This year, more than sixteen million Americans will buy a used car. If that's what you are planning, this guide may help you.
Before you begin looking at used cars, think about what car models and options you want and how much you are able or willing to spend. You can learn about car models, options, and prices by searching the Internet or reading newspaper ads. Also, your local library and bookstores have magazines that discuss and compare car models, options and costs, as well as provide information about frequency-of-repair records, safety tests, and mileage.
Before You Look For a Used Car, Consider
Cost. Remember, the real cost of a car includes more than the purchase price. It includes loan terms such as interest rates and the length of the loan. If you plan to finance the car, you need to know how much money you can put down and how much you can pay monthly. Dealers and lending institutions offer a variety of interest rates and payment schedules, so you will want to shop for terms.
If, for example, you need low monthly payments, consider making a large down payment or getting financing that will stretch your payments over five years, rather than the usual three. Of course, this longer payment period means paying more interest and a higher total cost.
Reliability. You can learn how reliable a model is by checking in publications for the frequency-of-repair records. Find out what models have repair facilities in a location convenient to you and if parts are readily available at the repair facility.
Dealer Reputation. Find out from experienced people whose opinions you respect which dealers in your area have good reputations for sales and service. You may wish to call your local consumer protection office and the Better Business Bureau to find out if they have any complaints against particular dealers.
If You Buy a Used Car From a Dealer
If you go to a dealer for a used car, look for a "Buyers Guide" sticker on the
window of each car. The Buyers Guide, required by the Federal Trade Commission's
Used Car Rule, gives you important information and suggestions to consider. The
Buyers Guide tells you:
- Whether the vehicle comes with a warranty and, if so, what specific protection the dealer will provide
- Whether the vehicle comes with no warranty ("as is") or with implied warranties only
- That you should ask to have the car inspected by an independent mechanic before you buy
- That you should get all promises in writing
- What some of the major problems are that may occur in any car.
The Used Car Rule requires dealers to post the Buyers Guide on all used vehicles,
including automobiles, light-duty vans, and light-duty trucks. "Demonstrator"
cars also must have Buyers Guides. But Buyers Guides do not have to be posted
on motorcycles and most recreational vehicles. Individuals selling fewer than
six cars a year are not required to post Buyers Guides.
Whenever you purchase a used car from a dealer, you should receive the original or an identical copy of the Buyers Guide that appeared in the window of the vehicle you bought. The Buyers Guide must reflect any changes in warranty coverage that you may have negotiated with the dealer. It also becomes a part of your sales contract and overrides any contrary provisions that may be in that contract.
"As Is--No Warranty"
About one-half of all used cars sold by dealers come "as is," which means there is no expressed or implied warranty. If you buy a car "as is" and have problems with it, you must pay for any repairs yourself. When the dealer offers a vehicle for sale "as is," the box next to the "As Is--No Warranty" disclosure on the Buyers Guide will be checked. If this box is checked but the dealer makes oral promises to repair the vehicle, have the dealer put those promises in writing on the Buyers Guide.
Some states (Connecticut, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New York, Rhode Island, Vermont, West Virginia and the District of Columbia) do not permit "as is" sales for most or all used motor vehicles.
"Implied Warranties Only"
Implied warranties exist under all states laws and come with almost every purchase from a used car dealer, unless the dealer tells you in writing that implied warranties do not apply. Usually, dealers use the words "as is" or "with all faults" to disclaim implied warranties. Most states require the use of specific words.
"If the dealer makes oral promises, have the dealer put those promises in writing."
The "warranty of merchantability" is the most common type of implied warranty. This means that the seller promises that the product will do what it is supposed to do. For example, a car will run, a toaster will toast.
Another type of implied warranty is the "warranty of fitness for a particular purpose." This applies when you buy a vehicle on the dealer's advice that it is suitable for a particular use. For example, a dealer who suggests that you buy a specific vehicle for hauling a trailer warrants, in effect, that the vehicle will be suitable for hauling a trailer.
If you buy a vehicle with a written warranty, but problems arise that the warranty does not cover, you may still be protected by implied warranties. Any limitation on the duration of implied warranties must appear on the written warranty.
In those states that do not permit "as is" sales by dealers, or if the dealer offers a vehicle with only implied warranties, a disclosure entitled "Implied Warranties Only" will be printed on the Buyers Guide in place of the "As Is" disclosure. The box next to this disclosure would be checked if the dealer chooses to sell the car with implied warranties and no written warranty.
Title Check
A clean title history is the key to confirming the value of a vehicle for the buyer and seller. The Vehicle History Report from Carfax uncovers the history of any vehicle showing you a clean history or exposing costly, dangerous problems. Take the First Step toward the history of your vehicle with the Free Carfax Lemon Check.
Don't let your car buying experience go sour from lack of information. First, pre-screen the vehicle with a free Carfax Lemon Check. The free Lemon Check report will let you know if the vehicle was a manufacturer buy-back (lemon). Then, if you need more precise information, get a full Carfax Vehicle History report for a modest fee. The full Lemon report searches a database of 850 Million records. The full report helps detect salvage history, flood damage, odometer fraud, and any other hidden problems in the vehicle's past.
Dealer Warranties
When dealers offer a written warranty on a used vehicle, they must fill in the warranty portion of the Buyers Guide. Because the terms and conditions of written warranties can vary widely, you may find it useful to compare warranty terms on cars or negotiate warranty coverage.
Dealers may offer a full or limited warranty on all or some of the systems or components of the vehicle. A "full" warranty provides the following terms and conditions:
- Warranty service will be provided to anyone who owns the vehicle during the warranty period when a problem is reported.
- Warranty service will be provided free of charge, including such costs as returning the vehicle or removing and reinstalling a system covered by the warranty, when necessary.
- At your choice, the dealer will provide either a replacement or a full refund if the dealer is unable, after a reasonable number of tries, to repair the vehicle or a system covered by the warranty.
- Warranty service is provided without requiring you to perform any reasonable duty as a precondition for receiving service, except notifying the dealer that service is needed.
- No limit is placed on the duration of implied warranties.
If the dealer offers a full or limited warranty, the dealer must provide the following information in the "Warranty" section of the Buyers Guide:
- The percentage of the repair cost that the dealer will pay. For example, "the dealer will pay 100% of the labor and 100% of the parts...."
- The specific parts and systems, such as the frame, body, or brake system that are covered by the warranty.
The back of the Buyers Guide contains a list of:
- Descriptive names for the major systems of an automobile where problems may occur
- The duration of the warranty for each covered system. For example, "30 days or 1,000 miles, whichever occurs first"
- Whether a deductible applies.
Also check who is legally responsible for fulfilling the terms of the warranty. If a third party is responsible, the best way to avoid potential problems is to make sure that the third party is reputable and insured. You can do this by asking the company for the name of their insurer and then checking its performance record with your local Better Business Bureau.
Unexpired Manufacturer's Warranties
If the used vehicle is still covered by the manufacturer's original warranty, the dealer may include it in the "systems covered/duration" section of the Buyers Guide. This does not necessarily mean that the dealer offers a warranty in addition to the manufacturer's. In some cases, a manufacturer's original warranty can be transferred to a second owner only upon payment of a fee. If you have any questions, ask the dealer to let you examine any un-expired warranty on the vehicle.
Service Contracts / Extended Warranty
An Extended Warranty or Service Contract is an agreement between the owner and the Warranty Company, obligating the Warranty Company to pay for repairs covered by the contract for a specific period of time. Your Vehicle is a major investment. With an Extended Warranty you are protecting yourself from the unexpected cost of mechanical breakdowns. One major repair often ends up costing as much, or even more than the entire cost of the warranty. An Extended Warranty will ensure that your Vehicle is always in the best mechanical condition.
We recommend WarrantyDirect for purchasing an extended warranty contract. Warranty Direct is the nation's leading direct marketer of extended warranties covering motorcycles, automobiles, light trucks, recreational vehicles, boats and more. When you buy from them, you are buying from the source and eliminating the middlemen and additional markups. You pay below retail prices and save up to 60% over what others charge.
Spoken Promises
The Buyers Guide warns consumers not to rely on spoken promises. Oral promises are difficult, if not impossible, to enforce. Make sure all promises you want are written into the Buyers Guide and keep it.
Pre-Purchase Independent Inspection
The Buyers Guide also suggests you ask the dealer whether you may have the vehicle inspected by your own mechanic. Some dealers will let you take the car off the lot to get an independent inspection. Others may have reasons, such as insurance restrictions, for denying this request. In such a case, the dealer may permit you to bring an independent mechanic to the used car on the lot. A dealer who refuses to allow any independent inspection may be telling you something about the condition of the car.
Remember, a good-looking car, or a car that comes with a warranty, does not necessarily run well. An independent inspection lets you find out about the mechanical condition of the vehicle before you buy it. Although an inspection fee by a mechanic may seem high, when you compare it to the price of the car, it can be worth the cost.
Vehicle Systems
The Buyers Guide includes a list of the 14 major systems of an automobile and some of the major problems that may occur in these systems. You may find this list helpful to evaluate the mechanical condition of the vehicle. The list also may be useful when comparing warranties offered on different cars or by different dealers.
Dealer Identification and Consumer Complaint Information
On the back of the Buyers Guide, you will find the name and address of the dealership. In the space below that, you will find the name and telephone number of the person at the dealership to contact if you have any complaints after the sale.
Before You Buy Any Used Car
If you are interested in a particular car, ask the dealer or owner if you can take it on a test drive. Try to drive the car under many different conditions, such as on hills, highways, and in stop-and-go traffic.
You also may want to ask the dealer or owner whether the car has ever been in an accident. Find out as much as you can about the car's prior history and maintenance record. Getting an independent inspection by an experienced mechanic is a good idea before purchasing any used car.
Be prepared to negotiate. Many dealers and individuals are willing to bargain on price and/or on warranty coverage.
If You Have Problems
If something goes wrong with your car and you think that it is covered by a warranty (either express or implied) or a service contract, refer to the terms of the warranty or contract for instructions on how to get service. If a dispute arises concerning the problem, there are several steps you can take.
Try To Work It Out With The Dealer
First, try to resolve the problem with the salesperson or, if necessary, speak with the owner of the dealership. Many problems can be resolved at this level. However, if you believe that you are entitled to service, but the dealer disagrees, you can take other steps.
If your warranty is backed by a car manufacturer and you have a dispute about either service or coverage, contact the local representative of the manufacturer. This local or "zone" representative has the authority to adjust and make decisions about warranty service and repairs to satisfy customers.
Some manufacturers also are willing to repair certain problems in specific models free of charge, even if the manufacturer's warranty does not cover the problem. Ask the manufacturer's zone representative or the service department of a franchised dealership that sells your car model whether there is such a policy.
Other Approaches You Can Try
If you cannot get satisfaction from the dealer or from a manufacturer's zone representative, contact the Better Business Bureau or a state agency, such as the office of the attorney general, the department of motor vehicles, or a consumer protection office. Many states also have county and city offices that intervene or mediate on behalf of individual consumers to resolve complaints.
You also might consider using a dispute resolution organization to arbitrate your disagreement if you and the dealer are willing. Under the terms of many warranties, this may be a required first step before you can sue the dealer or manufacturer. Check your warranty to see if this is the case.
If you bought your car from a franchised dealer, you may be able to seek mediation through the Automotive Consumer Action Program (AUTOCAP), a dispute resolution program coordinated nationally by the National Automobile Dealers Association and sponsored through state and local dealer associations in many cities. Check with the dealer association in your area to see if they operate a mediation program.
If none of these steps is successful, you can consider going to small claims court, where you can resolve disputes involving small amounts of money for a low cost, often without an attorney. The clerk of your local small claims court can tell you how to file a suit and what the dollar limit is in your state.
The Magnuson-Moss Warranty Act also may be helpful. Under this federal law, you can sue based on breach of express warranties, implied warranties, or a service contract. If successful, consumers can recover reasonable attorney's fees and other court costs. A lawyer can advise you if this law applies to your situation.