Avoid Buying a Lemon Car – Two Simple But Critical Steps

There are plenty of things to keep in mind when buying a used car. We’ve talked about how to negotiate a great deal on a new or used car and the importance of comparison shopping (with AutoTempest!) None of that will help you though, if you skip these two crucial steps:

Step 1: Get a Vehicle History Report

Step 2: Have the Car Inspected

Bonus: Consider an Extended Warranty

We consider the first two steps absolutely critical for all car buyers. It just doesn’t make sense to risk many thousands of dollars to save the cost of a history report or inspection. Especially since they will likely pay for themselves in bargaining strength!

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Step 1: Get a Vehicle History Report

Vehicle inspection reports are inexpensive and contain a wealth of information about the used car you’re considering. The most important information you’ll find in any report is

• Registration records – Know if the used vehicle was imported from out of state (or country). Most importantly, find out immediately if the car is stolen. (Obviously unlikely, but important to know!)
• Vehicle title / branding (major accidents) – Know whether the car has been in a major accident. At the very least, you should take this into account when considering the purchase price. Also be aware that even if the car has been fully repaired, there may be lingering effects down the road, and its eventual resale value will be impacted as well. Inspection is even more critical in this case!
• Liens – How would you like to have your new car repossessed to cover the previous owner’s bad debts? If that doesn’t sound like fun, all the more reason to get a history report on the used car you’re considering.

Vehicle History Report Options

If the vehicles you’re interested in are being sold by a dealership, they will often provide a history report free of charge, so check first before buying one! If no history report is provided by the seller, AutoCheck and CarFax both provide comprehensive vehicle history reports.

AutoCheck and CarFax vehicle history reports provide detailed information on past odometer readings, ownership history, repair and maintenance history, liens and more. CarFax has wide recognition as the benchmark for vehicle history reports. AutoCheck provides a comprehensive score (called the ‘AutoCheck Score’) that helps you determine vehicle quality and compare cars at a glance, as well as any auction history a vehicle has. Both reports are priced similarly, though if you’re looking for reports on more than a few vehicles, AutoCheck provides better value.

Step 2: Have the Car Inspected

Once you’ve picked out a used car you want to buy, and verified that there are no problems on the vehicle history report, it is absolutely critical to have it inspected in detail for mechanical and safety issues.

The importance of a used car inspection

While a history report is inexpensive and will highlight many issues, it can’t tell you the current condition of the car. A detailed report from AutoCheck will list many past repairs, but a quality inspection can tell you about future ones. Hopefully my own story will illustrate how important that can be, and you can learn from my mistake.

When I was about 18, I scraped up enough money to replace my beat up, 20 year old Civic with a 1990 Toyota Supra Turbo. It was awesome (heck, those ‘90s Supras are still pretty sweet, and this was quite a while ago). It cost every cent I had. (Which was also obviously not wise, but that’s not the mistake I’m talking about here!) My mistake was, in my desire to save money, I skimped on both of the critical steps listed here. The one that bit me was that skipped vehicle inspection.

Now, I thoroughly test drove the car, tried out every feature and option, visually inspected it, even had a friend who rebuilt and raced cars take a look. But neither my friend nor I were certified mechanics, and none of our cursory tests could shed light on underlying mechanical problems.

About a month after I bought the car, the head gasket blew. The bill was $2400 that I didn’t have. A basic inspection prior to buying would have found the problem and saved me that money.

So, I can not say strongly enough, get a vehicle inspection. It’s not expensive, and it could easily save you from an expensive repair bill! What’s more, it will almost certainly pay for itself even if you don’t find any serious problems. How? A proper, thorough inspection will almost certainly find something about the car that isn’t in perfect shape. It’s normal with used cars for there to be some wear and tear. If you find the car’s minor issues before buying, you can use them as leverage in the negotiation process to get a better deal.

Used car inspection options

Most garages and service centers will offer some sort of pre-purchase inspection. Generally they are called something like “150-point inspection,” depending on how many points are checked and included in their report. Expect it to cost $100-200, depending on whether you go to a local garage or a dealership, and on what the vehicle inspection covers. Ideally you would like one that includes a compression test, which will check for internal engine leaks like my Supra’s head gasket problem. Also, if possible, try to choose a garage that has experience with the specific model you’re looking to buy. Enthusiast forums online can be a great source to find those shops. A specialized independent will often do a more thorough inspection, and possibly at a lower price, than a dealer, but it all depends on the specific shop. Some dealership service departments are great. Ask around!

The only time I would consider buying a used car without a full inspection now is if it were still under manufacturer warranty, and came with detailed service records. And honestly, even then, it really isn’t worth it for the very slight savings. Otherwise, like the history report, an inspection is a must.

Bonus: Consider an Extended Warranty

Extended warranties, also called vehicle service contracts, are basically a form of insurance. If you have plenty of emergency funds stashed away, there’s no need to worry about this, but if a major repair would leave you in a difficult situation and without a vehicle, a service contract might make sense. Even though your inspection will have identified any major issues with the used car and improved your chances of smooth sailing, sooner or later something expensive will break. Used car warranties aren’t cheap though, so it’s important to weigh your options and determine which plan, if any, is right for you. We get into extended warranties a little more thoroughly here.

One final tip: even if you are the warranty, best to avoid buying an exotic car that’s been totaled in a fire.

Recap

When buying a used car, don’t forget these two critical parts of the process. Not only are they inexpensive, but each has the potential to save you thousands of dollars and help avoid a number of major hassles.

• A vehicle history report
• A detailed inspection

An extended warranty may also be a wise investment, but it is obviously much more expensive when buying a used car, so you need to consider your specific situation. For more, see Are Extended Warranties on Cars Worth It?

Header image courtesy of frankieleon on Flickr.