Saturday, January 3, 2009

Used Car Buyer's Guide: are they really better?

Co-written with Sawyer Sutton

It’s that time of year again, when you might be considering looking at the various kinds of automobiles that are out there on the market. But, you interestingly find that the better deals are actually on the secondhand market as opposed to the new market…that’s right, used cars. Now there are a lot of views and perspectives regarding used cars that can be somewhat true, but for the most part, if you are willing to take the time to do some extra work and properly plan your research, you’ll most likely find that those common views and perspectives are myths and you could end up with the bargain of the century.

Firstly however, let's make a general rule of thumb right now. No used car will be as perfect as the day it rolled off the assembly line like brand-spankin' new. But before I continue to evaluate on that, let's go over those common views and perspectives on used cars that act as a deterrent, like spotting a dead cockaroach in that person's sandwich while you wait on line at the deli. Speaking of rotten food, myth number 1: the reason why people believe that buying used cars is a bad idea is due to the possibility of buying someone else's troubled automobile. While this is true, this is not at all 100% true, and isn't even nearly 50% true. It is thought that people who usually end up with lemons and have no way of getting their money back through the manufacturer or the dealer end up selling their cars to buyers--you--who are oblivious to the background knowledge of the car, and thus you end up with a headache that consumes more money than your loved one...I mean...than you can handle. Another reason as to why you could possibly end up with someone else's troubled auto would be from the previous owner's or owners' incompetence from improper maintenance and care, whatever the circumstances. In cases like these, this can happen, but it rarely does if you take the preventive steps, which mostly entail research.

OK, so some of you might curl up into the fetal position when you hear the word research, but lets face it: this is the second most expensive expenditure next to your mortgage and will transport you, your friends, your family, even your foes, be it your foes will be in the trunk wrapped up rather than the backseat. You can never do too much research and you can never be too thorough. One of the steps that you can take to prevent yourself from getting these mishaps is to run what is called a CarFax report. CarFax is basically a database that holds the basic, yet necessary history and background information of a car using their VIN number, or Vehicle Identification Number. It can tell you how many owners the car had; the service history of the car (but with specifics such as what was serviced or repaired absent); how many times the car was inspected and if it has passed or failed a certain part of the inspection; whether the car was in an accident or if it has a salvage title; if the car was in a flood or fire; odometer fraud (mileage), and registration or the title history of a car. CarFax reports aren’t 100% accurate, but they definitely do provide a basic idea on what the history of the car was like and are definitely worth the $19.99 for one report, or $24.99 for unlimited reports. Another step to take would be to hire a specialized mechanic to do a Pre-Purchase Inspection, or PPI. For example if you’re looking at a used BMW or Jaguar, hire a Jaguar or BMW specialist. Have them come with you to inspect the car. They would be able to tell you what kind of physical condition the car is in. And of course, the price of those depend on the garage but majority of the time, it will only cost you an hour's worth of labor; and if it so turns out you buy the automobile, you now have a potentially positive business relationship with a mechanic, a good asset to have. Next, you can also contact the corporate offices of the manufacturers and ask for a complete service history of the car by submitting the VIN number, which can tell you the details of what each service and repair appointment, if any, entailed. All these steps should be considered when looking for a secondhand car. The VIN number can also show if any major part such as the transmission or the engine has been swapped because they contain serial numbers that match with the VIN number.

Myth number 2: there is also another common perspective that if a car has high mileage, it’s a car not worthy of being considered and could entail a lot of problems because the car was used too much. This my friends, mainly depends on what kind of car it is. A proper car should be able to go at least 120,000 miles or more on one drivetrain (transmission, engine, suspension/chassis). It’s usually around 150,000-200,000 when cars usually start to experience major problems as parts get older and worn out. Altogether, there are a fairly good amount of American, European and Japanese cars that tend to be very reliable and last a long time, though it is widely circulated that European cars and Japanese cars tend to last quite a bit longer just because they are better built. However, before I continue, while age and use does factor in for a car's longevity and reliability, the most important thing to be punctual about is maintenance. Maintenance is a huge factor in determining the longevity and reliability of an automobile. As long as you follow with the recommended service intervals with fluid changes, lubrication, tune-ups, almost any car will be reliable. However, that almost must be well noted because no religious act of maintenance will be able to compensate for a manufacturer's poor design and engineering (anyone who drives a French, Italian or English car would know this) so some cars can be unreliable even when being brand new. It's also good to keep in mind that not every car is perfect even when brand new because automobiles are very very complex and intricate machines and it's very difficult to keep track of every single process that goes into assembling and manufacturing an automobile, so things can be overlooked in the process. Rest assured, though, generalizations can be made about each regions' automobiles so you know which ones to particularly avoid: most American cars can also go up to about 120,000 miles without any major problems. Most Japanese and European cars, more particularly the Germans, are built to last to around 250,000-300,000 miles and to find an example with 80-150,000 miles on it--which is low mileage--is a worthy find, being that there's still a plenty amount of life left on the car. But it all depends on what kind of car it is because it will have its own engineering and design faults, recalls and what not. Some cars are built better than others, but to stick with the generalizations, in most cases the Germans, Japanese, and Americans manufacture the best automobiles in the world. If you do buy a car with high mileage, check if certain major parts have been rebuilt or replaced such as the transmission or engine. However though, it’s not recommended that you buy a car with rebuilt parts of the drivetrain because you don’t know if it was done properly, unless stated on a service record that it was done by a qualified mechanic. That said, a reason as to why the car is being sold is due to a repair or rebuild gone wrong and as a result, is financially unfeasible.

Myth # 3: another common perspective is that the older the car, the more problematic it can become and aren’t as enjoyable as newer cars. For example, you can buy a 1960s or 1970s Mercedes-Benz that was properly owned and meticulously maintained with high mileage, and it’ll last you a long time, granted the previous owner(s) took proper care of it (aha! Maintenance shows its importance again!). They are some of the best engineered automobiles, built to last in the world making them very reliable and not require too much maintenance. But once again, it very much does depend on the car and how well it was engineered and designed. However, the older you go you’ll find that there are less safety features on the car. Though, it is important that you don’t depend on 20 year-old airbags unless the entire system has been replaced and certified. Older American and some Japanese cars tend to be more problematic with rust and drivetrain and powertrain problems.

You should also set a criterion in which to apply when you look for used cars. The best details to look for is if the car has had no more than two owners; less than 150,000 miles, lower for some Japanese, American and European cars; in good to excellent condition (especially look for rust on a car, which can be a huge problem with the body on older cars) with a good or meticulously clean maintenance and service history; full service, maintenance and repair history and records (if not offered by the seller, obtain them through the manufacturer); all repairs and maintenance was performed with OEM parts (for example, if you buy a BMW, make sure all the parts and equipment is from BMW); and a clean CarFax report. You should also set a budget and should allocate a considerable amount of money towards service or repairs, because even though the service and repair history and CarFax reports could be as clean as whistle, you can still experience one or two minor mishaps, which is normal in most cases. It’s also not recommended that you buy a car that has been modified in terms of performance because you do not know if the car was modified properly and could cause you problems. To find out how much you should be paying for a particular car, a good reference site would be the National Automobile Dealer Association ( or Kelly Blue Book ( They offer a good idea of how much a car is worth, and can determine the value of the car by allowing you to enter how much mileage the car has and what the car comes with and what condition it is in. There are some cases, where cars are collectors that the NADA and the KBB do not apply very well to the price. You’d also want to buy a car that has a good residual value because if you would ever want to sell the car in the future, you wouldn’t lose too much money. It’s also a very simple equation when it comes to the value of a car. If a car came with more standard options, is rare in quantity and availability, has low mileage and is in good to excellent condition, any of those aspects can contribute to a more expensive car.

You can also look into CPO cars, or Certified Pre-Owned cars, where dealers take used cars or trade-ins and perform a rigorous test, set a high-standard criteria, repair and service everything that’s necessary, and basically they’re selling you a brand new car, just with some numbers on the odometer, figuratively speaking. So all the processes mentioned above are already done; however, the deals are usually let down by the dealers because they set the prices relatively higher than what the private market has to offer and in some cases isn’t worth it.

You now might be thinking what kind of cars the secondhand market has to offer and what you should be looking for. When it comes to what kind of car you maybe look for, that’s entirely your preference but for every manufacturer, there are certain and overall details that you should be aware of. The best cars that can be bought off the secondhand market are of German and Japanese manufacturers. They are simply some of the best and most well-engineered vehicles on the market and often feature amazing deals. For example, I was once looking at some late 1980s and early to mid-1990s BMWs and Mercedes-Benzes and ended up with a 1994 W124, E320 Coupe. The reason why is because they are very reliable, well-built, safe, and fun to drive. For example, was determined to purchase a 1987-1991 Mercedes-Benz 560SEL, which at the time was what is now known as the S-Class. It has a 5.6-liter V8, is very reliable and well-built, has leather seats, power seats, locks, windows, safety features like 3-point seatbelts, driver and passenger airbags, crumple zones, and traction control (all pioneered by Mercedes-Benz). The overall result is that the car is basically a tank and is very safe. At the time, it cost around $70-80,000 US, but now, you can purchase a good example between $3500 to $15,000 US, which is one hell of a deal. It has all the safety equipment that are offered in today’s cars and can be bought at a fraction of the original price. In addition, it’s a Mercedes-Benz. So who said a nice car has to be new? You can even get an early 1990s BMW 5-Series for around $7000-$20,000. But you should keep in mind, that European cars will be a considerably (depends on what kind of car) more expensive when it comes to maintenance, service and repair, simply because they're European. In that case, if your budget is the issue, don’t hesitate to look at Japanese cars. They are just as well built as some of their European counterparts, but could cost nearly half the amount it does to service or repair a European car.

I hope this article has given you a better idea of what the secondhand market is like and that it makes you more comfortable with buying a used car. Not only will it save you a lot of money if you get the right deal, you can get a really nice car for a fraction of what it cost brand new without having to spend a large sum of money. Also, be patient as there are a lot of cars in the secondhand market, you’ll always find something that interests you. Be patient, otherwise it could end up with a major headache and a hole in your wallet. It is critical that you do all the steps suggested in this article to get the best from a used car. Again, you can never be too thorough and you can never do too much research as it will definitely pay off in the long run and will protect you from seller fraud and scams.

~Chris Chin and Sawyer Sutton

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