Purchasing a used car requires time and effort to ensure you are getting the best deal possible. Not all used car dealers are honest about a vehicle's history and by the time you realize there is a problem with your newly purchased car it could be too late. Before you begin shopping around for a used car, do your homework to fully understand what to look for in a specific type of vehicle or with a particular dealership.
Buyers Guide
The Federal Trade Commission mandates that all used cars sold from a dealership come with a buyer's guide. The buyer's guide is a resource consumers may reference during the purchase process. The guide describes whether the vehicle is being sold as-is or if it comes with a warranty. It also details what costs the dealership is responsible for under the warranty. The buyers guide explains the mechanical and electrical systems of the car and what problems the consumer should look out for. Once the sale is complete, the buyer's guide becomes apart of the sales contract. It should reflect any warranty negotiations as well as spoken promises between the consumer and the dealership.
Vehicle Warranty
Warranties are an important part of a used car sale. A warranty is a limited guarantee that a vehicle will function properly for a specified period of time and if it does not, the dealership would cover the cost of fixing it. There are several types of warranties and consumers should become familiar with the type of warranty associated with a particular used car. According to the FTC, an implied warranty is an unspoken, unwritten promise from the seller to the buyer. With an implied warranty, it is assumed that the vehicle meets reasonable quality standards. Unfortunately for the consumer, dealerships can sell vehicles "as-is" to eliminate implied warranties, so it is necessary to fully inspect and test drive a vehicle prior to purchasing it.
A full warranty is offered through the car manufacturer. Warranty services apply to anyone who ones the vehicle during the warranty period. Full warranties will typically pay the cost to repair or replace a covered vehicle system. Limited warranties cover some vehicle systems for a specified period of time. The dealer must inform the consumer what type of warranty applies or if no warranty is offered for a particular used vehicle.
Financing Options
Consumers may pay cash for a used vehicle or finance the vehicle purchase. Financing the vehicle increases the total cost of the car because interest and other loan costs are included in the payments. It is important for consumers to shop around for the best loan program to avoid paying too much for a used vehicle.
Dealerships, banks, credit unions and other lenders offer different loan programs for car-buying consumers. All loans have different terms and payment options. When financing a used car, consumers should fully understand the vehicle purchase price, the exact finance amount, financing charges, interest rates, number of payments and the total sales price after all payments are calculated.
Private Sales
Used vehicles are often sold by private owners. Individuals are not bound by the same used car rules as dealerships so consumers should be aware of potential drawbacks to buying a car from a private party. Private vehicles are sold on an as-is basis. There are no warranties if the vehicle does not operate properly. Consumers should find out as much information as possible about the vehicle before making a purchase. Private sellers who sell a vehicle in good faith should have no problems providing the buyer with all the information they need to make an informed buying decision.
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