How to research used cars to avoid buying a lemon

ST. LOUIS — What should you do first when looking for a used car?  It is important to know the vehicles history and your rights under a warranty.

Nationally, BBB has received 26,000 complaints regarding used car purchases in the past three years. Approximately 60% of these complaints follow a simple pattern: a consumer buys a used car, the car soon after malfunctions or fails to pass an inspection, and the consumer wants redress. Locally, over 1,000 complaints were made against used car dealers in the last three years.

Beyond the usual bait-and-switch routines, upsells and the sale of cars in sub-standard condition, BBB has recently received reports from consumers buying used cars online from a bogus car dealer and receiving nothing in return for their purchases.

When shopping for a used car, BBB recommends the follow tips to avoid driving off the car lot in a lemon:

  • Do the research. There are many online resources to check the average retail prices of various makes and models of used cars depending on the year and how many miles are on the car. These prices will give you an idea of what the used car should sell for when looking at different locations.
  • Evaluate your finances and budget carefully. Check your credit score with one of the credit reporting agencies before shopping. Your credit score may impact the type of financing you qualify for, the terms of a loan, or even which vehicles for which you can be approved. Visit your bank or credit union to get pre-approved for a loan, so you can compare rates offered by the dealer. Allow room in your budget for repairs, which will help give you realistic expectations of what you can truly afford. Set a price limit. When calculating the cost, be sure to include the price of the tax, title, registration, and insurance. Together these costs are estimated to be 10% of the purchase price.
  • Ask specific questions about a vehicle`s history and condition. If a salesperson indicates that a vehicle has been 'inspected' or 'checked over', ask for specific details. Was it a mechanical inspection, or just visual? Has the vehicle been put up on a lift? Ask for any records on the vehicle, including those related to inspection, prior maintenance, and any repairs or reconditioning done by the dealer. Ask for a vehicle history report, such as CarFax or AutoCheck. Many dealers are willing to provide this, and it can reveal past issues such as accidents. Remember that a vehicle history is only as complete as information reported, and is not a guarantee of the vehicle`s condition.
  • Consider having a qualified mechanic inspect the vehicle. Reputable dealers encourage customers to have an inspection done by a qualified mechanic prior to purchase, and will generally allow a vehicle to be taken off-site for a short time with some basic information such as a customer`s driver`s license and proof of insurance. Pre-purchase inspections can cost upwards of $100, but may help identify potential issues and save on costly repairs further down the road.
  • Get any additional commitments made by the dealer in writing. If the dealer has agreed to perform or pay for additional repairs as a condition of purchase, be sure to have these commitments written into the contract. This is sometimes referred to as a 'We Owe' agreement. Get the time frame for completion of repairs in writing, and make sure you understand who to contact to have work completed.

For more tips you can trust, visit http://www.bbb.org or call 314-645-3300.