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.
To get a free auto financing quote click
here.
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.
To check any vehicle's
history, go here.
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 any one of the above statements is not true, then the warranty is "limited."
A "full" or "limited" warranty need not cover the entire vehicle. The dealer may
specify only certain systems for coverage under a warranty. Most used car warranties
are "limited," which usually means you will have to pay some of the repair costs.
By giving a "limited" warranty, the dealer is telling you that there are some
costs or responsibilities that the dealer will not assume for systems covered
by the warranty.
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.
Under another federal law, the Magnuson-Moss Warranty Act, you have a right to
see a copy of the dealer's warranty before a purchase. Examine the warranty carefully
before you buy to see what is covered and what is not. It contains more detailed
information than the Buyers Guide, such as a step-by-step explanation of how to
obtain repairs if a covered system or component malfunctions.
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.
For more information on extended warranties click here.
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.
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