How to Get a Used Car Bargain Part Two
Locate and Test-Drive Your Target Cars
In Part One we stressed the importance of deciding on your price range and arranging financing before you shop. We also told you how to identify good used cars that could be bought at bargain prices.
In this section, we'll locate several likely candidates and learn how to effectively test-drive and evaluate the mechanical condition of these "target cars."
Step 3: Locate Your Target Cars
Your goal is to locate three cars that fit your criteria. This will put you in a stronger bargaining position and will give you a fall-back position if your top choice falls through.
Use a number of different sources to conduct your search:
- Online classified ads on AutoTrader.com, eBay or Craigslist
- 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.
During your search, you'll come across cars from dealerships, private parties and possibly even used rental cars. We'll examine each of these options and then show you how to qualify your target cars before test-driving them.
Private Party vs. Dealership
Many people are intimidated by the dealership experience, fearing pushy salesmen and professional negotiators. But there are several advantages to 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 — a dealership may have several ways to 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.
You can find dealerships that have treated customers well by searching Edmunds Dealer Ratings and Reviews.
There are advantages to buying a used car from a private party as well, including:
- Low price — no dealership mark-ups
- Low-key negotiations — you are dealing with an amateur, not a pro
- Accountability — the previous owner usually has the car's service records
Certified Used Cars
Don't rule out buying a certified used car (usually found on new car lots). If anything goes wrong with the car within the period of the certified warranty, it will be fixed for free. So if a certified vehicle appears to be in good condition, you don't have to do any further checking to make sure it will be reliable.
Take Volkswagen, for example. Its certified used cars have to pass a 112-point inspection. VW then adds a two-year/24,000-mile limited warranty that includes roadside assistance. At Edmunds, we once bought a certified used 1999 VW Passat GLS that overheated only four months later. The repairs (not extensive) were covered by the warranty.
You'll pay more for this peace of mind, though. According to Edmunds data, certified used cars that sell in the $10,000-$20,000 range are estimated to be $500-$2,500 more expensive than their non-certified counterparts. So while they're not necessarily as much of a "bargain" when you buy them, they can be a better value over the long run if you need that warranty down the road.
Used Cars Still Under Factory Warranty
Late-model used cars can be great bargains, because someone else has already taken the biggest depreciation hit. Most new cars are sold with a three-year/36,000-mile, bumper-to-bumper warranty (luxury cars tend to be four years/50,000 miles and Hyundai offers five years/60,000 miles). So if you buy a car that is a year old, with only 15,000 miles on it, you'll still have, at minimum, two years and 21,000 miles remaining on the warranty. And if anything covered by the warranty breaks down, the problem will be fixed for free during the warranty period.
The vast majority of bumper-to-bumper warranties are transferrable to subsequent owners. But the long-term powertrain warranties from some automakers such as Chrysler, Hyundai and Kia, only apply to the original registered owner, so the coverage is invalid if the car is resold. Most automakers' Web sites list the details of their warranties, so check there for more information if this is a deal-breaker for you.
Should You Buy a Used Rental Car?
Conventional wisdom has warned buyers not to purchase used rental cars, because it's assumed that these cars have been abused. 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, some rental car agencies offer "no-haggle" (fixed) pricing.
For more on buying used rental cars, see "Used Car Deals: Program Cars, Rental Cars & Salvage Titles."
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. Use our Used Car Question Sheet for each car you investigate. Verify the facts from the ads via phone or e-mail. Modify the question sheet as needed, but be sure to take careful notes, because different cars easily blur together after a few days of shopping.
Once you have found three cars that seem to match your needs, it's almost time to test-drive them. Before you do, it's wise to use our loan payment calculator to refine the various terms of the loan you'll need, including your monthly payment.
Being able to plug in the specific cars you now have in mind will result in a clear idea of what financing details should look like — before you go to the dealer. Keep in mind that taxes and fees vary from state to state, and sometimes dealers will try to build in hidden fees (see "What Fees Should You Pay?").
Step 4: Test-Driving a Used Car
It is well known among car salespeople that, "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 shouldn't become emotionally attached to the vehicle you're testing. Instead, focus on evaluating it.
Evaluating cars breaks into two main considerations. First, do you like the car? It could be a good car, but maybe you don't like the styling, the interior or the acceleration. It might not have enough legroom or headroom. Once you've decided you like the car, you then need to ask, is the car in mechanically sound condition?
What To Look for on a Test-Drive
There is a lot to cover when evaluating and test-driving a used car. 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.
Once you get behind the wheel, your first impression will be the way the car feels when you sit in it. Are the headroom and legroom sufficient? Do you have good visibility front and rear? Are the gauges and controls laid out conveniently?
Before you start driving, adjust the seat, the mirrors and the seatbelt. How's the lumbar support? Would it 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 zones)
- 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
For more details, see, "The Feel of the Wheel — How To Test-Drive a Car."
Using Carfax
Let's say you've found a few cars you really liked on the test-drive. Before you take the next step, it's important to know the car's history. A valuable resource is a vehicle history report, such as those supplied by AutoCheck, Carfax or the federal National Motor Vehicle Title Information System. If you enter a car's vehicle identification number (VIN) you can obtain a report of the car's history. Most significantly, you will find if it has a salvage title. You may also learn if there were any recalls and how many owners the car has had — the fewer, the better.
Auto history report companies offer different pricing models, such as one price for reports on several cars or unlimited reports for a certain period of time. Our recommendation is that you read up on these companies at the beginning of your car-buying process and then check every car before you seriously consider buying it.
There are other types of vehicle history reports and pricing as well; see "Which Vehicle History Report Is Right for You?"
Take the Car to a Mechanic
Even if the car you're interested in has a clean Carfax record, if you are serious about buying it and have any doubts about its condition, take it to a mechanic you trust or an AAA-authorized service center. A private party will probably allow you to take the car to a mechanic without much resistance. You can also hire a mechanic to come to you.
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, making oil or fluid leaks easier to spot. The mechanic might also do a compression check that will show engine wear. And finally, the mechanic's expert eye might spot a problem you overlooked.
Preview of Part Three: Negotiating for a Used Car and Closing the Deal
In the final part of this series, we'll look at the most difficult step for many people: negotiating. Then you'll learn how to cover all the bases before you sign on the dotted line.
Part One: Decide Your Price Range, Arrange Financing and Identify Your Target Cars
