Buying a used car is a gamble, but it is one you can stack in your favor. New cars lose a big share of their value in the first few years, so a well-chosen used car can save thousands. A badly chosen one can cost more in repairs than it saved. Here is how to tell the difference.
1. Decide the budget, including the repairs
Set a total, not just a sticker price. Leave room for taxes, registration, insurance and a reserve for repairs. For cheap older cars, the repair reserve matters most: if a major repair would cost more than the car is worth, you need to be able to walk away and start over.
2. Check the history
Get the vehicle identification number (VIN) and run it through a history report. The federal National Motor Vehicle Title Information System (NMVTIS) lists approved providers that can flag salvage, flood or junk titles. Commercial reports such as Carfax and AutoCheck add accident and service records. Also check the VIN at NHTSA’s recall site for any unrepaired safety recalls.
3. Read the window sticker
Dealers in the U.S. must post the Federal Trade Commission’s Buyers Guide on used cars. It tells you whether the car comes with a warranty or is sold “as is.” “As is” means repairs after the sale are your problem.
4. Pay for an inspection
Before you buy, have an independent mechanic you choose inspect the car. It usually costs a modest fee and is the best money you will spend. A seller who will not allow an inspection is telling you something.
5. Be suspicious of a too-shiny bargain
A car that looks perfect and is priced far below similar models deserves extra questions. Cosmetic work can hide problems. Sometimes the scruffy car from an owner who kept every receipt is the safer bet.
Buying from family
Buying from a relative can mean a fair price and an honest history. The catch is that if something goes wrong, it goes wrong at Thanksgiving too. Put the price and condition in writing, even if it feels awkward.
Sources: FTC Used Motor Vehicle Trade Regulation Rule, 16 CFR Part 455; National Motor Vehicle Title Information System, U.S. Department of Justice; Recalls, NHTSA.
