled back, rolled over, broken), Problem Check (major accident, salvage auction, fire damage, stolen), and a registration check (leased, rental, taxi/police, fleet car).  There is also a free instant record check.

  4. Have the Vehicle Inspected.  Get the owner's permission to have your mechanic inspect the car for problems.  A competent mechanic should be able to do a thorough inspection in two hours.  Try to negotiate the price with the mechanic before starting the work.  If you don't know a reliable mechanic, check with the local AAA office.  Also, remember that you'll need to have the car inspected in order to have it registered in the state of Maryland.  If the seller has not already done so, you may be able to split the cost of the inspection with him.  Remember, the state inspection may not reveal mechanical problems that a complete inspection by a private mechanic would, i.e. imminent engine failure.

  5. Research the Vehicle's Value.  If you've decided that the vehicle is worthy of being purchased, go on-line to check for prices.  We recommend that you use at least two different services.  If you visit the Yahoo Used Car Guide you can check prices using both Kelley Blue Book and Edmunds True Market Value pricing.  We personally feel that Edmunds offers a better estimate of the vehicle's true market value.  Be sure to enter all the specifics about the car you want to buy including details like the color and your zip code since they all can affect the value of the vehicle.  They typically list three prices - the price a dealer will pay you on trade-in, the price you can expect to pay a private party and the price a dealer will charge to sell you the vehicle.  Be careful, many private parties will ask for the dealer price.  Unless they're going to repair all the problems beforehand and offer you a 30 day warranty like a dealer would, they're asking too much.

  6. Negotiate the Price.  If you've done all of your research, you now know what shape the vehicle is in and what the estimated value is.  If you had the vehicle inspected by a mechanic and he gave you an estimate to make the repairs, try deducting that cost from the dealer's price or even the private party price.  Keep in mind that the amount of effort that you put into researching the value of the car and it's condition is probably relative to the vehicle's value.  Doing a history check on a $500 beater may not make sense.  Also, you can't expect the seller to jump through hoops when he is selling a $1000 commuter car at the rock bottom price.

  7. Seller Tips.  If you are the seller and you have made a deal with the buyer, insist on a cashier or certified check from a local bank for payment.  If you accept cash, make sure you know how to detect counterfeit bills.  If you accept them, you eat them not to mention the time you have to spend assisting the authorities in their investigation.  Finally, we suggest writing up a simple bill of sale that states the selling price, the terms of payment, whether or not the sale is final and a time period for the buyer to remove the vehicle from your property.  If the buyer asks you to falsify the sales price so he can save on the registration tax, don't do it!  If the buyer negotiates a price and then tries to negotiate payments instead of total payment, think twice!  You may end up with a buyer who can't make the payments leaving you back at the starting line.




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