subject: The Basics Of Used Car Sales [print this page] The more you know about the business of used car sales, the better prepared you will be to find a good value and strike a good deal on the purchase of a "previously owned vehicle."
Second hand car sales very closely resemble high-stakes games of Texas Hold 'Em, and you go into the game wagering between 10% and 15% of your monthly income that you can purchase a trouble-free used car. Your car salesperson wagers that he can persuade you to pay top dollar for his little "cream puff," turning a tidy profit for his boss and earning a handsome commission for himself. As you begin your play, remember the player's principal rule: There is no used car so absolutely wonderful that you cannot walk away from it. The cardinal rule has a corollary, too: If the sales person inquires, "What will it take for you to buy this car today ?" politely respond, "There's nothing you can do," and walk away. Nothing is more dangerous in this game than a false sense of urgency.
What you don't know will hurt you.
Before you jump into the game, do your maths homework. First, become familiar with the Kelley Blue Book, the authoritative listing of cars' wholesale and retail values, pretty much the go-to guide to used car sales. Set your budget according to your knowledge of Blue Book values, and steel your resolve that you will not exceed your budget. Similarly, look at competitive interest rates on loans for used car sales. If you can arrange your financing in advance of your purchase, you will have more leverage in the game. Be acutely aware that sales people want you to finance your car with their lenders, because they collect finders' fees for the loans they originate. The lenders' rates may be 10% higher than the banks' rates. Keep your poker face, and walk away.
Use your tools and resources.
Always request a "Carfax" report for your used car. Any reputable used car sales professional will show the Carfax or similar vehicle history unasked. If the salesperson cannot deliver the Carfax, you do not want the vehicle. Period. Not negotiable, Accept no substitutes. The Carfax gives you a detailed report of the vehicle's history, especially alerting you to major repairs, recall service, or accidents. Exercise extreme caution about buying a car that has been in an accident, because even small collisions sometimes can inflict major damage on a small car.
Take an extra step most used car sales people will not expect: Request the vehicle's service manual, demanding proof that the previous owner or the dealer has completed routine service either as it was required or in anticipation of the sale. Especially look at the "big ticket" service items, paying attention to the car's total mileage as you run-down the checklists at each required service interval. At 100,000 miles, for example, most fine European touring sedans and their Japanese counterparts need new timing belts; has this work been done? You may hold out to make it a condition of the sale. Many fine European and Asian cars require brake replacements every 50,000 miles; has this work been done? Also pay attention to parts and features for which different brands have become notorious. BMW's are hard on fuel and water pumps. Clutches on Toyotas tend to wear-out easily. The power windows on Audis frequently fall off their tracks. Make certain that the used car sales person can prove the car is in perfect working order or will make arrangements to fix it.
Also use your resources to protect yourself against problems after the sale. Invest in an extended warranty or "repair insurance." If you purchase your second car from a dealer, find out if he sells extended warranties, looking carefully at what long-term protection entails and how much it costs. Compare the dealer's offerings with similar policies from independent insurance brokers, ultimately choosing "service insurance" that will cover the major costs of maintaining and repairing your used car.
