Where To Buy a Used Car

Used Cars – Where to Buy

Used cars are sold through a variety of markets or privately.

Privately

Positives:

• Can be the least expensive of all markets
• Can test drive the vehicle

Negatives:

• No cooling off period
• No warranty – cars are sold “as is”
• You need to be sure the car has clear title
• No financing

Used Car Dealership

Positives:

• Offers you the most legal protection
• Allows a cooling off period
• Can provide financing
• Dealership must provide clear title
• Can test drive the vehicle
• Offers service facilities

Negatives:

• Can be more expensive than buying privately
• Negotiating the price can be stressful

Independent Lots

Positives:

• Can be less expensive
• Can test drive the vehicle

Negatives:

• No service facilities
• Negotiating the price can be stressful
• If a warranty is offered, the local mechanic will perform the warranty repairs
• If they offer financing, their rates are usually higher than at banks or credit unions

Used Car Superstore

Positives:

• They must provide clear title
• Fixed car pricing so no high-pressure sales tactics
• Hundreds of cars from many top car brands, from Acura to Volvo, all on one lot
• Computer-assisted selection of cars
• Allows a cooling off period
• Can provide financing

Negatives:

• Sales people can be relatively uninformed
• Pricing is generally higher than a car dealership
• They cannot provide information about previous owners

Car Auction

A public sale where the cars are sold to the highest bidder.

Positives:

• They must provide clear title (but sometimes they only do a “bare bones” check and sometimes they say the will deliver the title later)
• Significant savings

Negatives:

• No warranty - Cars are sold “as is”
• No time to check the car’s history
• No time to have the car checked by a mechanic
• Cannot test drive
• Final price is more than the winning bid. It always includes a buyer's premium which can be an additional 5% to 10%.

Rental Agencies

Positives:

• They must provide clear title
• Cars are usually only one or two years old
• Cars include the balance of the manufacturer’s warranty
• Cars are usually well maintained
• Service records are generally available

Negatives:

• No trade-ins are accepted
• No financing
• Renters are not always careful with the cars since they don't own them
• Often come with the "bare bones," few options

A Few Tips about Buying from a Private Party

If you purchase a used car from a private party, the paperwork required to complete the sale can greatly vary depending upon the state in which you live. Before you head out to the DMV (Department of Motor Vehicles) and before you pay for the vehicle, find out what documents you need.

Here are a few words of advice:

• Have the seller provide a Bill of Sale. It is your legal right to the car, before ownership is transferred, and it is the receipt you'll need as a proof of purchase when you pay the taxes. The "Bill of Sale" should have:

• The total purchase price of the car
• The date of sale
• Your name, addresses and driver's license number
• The sellers, name, address and driver’s license number
• A description of the car, such as: VIN (Vehicle Identification Number), year, make, model, make, color, etc.
• Odometer reading
• Get it notarized!

• When you buy from a private-party the sale will not include the sales tax. The tax is paid to the DMV when you go in to register your new car.

• The buyer and seller should go to the DMV together. Do all exchanges of money at the DMV.

• When you go to the DMV, take proof of insurance, the bill of sale and title. You’ll need them to register your new car.

• Make sure the VIN on the car matches the VIN on the title.

• Ensure that the name on the title is the same as the seller.

• If the seller doesn't have the car's title to sign over to you, this means it's not paid off and their lender holds the title. You need a title to register a car. Call the lender to determine the best way to handle the transfer of ownership. NEVER take possession of a used car without having the title!