NEWB Guide for Buying a Used Car

This is a bunch of stuff I just wrote out for someone asking for help buying a used car. I figured since I spent my time doing it, I’d post it here so I can reference it in the future. This list is not for lazy people who just want to go to CarMax and pay whatever they are asking. This is for people who are actively looking for a used car and want to get the most car they can get for their money. YES, it involves work. If you’re lazy, just stop reading and go pay retail for your car at Carvana or CarMax. This info is not for you.

And NO, just because it’s a Honda does NOT mean that “it’ll be fine”. You won’t think so when you have to pay for a timing belt or other big maintenance items that you did not account for when you bought it. Trust me.

Qs for buying a used car WITH CASH (this example is a 10 year old Honda Civic w/ 52k miles with $10k asking price):

1. Is it from an individual or a lot? An old car is better from a lot (that inspects them thoroughly), especially large dealerships. But never rule out individuals IF they can provide maintenance info; if they’ve used a dealership or a particular mechanic, you can call and get the records. I got my first Honda from an individual and got a great deal – BUT the car was only 1.5 yrs old. Older cars are FAR trickier.

2. Can they provide CarFax as well as maintenance records? A car lot should provide CarFax for free, at the bare minimum. Individuals should provide some sort of history. Or THEY can pay for the $20 CarFax report. NO, CarGurus is NOT CarFax and there could STILL be issues that were not reported to either. My car current car (Romeo, ’12 Civic SI) had a fender bender – I know this because it had a new left headlamp. Nothing reported to CarFax OR CarGurus. Nothing repainted, tho, so it was fine.

3. This particular car (10 yo Honda) will need a timing belt if it does not have a new one. Regardless of mileage, that belt is 10 YEARS OLD and needs to be replaced ASAP if it has not been done. If it has not been done, get a quote and take that amount right off the top of your offer. (Timing belts are called for change at around 75k, but AGE matters in this case: DRY ROT. They likely have not had this done.) In general, timing belts are usually a big ticket item that MANY used cars need done. People will trade cars right before they need big maintenance done, so KEEP THIS IN MIND. It also pays to find out when the car you’re looking at calls for a belt change. My current Honda is at 100k, so that was not an issue when I bought it with less than 60k on it. If the car you’re looking at calls for it to be changed at 75k and the car has 50k+ on it, that is an expense you WILL have in short order. Plan for it!

4. Check the tires. If they are old (dry rot), they’ll need to be replaced. 52k is the near the end of tire life for this particular car, in addition to perhaps being 10 years old. In general, if they are significantly worn, get a quote and take that off your offering price as well. If they are fine, then YAY. Most dealerships will put on new rubber as a standard. Romeo had brand new tires – not GREAT ones, but they were new.

5. $10K is the asking price, for this car I’d offer $8k to start. This is NOT after taking off for maintenance/replacing parts. That is MORE OFF. BUT if you are not me, you need COMPS: go check for comparable prices for your area. Getting comps is just as important for a car as a house. Your comp price is a good starting point for negotiations, LESS the repairs the car might need. The repairs are your bargaining chip.

4. Have a trusted mechanic check the car thoroughly (usually a car lot will let you drive out, an individual may require a returnable deposit). On this 10 yr old car: Hoses can have dry rot. Check CV boots. Seals can also be crispy. Also check the rubber around windows and cats whiskers. On all cars: Have them pull codes to see if anything is amiss. Check all hoses and seals. Check the brakes. Check the exhaust and shocks/struts. Front wheel drive cars have CV joints and boots that get worn out, CHECK, it’s an expensive repair. Expect to pay your mechanic for about an hour for this, which is why you do this LAST, after you’ve scoped out the car and are ready to make a deal.

And finally: DRIVE THE CAR when you take it to the mechanic. Like, for an hour. Check the fluids FIRST, before you drive it. If any fluids are low, that suggests bad maintenance and is a RED FLAG. Go fast, go slow, stop short (to check ABS – not in traffic, tho, duh), listen for noise, look for any dash (idiot) lights, pay attention to how the car handles, how the brakes feel (not soft!), how it steers, how the gears change, how the engine sounds. Tell your mechanic of anything amiss to check.

If the car passes all of the above, make an offer that is in line with the comps you got from, less the repairs necessary (if any).

Other random advice:
– Call around to all the large dealerships near you – NOT Carmax ones, actual NEW CAR dealerships like Honda, Toyota, Ford, etc. They often have gobs of used cars (trade ins, yo!) that never even get posted online. Put those sales weasels to work for you! That’s how I found Romeo (’12 Civic SI) and got him for a GREAT price (from a Chevy dealership)! NEW car lots are where the deals are, NOT retail used car lots like CarMax or Carvana. Retail used car lots will not negotiate, but a dealership WILL. They want those used cars off their lot at a profit rather than sending them to the auction. FOR REAL, they are motivated to SELL.
– Have your budget ready and have your car choices narrowed down to no more than THREE when you are shopping. KNOW what you are looking for!!
– Have your criteria and questions IN HAND when you speak to a sales weasel. Print them out if you need to!
– If you don’t have a mechanic, FIND ONE that is rec’d to you and meet them BEFORE bringing them a car to inspect. Make sure they are cool to do an inspection and can get you in quick.
– DO NOT BUY a car with a salvage title. That means it was “totaled” then rebuilt. While LEGAL, you’ll never get insurance.
– Most white vehicles, especially trucks, have been fleet vehicles. The good news is that they will likely have ALL maintenance records. The bad news is high mileage. Be careful with fleet vehicles.
– Buying from an individual is fine, but it is much more risky and a LOT more work than a dealership. If you are not confident about buying a car, I’d suggest sticking to dealerships first, then perhaps smaller lots. You have RECOURSE with a dealership; if they sell you a lemon, you can get some sort of help with it. You have no such recourse with an individual or most small lots.

ONE FINAL THING: This advice is for CASH deals, however, you can use the same criteria for financing. Used car financing is not the same as new car financing – it is much harder to get. This is why people pay exorbitant prices for NEW cars, then add SIX years of financing on top of it. CRAZY. It is the dumbest thing you can possibly do: buy a brand new car. It is worth the effort to buy used if at all possible and to pay cash. For Romeo, I paid a cash down payment and financed $10k at 2.89% for 3 yr. We had perfect credit, however, and a waiting bank loan, which is why I got an even better rate with Cap One. If you can’t pay all cash, then get as much cash as you can for down payment and ask your bank for a used car loan. If you walk in ready to buy, you’ll get a better deal overall and a dealership will try to beat your bank’s loan rate (they make money by making loans).

If you are a nearby friend of mine, just ask me for help. I’m happy to use my Car Buying Fu™ to help friends. :)

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