Buying a used car? Here's everything you should know



Some of us of a certain age will forever associate used cars with the 1980 comedy of the same name.


Particularly memorable is Kurt Russell’s performance as master salesman Rudy Russo. When a hapless would-be customer informs Rudy that he’s “just looking,” Rudy is unfazed and delivers the following pitch without taking a breath:

Oh, hey: Terrific. Terrific, that’s what we’re here for, Stan. Here you can look, browse, peek, touch, feel, taste, smell — do anything you want, take all the time you want — nobody’s gonna pressure anyone around here, Stan. … You know something, though, Stan? I really think you gotta buy that car. I think you gotta buy it today, right now, you wanna know why? Cause that Buick is you. The color is you. Look at it: That is your car. Stanley Kowalski IS Buick Centurion Convertible. Now I know what you’re thinkin’, Stan. You’re thinkin,’ “Can I afford to buy a car like this?” Huh? Am I right? Seriously, Stan, you can’t afford NOT to buy a car like this. Now I’m gonna make it easy for ya: You add this whole thing up, you take in account inflation rates, insurance savings, gas savings, ease and comfort, and you’re gonna come out ten thousand dollars ahead just for making this deal. Well, hell! The prestige alone at owning a Buick Centurion Convertible can’t be measured in terms of dollars and cents, am I right?

The consumer who is “just looking” today is obviously in a much better position to outfox the Rudy Russos of the world. Here Align car expert Lauren Fix tells us everything you need to know about buying used.

— Matt Himes

See what’s out there

There’s a website called ISeeCars. It’s sort of like a consolidation site, and they do a lot of research. And when you look at the used car prices, they’re going to have the most current used car pricing on what’s a good deal, what’s a bad deal. They have some buying guides as well.

Certified pre-owned or used?

What I really want you to think about is am I looking for a certified pre-owned or used car?

You don’t have to finance with the dealer. Use a credit union. Credit unions have great rates. You join on the spot. It costs nothing. They want to work with you.

Obviously it’s based on how much money you have. But if you’re thinking I really want a reliable used car, these new cars, all this newfangled technology, I want someone else to deal with the headache. So by the time it gets to me, the headache’s gone. They take the depreciation and I get a great deal on a vehicle.

Say you want a Volkswagen. Then you go to a Volkswagen dealership and look for what’s called a CPO or a certified pre -owned. You want a Ford? You want a Ford dealer. You want a Hyundai? You want a Hyundai dealer. You want a Mazda? Go to a Mazda dealer. You can get a CPO from a lot of different brands.

Buying a CPO from the dealer

Let’s say you go to your favorite GM dealer and you want to buy a Chevy Cruze.

It’s a few years old, and it’s a CPO, which means it’s got low mileage, they’ve checked it out, they’ve done all the upgrades for the technology, for the technical service bulletins, any recalls, all that’s done. And they’ll extend the warranty and transfer it to you. Major bonus.

Buying a CPO from a different dealer

Now if you go to a Honda dealer, and you see a Nissan in the lot and it’s certified pre-owned, it’s not going to have all that.

They will give you a warranty, typically 90 days, but that’s about it.

You’re not going to get the technical service bulletins done. In most cases, you’re not going to get the recalls done (unless it’s a recall they have to do, like an airbag or an ignition switch). That’s on you to go to that dealer and get it done. And time is money for everybody.

Now, certified pre-owners are not all the same. They all have different checklists of what they cover and what they don’t.

The secret of high-end CPOs

You can go to a Porsche dealer and see a 2019 listed as a certified pre-owned. Most other brands only offer CPOs from the last two or three years.

If a car is modified in any way that changes the look or the functionality of the car (timing, ignition, computer, exhaust), then that’s used.

However, you could find a car like the one I got. I went to a Porsche dealer, and they had it on the lot as a CPO: 2019, with 5,000 miles. Because it was unmodified. They’ll extend the warranty to you for another three years. Plus you get maintenance — no one’s covering that. An oil change on a Porsche (I happen to own a Cayenne) is around $1,100. So if that’s included, I’m in.

The other brand that does this is Ferrari. Now, not everyone can afford a Ferrari. But if you’re thinking, I’ve got the money, and I’ve been waiting and waiting and waiting, and this is the car I want, well, these cars aren’t necessarily half a million dollars. You can buy one for $100,000.

It’s a lot of money. I get it. It’s not for everybody. But if you’ve got $100,000 and you’ve always wanted a Ferrari, buy it at the dealer.

If you buy it from some independent guy, because he’s got it and the price seems right and the color was what you wanted, and he can do the financing and all that, here’s what you won’t get: no warranty extension, no maintenance extension.

Whereas Ferrari gives you a seven-year warranty. In other words, they want you to come back to the Ferrari dealer. As with Porsche, If the car is modified, there’s no certified pre-owned.

A friend of mine just bought a brand-new Ferrari 488. 2019, but it’s basically new: 2,000 miles on it. Really nice car. My friend got the seven-year extended warranty and three years of free maintenance. Now can you imagine what maintenance costs on a Ferrari?

Now back to reality …

Longest used car warranties

Hyundai and Kia and Genesis have 10-year, 100,000-mile warranty. That’s gonna be your longest. Super beneficial to those who are keeping the car. You have a problem, you go back to the dealer, even if you didn’t buy it from that dealer. The warranty extends.

Volkswagen and the other German brands are the only other companies that offer warranties longer than three years. They’ll give you four years, 50,000 miles.

Let’s say you’re looking at an old VW Golf, you think, this is a reasonable car for my kid. It’s got a few thousand miles on it. It’s two years old.

That’s a good buy for you, especially if you buy it from the dealer, because you get that transferable warranty, plus you’ve got the factory warranty. Those are huge factors in buying a used car.

$10,000 and under

Now what if you’re saying, “I don’t have that kind of money. I’ve got $10 ,000 and I need to buy a car. What do I do?”

I always tell people before you make these decisions, whatever you’re driving, the rule of thumb is if the repair is more expensive than the value of the vehicle, get rid of the vehicle. For example, I’ve got a $10,000 car. That’s what it’s worth. I got $8 ,000 or $10,000 worth of repairs. Why would you do that? Why would you put $10,000 or even $8,000 into a $10,000 car? Because you’re never going to get $18,000 out of that car.

So that’s when it’s time to get rid of that vehicle and look for something else.

Now, a lot of people like to go to private owners. Totally fine. But make an agreement with them to meet you at whatever repair shop you’ve chosen: “Hey, can you meet me at Joe the mechanic? He’s my buddy. He’s an ASC certified tech. He’s going to go through that vehicle.”

Even Midas will do that.

Lauren’s three categories of used car quality

Green: This car is perfect. Nothing wrong with it. Definitely buy it.

Yellow: This car has reasonably repairable problems. Maybe it needs brakes. Maybe there was damage that might cost you down the road. Maybe the transmission’s looking questionable, that’s a few thousand dollars. But you need the whole list, just so you know what expenses are coming your way and also to negotiate the price.

You know that transmission? It’s going to be $500 to rebuild it. Now you’ve got $500 of negotiating space. So now you can say, you know what, you want $10,000 for that car. It needs a transmission. Either you can repair the transmission for $500 or give it to me for $9,500. So it gives you some negotiating space.

If they say no and you buy it anyway, just remember when you buy used [from an individual], there’s no warranty expressed or implied, you buy it. It’s yours. Have a nice day. There’s no recourse whatsoever in any state or any country, for that matter.

This is why buying from a used car lot might be a better option. You’re protected by a federal “lemon law,” which gives you 90 days to report a problem.

Red: Run away from these cars as fast as you can. Unless you’re a mechanic and you really have the skills and you want to tear out all the electrical wiring and find out if the airbags work and all the safety systems work. Most of them don’t. And you won’t know that till you’re in an accident.

This category includes flood-damaged cars. Never, ever, ever buy a flood-damaged car. There is zero warranty even on rust-through protection. Nothing.

Now you may say, “I live in Idaho, I’m not gonna have a flood-damaged car.”

Well, those cars are all over the world. Just think of Hurricane Katrina and Rita way back when. They alone caused around 650,000 flood-damaged cars.

Many of them got crushed, but not all of them. And almost half a million of them, and no one knows where they are. So they could end up literally anywhere in the world.

And how does that happen? Something called title washing. So the cars all sat in yards waiting for the insurance company to pay, because they have to pay to put that information on Carfax. So if it cost them $500 a car to report it, and there’s 650,000 cars, do the math.

They’re just going to pick and choose the ones that are more expensive or ones that they know are done.

They sell the others to salvage yards. And the salvage yard says, “You know, that brand-new Cadillac, that’s pretty nice. Low mileage.” And it ends up in the system [without flood damage on the title]. A lot of these cars are in the system. Not all of them got totaled.

There are ways for you to find out, and we can cover that on another segment. But it’s easy to find out if you take it to a mechanic. Look underneath the fuse box cover. If you see mold, you see water, you see moisture — you do not want that car. We’ve all spilled something on our computer or phone or whatever and you freak out. Imagine it’s a car.

New vs. used

Let’s say you’ve got $20,000 to spend. You could buy a new car, maybe a Nissan Versa or a Hyundai Kona, or you could buy a used car and get something bigger that still has pretty current safety. What do you do? This is the one thing that’s going to help you decide. Because I know it’s very confusing. You’re like, yeah, I could buy a ’22 or I could buy a ’24. I’m really torn.

Well, first off, you have to look at the finance charges.

You don’t have to finance with the dealer. Use a credit union. Credit unions have great rates. You join on the spot. It costs nothing. They want to work with you. There are tons of credit unions all around the country. Great way to save money. Get their best rate. Then ask the dealer to beat it. And they will. And if they can’t, you’ve got something in play and it’s locked in. So that’s worthwhile.

The other side is call your insurance agent. Hey, I’m looking at a ’22 whatever and I’m looking at a ’24 whatever. What are the relative insurance costs? You might be surprised. It could be more expensive or less expensive. It depends on the car, it depends on the safety features, it depends on the cost of damages.

Electric vehicles are super expensive to repair; so are hybrids. So what happens is the insurance rates are higher, especially when they have more technology, more cool safety features. If the car gets totaled, it’s going to be a higher rate. So I’d just like you to do your homework beforehand. It’s not just the cost of the car; it’s your interest rate

Most of all, don’t buy anything used online unless you really, truly know that vehicle. If you’re buying a new Honda Civic and having six different dealers pitch against each other, that’s a different story.

With a used car, you have to drive it. You have to see it with your own eyes. It is absolutely buyer beware. I don’t care if you’re buying a Ferrari or you’re buying a Kia. It doesn’t make a difference.

This can even happen with CPOs. These are what we call ten-footers. In other words, they looks great from ten feet. Then you get up close and it’s not at all the car they portrayed it to be.

Warning signs to look for

Some people are not nice. They have bad intentions, shall we say. I’ve seen everything from wood chips in an engine to all kinds of additives to stop a transmission or an engine from leaking. The biggest expense of anything on a car today is either electrical or engines.

And the engines are the heart of the vehicle. Take a hybrid. You’ve got two propulsion systems: the electric side and the gas side. So I always tell people to keep in mind: if one side goes wrong, can you still drive the car? Will you have an electric car that only does 30 miles an hour?

This happens a lot with super old Priuses or Prii, as I call them. The Toyota Prius has been around for 30 years. If you’ve got an original one and the electric side’s not working, if you run it as a gas car, it’s going to be extremely underpowered. So remember that you need everything to work together as a team.

So the engine or the driveline components are gonna be super expensive. And so that’s what you want checked. You want the engine, the fluids, you want the transmission, or depending on what type it is, have them look at the rear end also. All that makes the wheels move.

You want to have them take the wheels off the car. They’ll see things that you’ll miss, like rust, corrosion, damage, wrong parts, aftermarket components on a newer car. It could be a rebuild.

And then, of course, you want to see the title. Dealers will never sell you a CPO or a used car off their lot if they don’t have a clear title. if you’re buying from an individual, if they don’t have a clear title, that’s a huge warning.

If they’re willing to pay it off, fine. So when you go to buy the vehicle, you meet each other at the bank and the bank will take their money and give you a lien release.

You don’t want to buy a vehicle with either UCC filings, which would be from a commercial vehicle or a lien on the vehicle, because if it’s there, you won’t own the car. Whoever is the lien holder will have first priority, which is typically a bank or a leasing company.

Buying from a lease

This is another great way to get a good deal. Maybe you leased a Lexus. You love the vehicle. It’s at the end of the term. Maybe you’re over mileage and the mileage fee is super expensive. It could be 30 cents a mile. Could be seven cents a mile. It depends what you sign on your lease agreement.

And I’ve done this. I actually bought a car off the lease. I tell the leasing company, hey, I’m going to buy this at the end. The agreed-upon prices are already in your lease agreement.

It is not negotiable in any way, shape, or form. There’s typically a buyout amount between $100 and $500. They call it paperwork, which is basically taking the paper from one side of the desk and moving it to the other. You will pay out the lien to the lien release company, and it’s yours. In some cases (depending on the lease or the state), you have to pay sales tax on the balance of the unleased amount. And then that vehicle’s yours.

I have a vehicle from 2016. I paid, bought it off the lease. I have no reason to get rid of it. I drive multiple different vehicles every week because I’m a journalist and I review cars. So every week I have somebody else’s car, so I don’t get to put miles on my own, so I decided to keep it.

Everyone’s got a different scenario, but don’t ever leave money on the table. In other words, if you don’t have a lot of miles on the car — maybe you’ve got 8,000 miles a year and you bought 10,000 or 12,000 miles a year — it makes sense to buy it off the lease. Then you’ve got a great used car that you don’t give to someone else.

If you’re way over mileage, you have to weigh the cost of the overage. Maybe I should buy it out even with the sales tax. I’ll be ahead and I have a car that I know that I bought new at least. And with the economy being what it is, a lot of people are buying off the lease. It makes a ton of sense.

Too good to be true?

My cousin contacted me on a Mercedes. She was looking at a used car a lot. She found a used C-Class. She said, “This is what I really love. I always wanted one of these. The price is like right in my sweet spot.” I said, “Hold on. Before you do anything, what’s the price?” And then I looked it up on Kelley Blue Book. And I said, “This car seems too good to be true. Let’s run a Carfax on it.”

They didn’t want to do it. So I pull Carfax for her — and anyone can do it, there’s a fee sometimes, sometimes there isn’t — and it says it’s from New Orleans. I think, huh, 2-year-old car from New Orleans, low mileage, way low on price. And I say, “There’s three red flags here. This is a no.”

But she really wanted the car. It was black, it was awesome, it was cool. So I said, “OK, before you do anything, tell them you want to take it to the local Mercedes dealership and have them look at it to see what kind of repairs it might need.”

And they said, “No, we’re not doing that.”

So there’s your second huge red waving flag. So she said, “I don’t want the car.” And then of course they came down even lower on the price. And she knew right there that they were trying to sell her a bag of goods.



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