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Avoid Buying a Lemon Car – Two Simple But Critical Steps

There are plenty of things to keep in mind when buying a used car. We've talked about how to negotiate a great deal on a new or used car and the importance of comparison shopping (with AutoTempest!) None of that will help you though, if you skip these two crucial steps:

Step 1: Get a Vehicle History Report

Step 2: Have the Car Inspected

Bonus: Consider an Extended Warranty

We consider the first two steps absolutely critical for all car buyers. It just doesn’t make sense to risk many thousands of dollars to save the cost of a history report or inspection. Especially since they will likely pay for themselves in bargaining strength!

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Step 1: Get a Vehicle History Report

Vehicle inspection reports are inexpensive and contain a wealth of information about the used car you're considering. The most important information you’ll find in any report is

Vehicle History Report Options

instaVIN offers a vehicle history report for $6.99 that covers the first two points discussed above. For $6.99, there is absolutely no excuse to forgo this critical check! Although the instaVIN report does not cover liens on the vehicle, you can get this information by calling your local Department of Motor Vehicles (DMV) with the car’s make, model, year, and VIN (Vehicle Identification Number). Learn more about the instaVIN vehicle history report.

If you can afford a few bucks more (around $30 for a single report or $45 for unlimited), there are reports that offer more detail. An AutoCheck vehicle history report covers everything above - saving you the effort of checking liens at the DMV - as well as more detailed information on past odometer readings, ownership history, repair and maintenance history, and more. AutoCheck is also the only Vehicle History Report to feature a comprehensive score (called the ‘AutoCheck Score’) that helps you determine vehicle quality and compare cars at a glace. Learn more about AutoCheck at their website.

Step 2: Have the Car Inspected

Once you’ve picked out a used car you want to buy, and verified that there are no problems on the vehicle history report, it is absolutely critical to have it inspected in detail for mechanical and safety issues.

The importance of a used car inspection

While a history report is inexpensive and will highlight many issues, it can’t tell you the current condition of the car. A detailed report from AutoCheck will list many past repairs, but a quality inspection can tell you about future ones. Hopefully my own story will illustrate how important that can be, and you can learn from my mistake.

When I was about 18, I scraped up enough money to replace my beat up, 20 year old Civic with a 1990 Toyota Supra Turbo. It was awesome (heck, those ‘90s Supras are still pretty sweet, and this was quite a while ago). It cost every cent I had. (Which was also obviously not wise, but that’s not the mistake I’m talking about here!) My mistake was, in my desire to save money, I skimped on both of the critical steps listed here. The one that bit me was that skipped vehicle inspection.

Now, I thoroughly test drove the car, tried out every feature and option, visually inspected it, even had a friend who rebuilt and raced cars take a look. But neither my friend nor I were certified mechanics, and none of our cursory tests could shed light on underlying mechanical problems.

About a month after I bought the car, the head gasket blew. The bill was $2400 that I didn’t have. A basic inspection prior to buying would have found the problem and saved me that money.

So, I can not say strongly enough, get a vehicle inspection. It’s not expensive, and it could easily save you from an expensive repair bill! What’s more, it will almost certainly pay for itself even if you don’t find any serious problems. How? A proper, thorough inspection will almost certainly find something about the car that isn’t in perfect shape. It’s normal with used cars for there to be some wear and tear. If you find the car’s minor issues before buying, you can use them as leverage in the negotiation process to get a better deal.

Used car inspection options

Most garages and service centers will offer some sort of pre-purchase inspection. Generally they are called something like “150-point inspection,” depending on how many points are checked and included in their report. Expect it to cost $100-200, depending on whether you go to a local garage or a dealership, and on what the vehicle inspection covers. Ideally you would like one that includes a compression test, which will check for internal engine leaks like my Supra’s head gasket problem.

If you go with a local garage for your vehicle inspection, make sure you pick a reputable one that you’ve either dealt with yourself, or have personal recommendations for. Developing a relationship with a local garage you trust is always a good idea.

If you don’t have somewhere local to take it, or if you’re buying from a distance (through eBay for example), the CARCHEX Vehicle Inspection is a great service to check out. They will send an inspector right to the car to do a detailed curbside inspection and test drive. While they can’t do everything that would be possible at a garage, they do have the most detailed on-site inspection we’ve found, and they have over 900 inspectors across the country. All you have to do is purchase their inspection online for just $110, and they will arrange with the seller to inspect the vehicle. Once the inspection is finished, they email you the results of the full 155-point inspection, which you can review from the comfort of home.

CARCHEX has inspectors in all major U.S. cities. If the car you’re looking at is in a more remote area, you can contact them to see if they have an inspector in that area.

The only time I would consider buying a used car without a full inspection now is if it were still under manufacturer warranty, and came with detailed service records. Otherwise, like the history report, an inspection is a must.

Bonus: Consider an Extended Warranty

Extended warranties, also called vehicle service contracts, are basically a form of insurance. You probably wouldn’t consider driving without insurance, so it’s probably worth considering insurance against your car breaking down.

Your inspection will have identified any major issues with the used car and improved your chances of smooth sailing, but it’s no guarantee. If a $3000 transmission replacement down the road would put you in a difficult spot, an extended warranty might be a wise investment. They aren’t cheap though, so it’s important to weigh your options and determine which plan, if any, is right for you. We get into extended warranties a little more thoroughly here.

Recap

When buying a used car, don't forget these two critical parts of the process. Not only are they inexpensive, but each has the potential to save you thousands of dollars and help avoid a number of major hassles.

An extended warranty may also be a wise investment, but it is obviously much more expensive when buying a used car, so you need to consider your specific situation. For more, see Are Extended Warranties on Cars Worth It?

You can also check out our full list of car buying advice guides and tools.