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Wednesday, April 30, 2014

Provident Living: Some Practical Tips on Used Cars

While visiting family in Utah, I spent a good amount of time helping a son buy a used car. Here I'd like to share a few experiences that might help others dealing with cars and car dealers. Not directly relevant to Mormonism, though the themes of being frugal, living providently, and being able to help others do so are among the practical parts of our faith. Come on, home teachers, make sure your people don't get ripped off when they buy cars. 
One hot trend in Utah and elsewhere is the selling of salvaged cars. This includes cars that were totaled in an accident. While the insurance company determined that the car was too badly damaged to ever be properly repaired, rebuilders can buy these scrapped vehicles and fix them up so they look great. They can then be resold for much less than the normal value of the undamaged car. The title report (accident report) from sources like Carfax.com should show that the car is salvaged, which should be a huge red flag to knowledgable buyers. The rebuilt car may look great, but it's hard to know what structural damage is still there. The frame may be twisted so the car won't handle safely at high speed or won't provide proper protection in an accident. There may be engine or transmission damage that won't show up until later. Many insurance companies won't insure a rebuilt, salvaged car. It is best to avoid them. Unfortunately, many buyers don't know this yet. 

One of the common scams that we ran into 3 times (a high percentage of the cars we examined) involves a "mistake" from the dealer in the listed VIN number. Often one digit is changed in a published listing so that a would-be buyer can't quickly see the accident report. If there is an error, walk away from the car and probably from the dealer. We found even significant, notable dealerships offering salvaged cars with errors in reported VINs. Beware. 

If someone tries to sell you a car but says they have lost the title, walk away. It may be because they are trying to hide the fact that the title will show it has been rebuilt or highly damaged. The title may also have been "washed" by registering it in multiple states until someone fails to include the salvage/junk annotation on the title. Don't rely on the title alone: be sure to get the title report from the dealer (many good dealers provide them) or run a vehicle history report from Carfax or other reputable source. Beware the scams of "free title report" sites that only give you a little bit of information and require you to pay to get the actual report. Just go straight to a reputable commercial report. 

At the point of buying it, used car dealers will try to sell you an extended warranty from a third party. Don't make my mistake of buying one, only to realize later that it is not a fair value because it comes with so many loopholes that it will be difficult to ever use. Save that money for future repairs and just maintain your car carefully. (Update: Fortunately the dealership, Forrest Motors in Orem, was kind and allowed me to change my mind on the warranty two days after buying it. No pressure, no trouble. We ended up with one year of extended warranty instead of three, and got a refund for two years of coverage. There's a reason why I kept one year of coverage which I won't share here, but I think that was the right thing in this situation.) 

Be wise. Do your research. Buy a reliable car and spend your money wisely. Watch for warning signs of dishonest dealers and be ready to walk away. Don't let high-pressure techniques and smiling faces lure you into buying something over your budget or at an unfair price. Business is always best when done with honest, fair people, but even then, be prepared for somethings to go wrong.






5 comments:

Anonymous said...

I buy off lease missionary cars. You have to have a cashier's check in the complete amount. You are however assured that the car is well maintained. I currently drive a Mazda 3 previously driven by sister missionaries. My lovely wife drives a mission president's Toyota Avalon.

Glenn Thigpen said...

Jeff,
I don't know what the laws are in Utah as to salvage vehicles, but in North Carolina one can often pick up a bargain via the salvage title route. Used car dealers here have to know the history of a car and must notify a buyer that the title is salvage. A rebuilder must enumerate the parts that were used and any frame damage that was repaired.
Hefty fines, which include repurchasing the vehicle can be levied for selling a vehicle with a salvage title without full disclosure. The dealer can be fined and sued even if he/she did not know that the title was branded.
An NC vehicle that has suffered damages equal to 25% of the fair market value are required to have a salvage title. Often the damage is mostly cosmetic in nature.
To me, the best option in buying any used car is having it checked out by a knowledgeable mechanic who is up on the latest computer diagnostics. I have found that there are more hidden problems in the emission and computer control systems than there are mechanical problems.
Just my two cents worth. And I got a pay raise. My wife is now offering me a dime for my thoughts.

Glenn

Zerabp said...

I just want to add never ever tell them how much you are willing to spend.

Always make an extremely ridiculously low-ball offer, and only grudgingly give them headway until they reach the price you were hoping to pay.

Never let them run your credit. If you are using credit to purchase have financing secured in advance. Do not tell them where you secured financing.

If you bring any notes or papers from car manufacturers or bluebook as to the value of the vehicle you are interested do not let them take the papers away from the negotiation table, they will conveniently lose them.

During the test drive make sure to run the heat, AC, radio, roll windows up and down. Test the dome lights etc.

Angela Navejas said...

This is really nice blog in which we found some important tips for our used car such as how to salvage the car.

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Junk Car CFA said...

You have some great information here on used cars. Will you be doing anything related to junk cars or any type of junk autos in the future. I have a junk car removal blog for orlando, FL and I would like to share some of your information.