Used cars: No second-guessing

Your guide to buying without feeling used

ENID MITCHELL'S HEART was set on a new car when she went shopping last fall to replace her 1987 Chrysler LeBaron. But one look at a 1994 Saturn (17,000 miles, moon roof, white with nifty gold pinstripe) and she was in love. The price also helped: $11,500, or about $2,500 less than she would have paid new. "I have no doubts about buying used cars at all," says Mitchell, 34, of Randolph, N.J., an administrator for Nabisco.

Now is prime time for new-car buyers to take the plunge, as dealers try to clear their lots of 1996 models to make way for '97s. But used cars may be worth a serious look. Buying a "previously owned" car no longer means inheriting someone else's rust bucket.

About 30 million used cars will be sold in the USA this year, double the number of new cars. Fueling the used-car market: the fact that the average price of a new car is fast approaching a hefty $20,000, and the improved quality and reliability of old cars. Plus, the popularity of leasing (about a third of new cars are leased) guarantees a pool of relatively low-mileage, one-owner cars that have been well cared for.

Because the average car loses 65-70 percent of its value in the first five years, says W James Bragg, author of Car Buyer's and Leaser's Negotiating Bible, you're letting the first owner take the biggest depreciation hit when you buy secondhand.

Of course, no two used cars arc alike. This makes buying used more complicated, and riskier. "It's still buyer beware," says Lesley Hazleton, the author of Everything Women Always Wanted to KiLow About Cars. Reducing your risk of buying a clunker takes work, but it can pay off handsomely. "If you spend a couple of weekends out shopping for a two-year-old Lexus instead of buying a new one, you can save $8,000," says James Boerger, owner of the car-buying service Consumers Automotive.

To increase your chances of getting a good deal:

Research. Once you've decided how much you can spend, check out the April issue of Consumer Reports, which annually ranks used cars by reliability. Pick a couple you like, then check several used-car guides, such as Edmund's Used Car prices, for the cars' retail and wholesale values in your area.

Shop around. The best used cars are found at new-car dealers, which have first dibs on low-mileage, one-owner leased cars being returned after two or three years. Carmakers often recondition these cars and offer an extended warranty. Used-car superstores (Car-Max, AutoNation USA, Driver's Mart) are also popping up nationwide, with huge selections and no-dicker pricing. Generally, used-car dealers have lower prices than new-car dealers or superstores, but many of their cars come from corporate or rental fleets, which suffer above-average wear and tear. You may get the best deal by buying a car privately. Ask friends, relatives and your mechanic if they know any sellers. But be aware you may have no recourse if the car turns out to have problems.

Negotiate wisely. Never be in a hurry to buy, and test-drive thoroughly -up hills, on highways, etc. Armed with your knowledge of the wholesale and retail price of the car you want, offer the salesperson 85 percent of the asking price. Settle on no more than 90 percent. Before the deal is final, get a written history of the car, including service records, the name of the previous owner or owners, and how it was driven. Finally, spend $60~$100 to have an independent mechanic check the car thoroughly. Major problems, such as accident dam-age or rusting, should nix the deal. Minor problems can be negotiating points.


Along with sales, fraud is growing in the used-car market. What to watch out for:

Lemons. All states have lemon laws, but same are less effective than others. Low-mileage vehicles touted as "demonstrator" or "executive" cars may be lemons being passed off as cream puffs. Be careful of cars shipped from out of state, and when you shop at a dealer, ask to speak to the original owner and to see copies of the repair history. If a car has a sticker reading "manufacturer's buyback," it's very likely a dud. To learn if a car was resold, contact your state motor vehicles department. Or call Carfax, which can track down a car's original title in most states(1-800-346-3846; $20 fee).

Odometer fraud is on the rise, reports the federal government. Fraud ring roll back odometers, tamper with titles and bilk consumers for as much as $3,000 per car. Take the car you're considering, even if the seller is a private individual, to a reliable mechanic, who can determine whether the wear and tear jibes with the odometer reading.

By Julia Lawlor
Consumer Advice, USA Weekend, Oct. 4 - 6, 1996