How to save on your next used car purchase

How to save on your next used car purchase

By Mark Derry

For most people, buying a used car is often a very painful and frustrating experience. Much of this suffering can be avoided, however, with a little knowledge and advance preparation. After many years of finding used cars for other people, I have learned a few things that can make the process much easier - and almost, I dare say, fun. Here is my five-step process.

STEP 1: PROCESS OF ELIMINATION

One of the most important steps in buying a used car is determining the type of car to buy. This may seem obvious, but you would be amazed at the number of people that end up buying the first car that comes their way. It is important to ask three very basic questions:

1. What do I need?

As much as you may WANT a sporty convertible, practical is usually the best route to take. You should consider things like size, warranty, resale, required options, and how long you plan on keeping the car. Tip: Check if the car still has a valid warranty that is transferable to a new owner.

2. What can I afford?

If money is no object, then you can disregard everything in point one -- and stop reading right now because this article is not for you! For the rest of us that have a budget -- look closely at it. How much money do you have on hand (if any) as a down payment? Check out used car prices on the Internet (autotrader.ca is a good bet) and in local newspapers. Do you want to lease or finance? How much can you afford per month? Tip: Before you go car shopping, you should also get pre-approved for a car loan from a local banker. Note that most banks' car loan interest rates are negotiable within reason -- 1% or 2% on a loan of several thousand dollars will prove to be significant.

3. What reliable models should I consider?

Once you have a basic idea of what you need, it's time for the tough part - research. There, I said it - I know it's an ugly word but it's important. There is a wealth of information available now. The Internet may be good depending on how comfortable you are with it. Other publications like Lemon-Aid and Consumer Reports are easy to understand and readily available at the local library or bookstore. Tip: Avoid the opinions of friends or relatives --the probably have biases based on limited experience. Let the experts recommend cars that are reliable based on proper research and safety tests.

STEP 2: THE SEARCH

Where do I find a good used car? Good question -- is there such a thing? Believe it or not there is. Here are some options:

1. Local dealers vs. private sales

Dealers are usually a good place to start since they allow you to see a variety of cars within a short period of time. But beware! There are some very good dealers and some very bad ones -- this applies to both the bigger "reputable" ones as well as to the smaller used car dealers. Private sales are often a little less expensive and offer you more flexibility to ask questions and have the car inspected by an unbiased third party. You may also get lucky and find someone who kept all the service records for the car. Tip: If you buy a car privately you only pay 8% PST vs. 15% PST & GST at the dealer - you save 7%.

2. Classified ads

Most local ads can be found in: The Toronto Star, The Toronto Sun, The Globe and Mail, Buy and Sell, Auto Trader, Auto Mart, Pennysaver, local papers, and various Internet sites. Tip: Most of these resources are available online for free and can save you many hours of searching for the specific car that you want. Some good local sites are TheStar.com, Canoe.ca, Autonet.ca, Megawheels.com, autotrader.ca and Motomerchant.com.

STEP 3: DIVIDE AND CONQUER

Phone Calls: You will quickly find out that not all cars listed in ads are as good as they look. Time is very important and this is where you can save a lot of it. Prepare a list of questions before you call and TAKE NOTES. The idea is that you want to find out as much about the car before you waste your time going to see it. Here are some important questions you should ask:

1. Is this a private sale and are you the owner of the car?

If not, ask if you can speak to the owner. The sellers may say they are "selling it for a friend." It doesn't matter - RUN! There is a good chance that they are a "curbsider" and you don't want any part of them or their car. It is possible that one may be legitimate, but why take the chance? Tip: For more information on curbsiders, visit www.omvic.on.ca. If you detect a curbsider, call the Ontario Motor Vehicle Industry Council's hotline at 1-888-662-8727.

2. How many owners have there been?

For cars in Ontario, has the owner purchased the "Used Vehicle Information Package" that tells the names of all owners, as well as if there are any liens against the car? If there is a lien, then make sure it's removed before you buy the car. Try to get them to buy the package before you go to look at the car so that you can see it before you make any offer. Tip: Ask if the car was ever registered out of province. If so -- also RUN. There is a list of reasons that I won't go into here but it's really not worth the potential problems.

3. Is there any warranty left and is it transferable? Is there a cost to transfer it?

4. What about other details?

Confirm such information as the make, model, colour, year, options, and mileage (in km). Tip: Mileage is not always the most important thing to look at on a car. A car with 130,000 km that has been serviced properly may be a better buy than a car that has 60,000 km but needs tires, brakes, exhaust, and a new engine due to the fact that the oil wasn't changed.

5. Why are they selling it?

6. Has the car ever been in an accident or painted for any reason?

7. Is the car sold "Certified" with "Drive Clean"?

Tip: Used cars under 20 years old sold in several Ontario regions must pass a Drive Clean test in order for the ownership to be transferred. For more information on Ontario's Drive Clean program or the Used Vehicle Information Package, visit www.mto.gov.on.ca.

8. What kind of mechanical repairs have been done recently and do they have the service records to prove it? What repairs need to be done in the near future?

9. Would they mind if an independent mechanic was to take a look at the car?

If they say no then they may be trying to hide something.

10. Is the price flexible?

I think this is a good time to get a feel for a little negotiating. However, I don't think the best thing to do is to ask for their "best price" before you've even seen what they're selling. Tip: If you choose to negotiate once you've had a look at the car and like it, try to be nice. You can get a lot further if you suggest that it's a great car but a little outside of your budget as opposed to saying that they are "out to lunch" with what they are asking. Once you have called all the ads that look interesting, decide which ones you would like to see and arrange a mutually convenient time -- preferably in the daylight. If possible, try to see the car that appears to be the best deal first. And now that you have narrowed it down, here comes the fun part:

STEP 4: THE APPOINTMENT

Although a test drive may be fun, it is also one of the most important steps in ensuring that you end up with a good reliable car (and not someone else's problems). There are a number of important things to look at and consider now:

1. Was the car ever repainted or in an accident?

Make sure you look at the car in the daylight. This makes it much easier to detect if part or all of the car was ever repainted. Probably the easiest thing to look for first is any colour differences between body panels. Check to make sure the entire car is exactly the same colour. Also make sure that the spaces between the panels are even and consistent.

Next, look around areas where the paint stops near rubber or chrome, such as around the windshield or other door moldings. If an area has been painted you will usually notice a very fine line where the masking tape has been used to protect the unpainted areas. If the car is clean, run your hand along the body panels and you may feel a very thin layer of paint, called over-spray. Look under the car for any over-spray as well - you would be amazed at the number of painted gas tanks or tail pipes that are out there.

Also open the doors, hood, trunk, and fuel door to look for tape-lines or over-spray. If you notice that an area has been painted, ask the seller why and make sure that the answer makes sense -- and hope they can provide a receipt from a reputable body shop that did the repair.

2. Check for odometer tampering

It is difficult to detect if a car's odometer was ever tampered with, but not impossible. Sometimes it's even very easy, as when I found the original odometer hidden in the trunk! A more standard method is to check mechanical receipts to confirm that the dates and the mileage coincide with each other. Also see if the seats or the gas/brake pedals are worn excessively; this will usually indicate high mileage.

3. Evaluate the mechanical condition.

You don't have to be a mechanic to spot some basic things when looking at a car. Keep in mind that mechanical problems can always be fixed, but can be expensive. If you are buying the car certified, then items such as tires, brakes, exhaust system, suspension, and lights will have been checked to make sure they pass minimum industry standards for safety levels. However, you should still inspect them yourself.

Check the tread depth over the entire width of the tires -- if the alignment is off the tires may wear unevenly on the sides, which may mean a costly repair in the near future. Check where the car is usually parked. Look for any fluid leaks and investigate further if you find some.

When inside the car, ensure that everything is working. This includes the stereo, any powered gadgets like windows and side mirrors, the heating system, windshield wipers, air conditioning, rear defrost, etc.

Once you've done all of this you can then drive the car. While test-driving, keep the radio off. Listen for anything that sounds out of the ordinary. Does the engine idle smoothly? Does the car shift properly? How does the clutch feel if it's a standard transmission? Check if the car steers straight or if it pulls to one side when braking. Is there any noticeable smoke when you accelerate and what colour is it?

Also, check the floors and the trunk area, where the spare tire is, for moisture - there may be leaks if the carpets are wet. If you are concerned about anything you may want to ask the owner some more questions and possibly have the car inspected by a mechanic of your choice. Depending on your time constraints and your budget it is always nice to have another opinion from a professional. The cost of a mechanic's inspection will usually be well under $100.

STEP 5: THE FINAL DECISION

The critical moment is upon you - do you make an offer or move on to the next car on the list? If you have done your homework you should be able to make a good, informed decision. Even if it is the first car you actually drove, it may be the right car for you. There may not be a "better deal" out there. A good used car isn't always the cheapest one.

I hope this information helps you to feel more secure and better equipped to find the right car, in the end saving you time and money. Good luck.

Mark Derry is a Toronto-area Automotive Advisor who provides expert, unbiased advice to assist people with the purchase of both new and used cars. For further information, you can visit www.carsense.to, or call 416-697-8363.