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Buying Tips
How to Get a Used Car Bargain Part Two
Part Two: Locating and Test-Driving Your Target Cars
By Philip Reed, Senior Consumer Advice Editor and John DiPietro
Email
Edmunds Editors Philip Reed and John DiPietro recently
shopped for the best used family sedan they could buy in the $11,000 to $13,000
range. Their findings were the basis for this three-part series.
In the first
article, we told you how to identify good used cars that could be bought at
bargain prices. We also stressed the importance of arranging financing before
going to the dealership or buying from a private party.
In this section, we get to do the fun part of used car shopping: We will locate
several likely candidates. Then, we will test-drive and evaluate the mechanical
condition of these so-called "target cars."
Step 3: Locate Your Target Cars
Your goal is to locate three cars that seem to fit the criteria you are searching
for. Why three cars? If you have a number of cars to choose from, you are in a
stronger position when it comes time to bargain. If your top choice falls through,
you have a fallback position. You won't be emotionally tied to one car.
Your search should be conducted using a number of different sources:
- Online classified ads such as those on Edmunds.com and AutoTrader.com
- Daily newspaper classified ads
- Weekly shoppers and giveaway papers
- Listings on college and business bulletin boards
- Word of mouth -- ask all your friends if they know of any good used cars
for sale
The Internet is a powerful tool for finding a good used car. Once you have configured
the car you want through the Edmunds.com used car section, you can type in your
zip code and read a list of classified ads of cars for sale in your area. Many
of these ads are for cars on dealership lots. Or try using AutoTrader.com,
which brings you a mixture of dealer and private party ads.
Private Party Vs. Dealership
Buying a used car from a private party is a very different experience from purchasing
through a dealership or a used car lot. Many people are intimidated by the dealership
experience, fearing pushy salesmen and professional negotiators. But here are
several advantages offered by shopping for a used car at a new car dealership:
- A wide selection -- the dealership might have two or more cars you're considering
- Increased availability -- dealerships have hours that suit your schedule
- Financing -- if your credit is weak, a dealership might still finance your
loan
- Potential bargains -- private party prices are usually lower, but there
are still bargains on the lot, particularly at the end of the month
- Certified Used Cars - a dealership can sell you a certified used vehicle that has many of the same benefits as buying a new car
On the other hand, buying a used car from a private party offers these advantages:
- Low price -- a dealership marks up used cars to recoup its overhead
- Low-keyed negotiations -- you are dealing with an amateur, not a pro
- Accountability -- the previous owner usually has the car's service records
- Trustworthiness -- a private owner probably won't cover up mechanical problems
While the Internet has come of age and presents a lot of flexibility in searching
for a used car, you should still check the newspaper. John and Phil found that
there were cars listed in the newspaper that weren't found online. When shopping
for a used car, take advantage of every source in finding the right car for you.
In Phil's case, he extensively searched the online ads. Once he had built a list
of prospects, he called each source -- private party and dealership -- with a
list of questions.
Use the Phone to Prequalify Your Target Cars
There are a number of questions you should ask about each car before you take
the time to test-drive it. Some information may already be listed in the ads,
but it is important to verify the facts. You might consider creating a form for
yourself to keep track of the different cars you call about.
Below is the form that Phil and John used when shopping for a used car. You might
want to modify it for your target vehicle. But be sure to take careful notes,
because different cars blur together after a few days of shopping.
Used Car Question Sheet
There are many other questions that can be asked about the condition of a used
car. But some of these should be saved for the test drive, when you are really
serious about buying the car. The questions listed above are the basics.
Once you have found three cars that seem to match your needs, it's time to test-drive
them. Phil located a 2000 Mazda 626 with 24,000 miles on a Hertz Car Sales lot
that matched his requirements. It was being offered at $12,595. This is well below
the Edmunds.com True Market Value®, (TMV®) Dealer
Retail price of $13,391). He called and asked the above questions. It sounded
like what he was looking for, so he made an appointment to test-drive the car.
Step 4. Test-Driving a Used Car
If you test-drive a car, you are usually pretty serious about buying it. This
is well known in the new car buying process where veteran salespeople say, "The
feel of the wheel will seal the deal." In other words, if you drive the car, you'll
fall in love with it and buy it. But you should not become emotionally attached
to the car; your focus is on evaluating the vehicle.
Evaluating cars breaks into two main considerations:
- Do you like the car? It could be a good car, but maybe you don't
like the color, the interior or the options. It might not have enough legroom
or headroom. You might decide you don't like the styling. But once you've
decided you like the car, then you need to ask:
- Is the car in mechanically sound condition?
In other words, if you go to look at a used car and find you like it and want
to buy it, that's the easy part. Now you need to turn off your emotional side
and become technical. At this point, a lot of people might throw up their hands
in despair and say, "But I don't know anything about cars!" You can work around
this problem by exploring the following options.
Certified Used Cars
You might want to consider buying a certified used car that has been inspected
and is in good running order. Furthermore, if anything does go wrong with the
car within the period of the warranty, it will be fixed for free. This means that
if you are considering buying a certified used car, and it appears to be in good
condition, you don't have to do any further checking to make sure it will be reliable.
Certified used cars are usually found on new car lots. Take Volkswagen, for example.
Its certified used cars are subject to a 112-point inspection. VW then certifies
the car with a two-year/24,000-mile limited warranty that even includes a roadside
assistance program. At Edmunds, we bought a certified used 1999
Passat GLS. Four months later, it overheated. The repairs (not extensive)
were covered by the warranty.
While buying a certified used car removes a lot of the guesswork about the vehicle's
mechanical condition, you pay for this service. Certified used cars that sell
in the $10,000 to $20,000 range are estimated to be $500 to $1,000 more expensive.
So the real bargains actually fall into another class that we will talk about
next.
Used Cars Still Under Warranty
Most new cars are sold with a three-year/36,000-mile warranty. Therefore, if you
buy a car that is from one to three years old, it will still be under the factory
warranty. For example, if you buy a car that is one year old, with only 15,000
miles on it, you have two years and 21,000 miles remaining on the warranty. And
if there is anything wrong with the car when you bought it, the problem will be
fixed for free.
How can you use this to your advantage? Here's what John and Phil did. They drove
to the Hertz used car lot to see the 2000 Mazda 626. The salesman there let them
take the car for a test drive unescorted. They drove the car under a variety of
situations (a checklist is included below) then parked on a quiet side street.
They looked under the hood, poked and pried and inspected the car as thoroughly
as they could. It appeared to be well maintained and in excellent condition. Furthermore,
if anything were to go wrong, they knew the warranty would pay for their oversight.
Take the Car to a Mechanic
If you are serious about buying a used car and have doubts about its condition,
take it to a mechanic you trust. A private party will probably allow you to do
this without much resistance. And this option was offered to Phil at the Hertz
car lot. However, some new car dealerships may resist letting you take the car
off their lot. If it is a certified used car, there is no reason to take it to
a mechanic. If it is still under the new car warranty and it appears to be in
good condition, you might also decide this is unnecessary.
What can a mechanic find that you can't spot on your own? For one thing, the mechanic
will put the car up on a lift. Oil or fluid leaks are easier to spot. The mechanic
might also do a compression check that would show engine wear. And finally, the
mechanic's expert eye might spot a problem you overlooked.
There is a lot to cover when evaluating and test-driving a used car. A complete
list of what to look for is found under this section of our Used
Car Buying Tutorial. Here, though, are a few general recommendations.
Look at the Big Picture First
Before you drive the car, do a "walk-around." Look at the Big Picture First: Crouch next to the front bumper and sight along the lines of
the car. Make sure there are no ripples in the door panels and that the gaps between
the doors and along the hood are even.
Open all the doors and the trunk. Test all the lights, controls, heater and air
conditioner. Open the hood and make sure there are no leaks or sprays on the underside
of the hood lining that would indicate a burst hose or fluid leak. With the engine
running, listen for noises that might indicate a mechanical problem.
Test-Driving Used Cars
Once you get behind the wheel, your first impression will be the way the car feels
when you sit in it. Is it a good fit? Are the headroom and legroom sufficient?
Are the gauges and controls laid out conveniently?
Before you start driving, adjust the seat, the mirrors and the seatbelt. Ask yourself
if it would be a comfortable car to take on a long trip.
Turn off the radio before you begin driving. For now, you want to hear the engine
and concentrate on the driving experience.
On the test drive, evaluate these specific points:
- Acceleration from a stop
- Visibility (Check for blind spots)
- Engine noise
- Passing acceleration (Does it downshift quickly?)
- Hill-climbing power
- Braking
- Cornering
- Suspension (How does it ride?)
- Seat comfort and ergonomics
- Rattles and squeaks
- Interior controls
- Audio system
- Cargo space
Should You Buy a Used Rental Car?
As previously mentioned, Phil's search led him to the Hertz used car lot. Conventional
wisdom has warned buyers not to purchase used rental cars. It is assumed that
these cars have been abused by drivers renting the cars. However, prices at rental
car lots are extremely low; the warranties are still in effect; and anecdotal
evidence in Edmunds Town Hall reports few problems with such purchases. Furthermore,
the Hertz lot was no haggle, or fixed pricing.
Did no haggle really mean they wouldn't negotiate? Phil tried offering
$11,800 for the 626 priced at $12,595. The salesman said pricing was set by their
corporate office and refused to budge. They made a deal and a purchase order was
drawn up. However, Phil's check from PeopleFirst was refused by the salesman.
When PeopleFirst was contacted, the representative volunteered to send out a cashier's
check immediately. It was decided that the Mazda 626 would be held for Phil for
four days until the cashier's check arrived.
However, Phil decided to keep shopping while the financing was arranged.
The next day, Phil saw one of his target cars, a 2000 Mitsubishi Galant ES advertised
in the newspaper for $12,500. He called the number and found it was at an Acura
dealership in Southern California. They drove there, test-drove the car and Phil
discovered he liked it much better than the Mazda 626. Since he already had a
deal set up, he had nothing to lose by trying to beat the price and get the Galant.
Preview of Part Three — Negotiating for a Used Car & Closing the Deal
In the final part of this series, we'll look at the most difficult step for many
people: negotiating. And you'll see how John and Phil did in this department.
Then, when the haggling is done, you need to make sure you cover all the bases
before you sign on the dotted line.
Part One: Identifying
Your Target Cars & Arranging Financing
Part Three: Negotiating
and Closing the Deal
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