Chapter 6- Considering an "Experienced" Car?

What's a Used Car Worth?

Even those who know next to nothing about cars will tell you to consult the blue book to find out what a used car's value is. But don't be thrown when you discover that the blue book is orange. The book's actual title is the "National Automobile Dealers Association's (NADA) Used Car Guide," and it's pocket-sized. Other guides also exist, including "Edmund's Used Car Prices." NADA's blue book can be found at the library but not at most bookstores. Edmund's may be found in both places. Car prices may vary between these books, but the dealers and most loan officers go by NADA's guide, so it's your best bet. If you have Internet access, try Kelly's Blue Book on-line. The Web site will ask you questions about the car, and then give you a likely price. The Web site address is: http://www.kbb.com/.

The blue book shows the average trade-in price, average loan price and average retail price for each model car by year. If the car is older than seven years, look it up in the "NADA Older Used Car Guide."

The guides offer estimates only. Naturally, if the car you're purchasing was stampeded by elephants escaping the zoo, its value will be lower than what NADA lists. And don't buy the first car you look at. Comparison shop to get a feel for prices in your market.

Three Ways to Get What You Pay For

When buying a used car, you need to be even more diligent about making sure you're getting your money's worth than when you're buying a new car. New cars are expected to work perfectly. Used cars come with a history of accidents, repairs, rattles, dents and dings.

Following these three important steps will help protect you from being fleeced when buying a used car:

• Check the reputation of the seller,

• Obtain the title information, and

• Have the car inspected by a mechanic and a body expert.

Although you can't guarantee that you'll know everything about the car if you take these steps, you'll have gone a long way toward it.

Check the Reputation of the Seller

Although it isn't possible to check the reputation of a private individual, you can check out a dealer. You should find out the following:

• How long has the dealership been in business?

• How does the Better Business Bureau rate it?

• Has it been sued by the state Attorney General? If so, why?

All these questions should be answered to help you feel secure that the dealer will honor any contract you sign.

Obtain Title Information

The title is like a résumé of your car's life, indicating how many miles it may have on it and if it is a prior salvaged vehicle. To get title information, contact the Department of Public Safety Driver and Vehicle Services Division, Motor Vehicle Records, at (651) 296-6911 and the TTY number is (651) 282-6555. The Department of Public Safety can verify if the car was salvaged and the odometer reading. You can also demand this information from the dealer. When a care is sold to a dealership, that dealership takes control of the title. Nothing prevents the dealership from showing you that title.

1. If the car was totaled

By Minnesota law, the title must be stamped "prior salvage" if the car was totaled and then rebuilt anytime after June 1993. If this is the case, you'll want to check that everything was put on the car when it was rebuilt. A previously totaled car may not be as structurally sound as another car. Have the car checked at a body shop before you decide to buy it.

2. Odometer readings

The lower the mileage, the higher the price for the seller. It's no wonder billions of dollars are bilked from consumers every year by sellers who turn back the miles on odometers.

Have Questions? Contact the Previous Owner

You are entitled to contact a car's past owner. If any seller says that the owner's
name can't be provided — or even that the Attorney General doesn't allow it —
show them this! You have a right to contact the owner.

Because about 90 percent of odometers that are rolled back come from other states, you should research out-of-state vehicles thoroughly. To get a copy of the title, you'll need to contact the Department of Motor Vehicles in the state where the former owner lives.

Have a Complete Maintenance and Body Check

Even if the previous owner and dealer seem trustworthy, and say there's nothing wrong with the car, have the car completely inspected by a qualified auto repair shop. Salespeople aren't mechanics.

You can take the car to a gas station mechanic or to a diagnostic center. A body shop is also a good place to stop to see if the car has had body damage or has been in an accident. If the owner won't allow you to have the car inspected, take your business elsewhere.

Your Personal Inspection

Your inspection will not replace a mechanic's inspection, but you can eliminate obviously poor vehicles with a few tools and a little know-how.

You'll need to get down and dirty to do this inspection, so wear old clothes and work gloves. If that isn't your style, find a mechanically-minded friend to go with you. It's also a good idea to bring a friend to help you check the lights and exhaust when you start the car, to offer opinions on seat comfort and for moral support.

Your Tool Kit

When you're used-car shopping, you'll need to carry the following to make your own inspection:

• Flashlight — to look for rust in dark places such as wheel wells and for inspecting under the hood.

• Rags — to check the oil and other fluids and to clean your hands.

• Magnet — to detect panels filled with plastic body filler, indicating the car was in an accident. The magnet will not be attracted by plastic.

• Notebook and pen — to write down your findings so you can compare the cars you're considering.

What to Look at

1. Look for leaks.

With the engine off, check the pavement under the car. A wet black stain means leaking oil. A reddish stain is transmission fluid or power steering fluid. If the stain is colorless or green, it could be a leak in the cooling system. A colored stain could also mean leaking break fluid. A clear leak that smells like gas probably is gas and could signify a fuel system leak. Don't linger over the spill because gas is toxic to breathe and highly flammable.

2. Check the radiator.

Never take the cap off a hot radiator. If the radiator is cool to the touch, remove the cap and inspect the water or coolant. If it looks rusty, that could mean corrosion in the cooling system. Next, look for oil in the radiator. It usually appears as a shiny film floating on top of the water or coolant. If you see oil in the radiator, the car probably has an extremely serious problem such as a cracked head or head gasket leak.

3. Check the battery.

Look for cracks and leaks. Find out how old the battery is. You can check the cell's fluid level in older batteries. If the plates in the battery aren't covered by fluid, the battery hasn't been properly maintained. This is an indication that the rest of the vehicle may not have been well-maintained, either.

4. Check the dipsticks.

Look at the engine oil dipstick. A low oil level could mean the previous owner didn't maintain the car regularly. Or it could be a sign that the car burns too much oil. If the oil is gummy or dirty, it hasn't been changed often enough and the engine could be badly worn out.

Next, check the transmission dipstick while the car is idling. A low fluid level may indicate a leaking transmission. New fluid is red. Discolored fluid could indicate a transmission problem, but it doesn't always mean trouble. If the fluid smells burnt or is discolored, have a mechanic check it out before you buy the car.

5. Test the shock absorbers and struts.

Push down on each corner of the car. The car should not bounce more than twice. If it does, the shocks and struts need to be replaced. Remember that they are installed in pairs, so even if only one corner of the car fails the bounce test, you will have to buy at least two new shock absorbers or struts.

6. Check the tires.

Make sure the "wear bars" in the tread depressions don't show through. If they do, the tires must be replaced immediately. If the tires are worn unevenly, particularly if one side of the tread is more bald than the other, the car probably needs an alignment. Be sure to check the spare tire. Often, a seller puts an old tire in the trunk, so even if the mounted tires are new, you can examine the wear patterns on the spare. If you think the car needs to be aligned, consult a mechanic before buying it. The problem could be minor, but it also could indicate the car has been in an accident and will never align properly, or that other important parts such as the tie rods and ball joints need to be replaced.

7. Check the tailpipe.

Run your finger around the inside of the tailpipe. Assuming the car does not have a diesel engine, it probably burns too much oil if the residue inside the pipe is greasy or sticky. White or gray powder, however, is nothing to worry about.

8. Watch the dashboard lights.

Now you're ready to turn the ignition key to the first position. Make sure the alternator, oil pressure and "check engine" lights go on. If they don't, it could mean a bulb needs to be replaced. Or it could mean that the seller has deliberately disconnected the lights to prevent them from signaling mechanical trouble. Start the engine. Now the lights should go out. If they don't, the car could have a problem with the systems indicated.

9. Let the engine idle.

With the car in park, raise the hood and listen to the engine. If you hear a loud noise that sounds like a sewing machine, the car may need a valve job. Step on the accelerator and rev the engine. If you hear a rumbling or hammering sound, the rods or bearings may be bad. Either way, that can spell expensive repairs.

10. Look at the exhaust smoke.

With the engine warm and running but still in park, press down on the accelerator and look in the rearview mirror. If the smoke from the exhaust is white, it's generally a bad sign. It might be only water vapor, but it could be a warning of a cracked engine block, head or head gasket. Likewise, blue smoke can mean the car has bad piston rings or needs an expensive valve job. Black smoke means a too-rich mixture of gas to air, sometimes fixable with a simple adjustment, other times requiring an expensive sensor or computer repair. Under normal weather conditions, the smoke should be clear and colorless when the engine is warm.

11. Test the exhaust system.

A rumbling noise from under the car but not under the hood is an indication of a substantial exhaust leak. Have a mechanic check to see if the exhaust system needs work or if the muffler needs replacement.

12. Test the brakes.

If the car has power brakes, step down on the brake pedal with the engine running. You should not be able to push the pedal all the way to the floor. It's a bad sign if there is less than a 1 1/2-inch clearance. Don't just tap the brakes. Hold your foot in place for a minute or more to be sure the brakes don't give way or feel mushy.

Test Driving a Used Car

Don't let the owner take you for a ride! Insist on getting behind the wheel yourself for the test drive. Drive over hills, on city streets and on freeways. Make sure the car doesn't pull to one side. Brake the car and check to see that the brakes don't lose pressure when you press hard on them.

If the car has an automatic transmission, see if it shifts smoothly. Drive forward and backward in an empty lot to see if there's any noise or slippage. And be sure to turn off the radio while driving so you

Can You Read Between the Odometer's Lines?

Let's say you answer an ad for a 10-year-old car with only 50,000 miles. That's considered a "cream puff" in the industry because it has far less mileage than you'd expect for a car its age. Mr. Al Smiles, who's selling the car, is looking to grease his palm. He tells you the car was driven by a little old lady who just went to the grocery store and back. How would you check out his story?

First of all, realize that by rolling back the odometer, also called "whipping" or "busting" miles, Mr. Smiles can make a big profit. An average of more than $1,000 is added to the price of cars with rolled-back odometers, according to the National Highway Traffic Safety Administration. Odometer fraud rips off customers by as much as $3 billion a year.

By law, all sellers, private or otherwise, are required to verify that the odometer reading is accurate to the best of their knowledge. If Mr. Smiles knows the mileage is higher than the odometer reading either because of the odometer's mechanical limits or because of odometer tampering, he must disclose this. The law states that the seller must provide this information for all vehicles, except those that are 10 years old or older, exceed 16,000 pounds or are not self-propelled — such as trailers or other pulled vehicles.

Signs of Odometer Tampering

If Mr. Smiles isn't forthcoming with information, check the following for signs that the mileage shown on the car is wrong:

• Numbers on the odometer look misaligned or the odometer doesn't work.

• Missing screws or loose parts on the dashboard, indicating the odometer has been disassembled.

• Unusual wear on the brake pedal, carpet and driver's seat, suggesting more extensive use of the car than the mileage reading indicates.

• Non-original or mismatched tires on cars with odometer readings under 30,000 miles. Such vehicles should have the original tires and all the tires should be of the same brand and model.

• Old dated oil-change stickers on the door jambs showing mileage inconsistent with the current reading.

• Old dated repair orders or inspection certificates in the glove compartment, under the seat or in the trunk, showing mileage inconsistent with the current reading.

• A recent title, a title stamped "duplicate" or a title issued in another state.

• A short ownership time of perhaps a month or less. The "date issued" section on the title will tell you how long the last owner had the car. Short ownership may indicate that a dishonest dealer put the car in a spouse's or friend's name and then rolled back the odometer before reselling the car. The spouse or friend will most likely verify the false reading if you call to inquire about it.

can listen for strange sounds coming from the engine. Finally, if the test drive was scheduled ahead of time and the owner warmed up the engine, be suspicious. A warm engine can conceal many flaws.

Final Issues

If you've decided on a car you want, then make a bid. It's a good idea to review the strategies in Chapter 5 before negotiating the sale.

If the car comes with a warranty, check it over. Read about used car warranties in Chapter 8. Finally, get ready to sign the contract. The car may soon be yours!

Signing the Contract

Before you sign, take out your magnifying glass — or whatever it takes — to help you read the fine print on your purchase contract. Sure, sure, everyone says that. So what specifically should you look for on a used-car contract?

See if the warranty is noted and that you receive a completed copy of the buyer's guide.

Make sure any agreements you made with the seller to repair the car as a condition of the sale are written into the contract.

Check that it's in writing that the dealer has completed all federal government safety recall service needed for the car.

Make sure all blank lines are filled in on the contract.

Remember, there is no three-day cooling-off period for car sales!