Buying A Used Car

In My Humble Opinion
1

Fellow primates -

My beloved son would like to buy himself a car. He is interested in used cars - actually, he is interested in cars he can afford, and I am not co-signing for him.

His price range is around $5K, and we are in the Upper Midwest. Dealers or private individuals are both options. He has almost no credit history, since he is only eighteen.

Any tips? Suggestions? Anyone want to describe all the process in detail? We already know to get the car checked out by a mechanic, but we are interested in [ul][li]what is the paperwork[]how does the process actually work[]what to look out foretc.[/ul][/li]
All suggestions welcome.

Regards,
Shodan

2

He is an easy scam target because he has no credit history. Car dealers have all kinds of loans with high interest rates for such people. Don’t fall for those. It is better if you just cosign a reasonable loan with him from a legitimate bank. That should work out fine as long as he is trustworthy and it will help him build credit.

3

There are websites like this one that do searches using VIN numbers, ostensibly to detect sleazy events in a used car’s past history that you’d like to know about before buying (for instance, if it was carried into the Gulf of Mexico during a flood, or cut in two by a semi and later welded back together).

4

Thanks! He is going to pay cash for the car, so no loans.

Regards,
Shodan

5

There is no problem with that but he needs to find some way to build credit in any case. Does he have a low-limit credit card that he can use occasionally and pay it right back? A very important part of credit is length of credit history. To establish that, he doesn’t have to so much except apply for some type of card and hang on to it while making the occasional purchase with it.

6

I second the notion of cosigning a loan through a local legitimate bank. The dealers will have financing available, but when your credit isn’t great, or isn’t established as is the case with your son, they’ll try to hit him with an outrageous interest rate drug out over a long period of time.

Get a preapproved amount with a set payment schedule from whatever bank you’ll be financing this through. Then go shopping.

When you find car, have the dealer contact your loan officer with the details.

Find out what the insurance is going to run before you make your final decision. Might be a great car, but if it’s a sporty car or a 4X4, insurance can hurt, even if you have a clean driving record. Not sure what the insurance laws are in your area, but he will probably be required to have full coverage insurance on it before he drives it off the lot. Have the VIN ready when you contact the insurance agent.

Always have your financing worked out first. There is nothing worse that having your heart set on a vehicle that you find out you can afford.

Your loan officer will take care of the paperwork and have you and your son sign it when it’s ready, probably the same day.

Also look into bi-weekly payments. It’ll save money on the interest (more principle payments more often,) and shorten the payment schedule considerably.

Good Luck… :slight_smile:

ETA - No bank loan to worry about… even better. All of the above for future reference then. :stuck_out_tongue:

7

I went through it with my son last summer.

The paperwork isn’t tough, assuming he’s going to pay cash. You give money to the owner, the owner signs the title, you go to your local license office and get everything stamped.

As for what to look for, there aren’t enough bytes on the board to list everything. I’d suggest limiting your search to a private owner in your general area. $5K isn’t going to get you much from a dealer.

Make sure your son is aware of the cost of insurance. He’ll save hundreds if you add the car to your family policy - but that also means you assume a lot of responsibility if he gets into an accident.

8

Edmunds.com is a great resource for researching used cars. It will give you specs on the car, ratings, dealer price, private party price, and trade in value.

Narrow down what kind of car you are looking for, with what options, and what years, mileage.

Look on www.craigslist.com www.carpsoup.com www.autotrader.com

Those are the best ones in the Cities. I’d avoid car dealers in this price range, they’re not making any money, and usually are aiming for the financing. In addition, it’s much easier negotiating with a car owner, who has about as much experience as you, than someone who does it for a living.

If he wants to spend 5,000, look at vehicles up to about $6,000 or so. Right now the market seems really depressed in used vehicles. Plenty of people trying to get rid of their cars, and not a lot of takers, at least in this range. Lowball the owner. Be nice, be pleasant, but ask him if he’ll go lower. If he has an asking price of $5000, he might say, well, I’ll go down to $4500. This is just the start of negotiations. Now you know he’ll take $4500. I’d counter with 3750, and we’d settle somewhere around 4000-4200. This may be a little much for a young kid to try, but who knows. When it’s his own money, he might take a lot of interest in the situation. Play up the “This is my first car”

After test driving the vehicle, taking it to a mechanic that you trust, and negotiating the price, you are ready to transfer the title. The seller fills out the title, takes a small corner of the title with your name and address on it, (He’ll send it to the DMV) You take the title and a copy of your insurance to the motor vehicle division-you can find a close location from this site. You have to pay a fee to transfer the title, and sales tax.

http://www.dps.state.mn.us/DVS/

Good luck.

9

I think this is better suited for IMHO than GQ.

Colibri
General Questions Moderator

10

Dave Ramsey would love you.

11

Thanks to all for the responses.

Regards,
Shodan

12

Were you after more “handy hints”-type mechanical stuff rather than the financial advice which has largely been the response (and that was good advice too, of course)?

One old classic tip (especially for an older car) is to take a fridge magnet along with you. Stick it all over the car. If it falls off, you’re likely looking at a fibreglass repair of an earlier smash.

13

I was looking for hints on the whole process. The magnet idea is interesting - my son was going to do a VIN search on the cars he is interested in.

Regards,
Shodan

14

I passed all the good advice along to my son, who thanks you for your interest.

He then chose a car from an Internet search. This was being sold by a used car dealer. He did the test drive, and all was well. He made the sale of the car contingent on approval from our mechanic of the car’s general condition.

It broke down on the drive to the mechanic. :smack: Apparently the folks at the dealership had neglected to add coolant, and it blew a gasket. So the dear lad called the dealership, informed them of the turn events had taken, and they came out and took possession of the vehicle. They tried to talk him into trading for another used car, but he did not think this was a good idea. :dubious:

He got his check back, so all it cost him was a tank of gas (the car was nearly empty when he got it) and about an hour’s frustration. The state trooper who stopped to see what was going on when he broke down on the highway were more sympathetic than he expected.

“Life is what happens while you are making other plans”. :stuck_out_tongue:

Regards,
Shodan