If your old clunker is gasping its last, you might think (like millions of other Americans these days) you can save yourself some money by buying a used car instead of a new one. You can—if you make smart buying decisions. Hasty or unwise used-car buying can end up costing you much more in the long run.
As new car sales have crashed, purchases of used cars continue to rise, according to many news reports. In March, PBS reported dealerships sold more than 2 million used cars in recent months, about 25 percent higher volume than you would expect in a healthy economy. The math behind the trend is simple: new cars cost more than used, depreciate faster and are generally costlier to insure, so more Americans are buying used to save money.
But what about repair expenses? If you buy a used car for $15,000 and it costs you $5,000 in repairs in the first year, have you really saved? To ensure you’re buying a used vehicle that won’t turn into a money pit, follow a few simple steps:
Early in the process: Repairs are a reality of used car buying. As vehicles get older, they begin to need more maintenance and repairs. Some newer model used vehicles may still have some factory warranty left, but older models usually do not. An impending need for repairs, however, may not necessarily be a deal-breaker if you find out ahead of time how much those repairs might cost and budget appropriately.
You probably already have a few makes and models in mind. Before you settle on one, compare the cost of the parts needed for the most common repairs and maintenance. One model may have a sales price that’s $5,000 less than another you’re considering, but if the cost of parts is 20 or 30 percent higher than parts for another vehicle, the higher-priced model might actually be a better deal.
Turn to resources like RockAuto.com to compare parts prices. The site’s Repair Index automatically pulls prices from the company’s vast auto parts catalog based on year, make, model and type of part. It’s a quick, easy way to compare parts costs for different models, and the results can be surprising.
For example, you might think a Chevy Metro is an economical car, but parts for one can be expensive, according to RockAuto, which sells parts for an average 20 to 60 percent less than other parts dealers. The bulk of the company’s business is selling parts direct to consumers, so it’s possible to save even more money by buying parts directly and doing repairs yourself. Visit RockAuto.com to learn more.
Next, check the repair history for a particular make and model from a credible source like Consumer Reports. The independent ratings organization maintains a huge database of information on virtually every make and model vehicle available in America. Actual owners and drivers contribute the information based on their experiences with a particular vehicle.
Once you’ve narrowed it down: When you find a vehicle you’re interested in, check the repair history and maintenance for that specific car. Pull a vehicle history report from a third-party source like CarFax, which will generally list major (reported) maintenance and accidents. The report can also help you spot discrepancies in odometer readings, if the vehicle has been used in an area prone to flooding, or if it’s been rebuilt after being in an accident so severe it was declared a total loss.
Never buy a used car until you’ve had it checked by your own mechanic—not even from a dealership that offers “certification” on its used vehicles. If a seller isn’t willing to let you take the vehicle to your mechanic, walk away.
Finally, consult your insurance agent to see how much it will cost to insure the vehicle. A used car that actually increases your annual premium may not be the great deal you thought it was.
from the July 29-August 4, 2009, issue