Things to consider in buying used cars

Things to consider in buying used cars

Buying from used car dealerships means paying extra for sales commissions

They charged too much money for their vehicles. The guys that are selling used cars are pros. They do it for a living. They want to squeeze every last dime out of the car. They have no personal involvement in it. It's just a used car they're selling.

Generally, their commission is the percentage of sales. The higher the price the more money goes in the pocket, and generally to used car lots, they will go anywhere from two to four times what they actually paid for the vehicle that they're gonna try to get you to pay. And being professional car salespeople, if they got a car they know sells, they'll wait until they get as much as they possibly can.

Direct owners vs dealerships

If you're buying from a private individual most people are in a hurry to get money. Cars are one of the few big liquid assets that you can get money fast for and of course when you buy a car from a used-car dealership. They often have a lot of backend extras that they don't tell you about until it's too late.

If you ever do go to a used-car lot and you have no choice because you can't find what you want except there, ask them what the price of the car is all-in, not what they say it costs and then they're gonna add all extra costs you will find out--tax, title, license, fees, etc.

I've seen some dealerships add $500 or even $1,000 of extra fees including, getting the registration in your name, dealer prep cost there are all kinds of hidden things that they'll often stick in. With private individuals, they aren't going to do that if they're selling you a car, so of course price is a big deal, but reliability is also, something that you got to think about.

I know how used car dealerships advertise all over the place and they will say "Oh check the reviews we have on Facebook and Google." Well, all that does is pass the responsibility on the internet, not on themselves.

From my experience, it's not that reliable anymore. Reviews can be faked by friends and relatives. One can even hire trolls farms just to boost one's credibility on the internet.

Back in 2014, I discovered a Nissan Navarra from a collision shop that had been totaled. When I checked it out online, I found out a dealership with good reviews was selling it and in the car's description, it says the car had never been in a wreck.

I also had a friend, who was looking for used Toyota Fortuner and found one at Ford dealer traded-in car listings. The Ford agent said it hadn't been wrecked. His mechanic gave it a check and on the undercarriage, some plastic fender parts are torn off, some of it missing, cut the other half, so it didn't drag on the ground.

When he looked at the radiator support, he found that half of the latch was painted white and the other half was the factory black. Now this was a white Toyota, so obviously the car been wrecked and repainted. But the dealership said it had never been wrecked.

They had a stupid sticker right on the window that said, "AS-IS NO WARRANTY" so the Ford used-car dealer there was doing double protection. They put a little sticker disclaimer, but they also claimed it hadn't been in a wreck, so even you could show it was in in a wreck and any fool could find that out. The Ford dealer just had to say, "Oh look our sticker said there's no warranty that we didn't inspect it, so if you want to sue somebody or the original owner because he told us it hadn't been wrecked."

You really don't want to deal with any of the stuff when you're buying a used car. On top of it all, they were asking an ungodly sum for this car. They wanted like $12,000 for a car they had 200,000 kilometers, had been wrecked, and even the body itself had a lot of paint chips on it because when they did the bodywork it had been a while back (because the paint didn't smell anymore).

Extended warranty scam

Most used car dealers are selling premium brands that sell well like Toyota as it is easy for them to stack it up at the highest resale price they could possibly ask, hoping for suckers to buy. If they don't, then over the course of weeks they'll simply reduce the price until somebody buys it. Their favorite sales pitch is an extended warranty package.

Consumer Reports showed that in the United States, over 55% of the people who bought these policies never used them, never made a claim, yet the average cost was $1,300. So there's $1,300 that you'll never see again, and even if you need to use it.

My friend had one of these and the engine went out, they tried to use it and the warranty company said, the engine was damaged when you bought it we don't pay for pre-existing conditions, so they didn't get the engine repaired which would have cost thousands of Pesos for free, because they said: "oh that's a pre-existing condition we don't pay for that."

Now, of course, you want to have a mechanic check out a used car before you buy it. That's the best insurance. But don't think that these extended warranty policies which are just insurance policies are gonna cover all kinds of stuff, because then you're arguing with an insurance company, usually a relatively large one. They don't care about you and are you really going to take them to court over something, they know how much money that cost. If they deny a claim, take them to court sure, but who wants to deal with that nonsense in the first place?

Another reason not to buy from a used-car dealer is, a lot of them have these certified pre-owned cars that they certified, well who certified it? They certified it themselves and that reminds me of one of the craziest things I ever saw.

I had gone to a Toyota dealer for a relative who was buying a used car there and I'm checking it out in the parking lot, and I find out that the thing is two liters low on oil. So I told him, "well my cousin is not gonna buy this car as its an oil burner". This vehicle had a sign on it that said Certified Pre-owned Car. The sales agent told me "oh well we haven't serviced it yet don't worry we're gonna service it", which I told them it's too late now buddy. I see its low on oil that means it's burning oil.

Apparently, the previous owner didn't take care of it now it's too late, the engine has been damaged, so my cousin did not buy the car and this was one that said certified pre-owned. You know once they change the oil and the oil is clean you're not gonna know that it's an oil burner until you buy it and then you're stuck with it, and even if you had some kind of warranty.

All those things have so many issues they can get away with, it's not a good idea to buy from these pros. You're buying a car from a professional at a used-car lot, they paid anywhere from thirty to fifty percent generally of what they're selling it for. Well, they bought that from somebody, why don't you buy it from somebody yourself and save.

I actually used to know a guy that did that for a living. He told people that he would buy their new car because he knew how to negotiate so he could save a few thousand buying a new car for them, as long as they gave him their used car at the dealer trade-in value. So he got the cars at that price which is cheap, then mainly he had a used car business, where he would then take those cars he got cheap and sell them at a higher price at his used car lot.

So buying from a private individual and direct owners with your own mechanic would be a better idea.

Professional used car dealers will eat you alive

As I said the dealers are professionals. They know how to make money by selling cars. Its sort of like you might think you're a good poker player. Well take a trip to Las Vegas and play at a high-roller stake poker game, they'll probably eat you alive, because they're pros and they really know what they're doing.

I've had plenty of friends who buy used cars from private individuals. Those people they bought them from don't know all that much about cars and they just got tired of the car because, well they need to fix this and that and they want another car. That's a perfect deal.

There are some deals out there in the real world, but you're not gonna find them at dealerships. You're never gonna get a real deal at one of these used-car dealerships as they're pros. They know what they're doing.

If you must buy from used car dealerships--do this!

You have found your dream ultra-rare sports car and it's only available on this particular used car dealerships. If you have to buy it, you do one thing and one thing only--tell them you want to see a clean title! You don't want to get one that's a reconditioned title or salvage title because it meant the insurance company had totaled it. Used car dealerships buy tons of wrecked cars and parts from insurance firms and then fix them as cheap as they can and sell them.