The year is 2013. I’m at work when my phone rings. It’s my car insurance company, telling me that the “minor” accident I was in the day before left my car deemed a total loss. What was I supposed to do now? Obviously, buy a new car, but how? The next two weeks promised to be one of the most challenging seasons of my life, and cultivated a whole new skill to add to my toolbelt: how to buy a used car.
This is the information I wish I had when I was going through this process.
Myth: Buying a “certified pre-owned vehicle” is safer than buying a used car from a private party. Certified pre-owned simply means that it’s cleared a pre-purchase such and such point inspection and is under warranty. You can easily get this same inspection done by an independent mechanic and many used cars are still under warranty by the car manufacturer.
Here we go:
Step 1: Get a really clear idea of the make, model and year that you want.
Step 2: Scour Craigslist for that particular car, and when you find one you like, set-up a test drive in a public place. Shopping center parking lots work great! Bring someone with you!
Step 3: Things to ask the owner at the test drive:
- Do you have the title in hand, or is it still being financed?
- If they have the title, ask to see it. Confirm that the people’s names who are on the title are the people you’re standing next to.
- Do you have the service records? Can I see them?
Step 4: Write down the VIN number during the test drive (it can be found inside the drivers side door), and run a Carfax report. This will show you all the maintenance records (including ones done at independent mechanics) and accident reports. If regular oil changes and maintenance are not showing up, red flag!
Step 5: Look up the Kelly Blue Book value on the car to determine your offer price.
Step 6: Call up the owner and offer said amount. Don’t lowball - that’s not cool!
Step 7: When price is agreed upon, remind the owner that it’s their responsibility to have the car smogged and to send you the results. Have a cashier’s check made out for the agreed upon amount, or bring cash.
Tip: If you are selling your car, I would highly recommend only accepting cash. Contrary to popular belief, Cashier’s checks are not the same as cash and you can still be scammed. Fraudulent cashier’s checks can take weeks to be spotted by the bank, and by then the scammer is long gone with your car. If they can pull out the money to order a cashier’s check, they can pull out the cash itself. Or, you can meet the buyer at the bank and watch them get the cashier’s check.
Step 8a: ALWAYS get the car checked out by an independent mechanic of your choosing, and be present at the inspection. It will cost you $30-$150 and a few inconvenient hours of your life, but it is a whole lot cheaper than buying a lemon.
Tip: agree to meet the owner with the car at the mechanic, and once it passes inspection, do the deal right there!
Step 8b: If the car is still being financed, the owner will not have the title, they will have to get it from the bank and mail it to you. This is still a fairly simple process, but will probably require going to the lending institution together, having the buyer pay them and they hand over the title. I would suggest having the seller call their lending institution to confirm the best way to handle this.
Step 9a: Both you and the seller sign and date the back of the title. You take the title and give the seller the money.
Step 9b (optional): You can bring along a Bill of Sale to have both of you sign as well. This is not necessary if the title is being signed and handed over, but it’s a precautionary measure to take and good to have for your records.
Pro Tip: AAA is an amazing resource for buying and selling cars to/from private parties. If you’re feeling uneasy, give them a call and they will walk you through all the steps and forms.