How to Buy a Used Car and Avoid Dealer Scams
Buying a used car – It can be very hard to find the right used car. What do I mean by right? Well, many people just get rid of their car because it has problems, and you don’t want to be the person who gets stuck with someone else’s problem! When buying a used car, you need to purchase a vehicle history report from CarFax to protect yourself from fraud. A potentially fatal form of fraud that you must watch out for is Airbag fraud. Airbag fraud is on the rise and may soon rank as the worst vehicle repair scam out there, and a potentially fatal one.
Car History Check
| Heading | Details |
|---|---|
| CarFax and Vehicle History Reports | We are so lucky today that there are companies like CarFax that will check out the car’s history. Car Fax will even guarantee that if the report says a vehicle has a clean title, but a Branded Title actually exists, they will pay you $5,000. |
| What Is a Branded Title? | A “Branded Title” is a passenger motor vehicle ownership document issued by any of the 50 states of the U.S. (or the District of Columbia) which bears words or symbols signifying that the vehicle was: junked or salvaged; rebuilt or reconstructed; flood damaged; disclosed as damaged; bought back by its manufacturer; odometer exceeds mechanical limits; odometer was not actual mileage; or any other symbol or word signifying a similar Brand. |
A Warning about “BUY HERE PAY HERE” programs.
Many used car dealers use the financing program called “Buy here Pay here”where you make your payment, usually weekly, at the dealer themselves. They also keep the title and are listed as a lien holder just like a bank. Before you drive away also most will make copies of your key in case you miss a payment. These vehicles are bought at auction and are the low-priced cars that they bid $500-$1000 on. They will make you pay a down payment of whatever the car costs, and then you make $50-$200 weekly payment until you end up paying $7000 for a $500 car. They also hope that the buyer cannot pay off the loan because they will just repossess the car and sell it again for the same high down payment and weekly payments. This is how they make tons of money from you. They like to take advantage of people with bad credit because they usually can’t get regular financing and will take any car offered to them.
Our reports can reveal:
- Totaled in an accident/Salvaged
- Flood damage
- Odometer rollbacks
- Lemon histories
- Junked Titles
- State emissions inspection results
- Lien activity, and/or
- Vehicle use (taxi, rental, lease, etc.)
Some dealers promote used cars, often with relatively low mileage, as especially desirable because they have been used as demonstrators, or because they were driven by manufacturer representatives and therefore are “program cars” or “executive models.” They may even claim these cars to be brand new cars with low miles, but any car with mileage over 100 miles is a used car and should be treated as such.
DEMONSTRATORS: “Demonstrators” are used to provide test drives to prospective new car customers. Chances are pretty good the car has been maintained as the factory recommends. However, people who take test drives in these cars, particularly drives unaccompanied by a salesman, may drive it hard to see how it does: how quickly does it accelerate, how quickly can it be stopped by slamming on the brakes? Repeatedly pushing a brand-new car to its limits may not be an ideal method for breaking it in. You may want to check the Owner’s Manual to review break-in recommendations, and be cautious about buying a demonstrator where the factory urges gentle driving techniques for the first few thousand miles. Consider whether any price break is really worth it.
PROGRAM CARS AND EXECUTIVE MODELS: The terms “executive models” or “program cars” can mean different things to different people. Be sure you know exactly how the selling dealer is using them. Some dealers use the term “program car” to imply that it has been driven by a manufacturer’s representative for his or her personal use.
However, some vehicles called “program cars” are really cars that have come back into the market after use in the fleets of short-term rental companies. These cars may have received hard use or been damaged in accidents; they also may not have been well-maintained.
LEMON LAUNDERING: One further cautionary note about used cars with relatively low mileage: beware of “lemon laundering.” A car bought back by a manufacturer under one state’s lemon law due to unrepaired defects can be resold in another state without disclosure that the car was a “lemon.” Depending on state law, this may or may not be unlawful. Even when manufacturers provide appropriate disclosures, these may disappear (or be “laundered”) as the car is wholesaled several times, or is processed through auctions. Recycled lemons often have relatively low mileage. Be cautious.
SAFETY: Before or after you buy a car, take it to a dealership that handles the same brand of new cars. For example, if you are considering or have just bought a used Ford Taurus, take it to a dealership that sells and services new Ford automobiles. Ask the service manager to see whether any safety recalls have been issued for the car, and whether the recall work has been performed. Just give the service manager the car’s year, make, model, and Vehicle Identification Number.
Used Car Purchase Tips
| Heading | Details |
|---|---|
| Safety Recalls Are Free | Recall work generally is free, even if you are not the original owner. Dealerships are generally very cooperative in checking for safety recall information. If a dealer will not cooperate, call the manufacturer or importer with the same request and make a mental note never to do business with the dealership. |
| Crucial Steps After Agreeing on Price | When you reach an agreement on the purchase price of a used car, you may be tempted to think you’re home free. In fact, there are several crucial steps that need to be done correctly, or all your hard work up to this point could be for naught. |
| Finance, Insurance, and Paperwork | If you are at a dealership, you still have to go through the Finance and Insurance process. If you are buying a car from a private party, you have to make sure that payment is made and the title and registration are properly transferred. |
In both cases, you also need to make sure you have insurance for the car you just bought before you drive it away.
Private Party Sales
When you buy a car from a private party, you will probably be asked to pay with a cashier’s check or in cash. But before money changes hands, make sure you will be able to register the car in your name.
But what if the seller still owes money on the car and the bank is holding the title? One way to deal with this is to conclude the sale at the bank where the title is held. Have the seller call ahead and make sure the title is ready. Once money has changed hands and the bank has been paid the balance of the loan, the seller can sign the title over to you.
Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used car.
