When buying a used car with an auto loan you must follow some simple guidelines to avoid unpleasant mistakes and make sure the car you buy will satisfy all of your needs.
Dealer or private party purchases?
Buying from a dealer will usually result in higher prices if compared t private sellers. Although, dealers provide a detailed report on each car they sell and perform frequent inspections, which may be very useful for your auto loan. Although, you still have to an inspection on your own when buying a car.
Some auto dealers offer limited warranties with their cars, and most sell extended warranties. Be careful with "powertrain" warranties, that are not "bumper-to-bumper" full-coverage warranties. It's recommended to compare warranties available from other sources.
Some car dealers sell "certified" cars. This usually means that the car has gone through a more thorough inspection and is sold with a limited warranty. Eventually, certified cars are more expensive. Request a list of what was inspected and what is covered, when considering a “certified” car.
These are the general characteristics of certified cars:
- Under 75,000 miles
- A complete diagnostic mechanical inspection and repair as necessary performed
- Less than 7 years old (current model year plus 6)
- No salvage title history
- No evidence of current or past frame damage
- No evidence of current or past flood or water damage
- No inoperative or replaced odometer
- No odometer roll backs
- Not a Lemon Law resale vehicle
- Emission certified as required by applicable state and federal laws
- In safe operating condition
Federal laws help you
The Federal Trade Commission (FTC) requires the dealers to attach a Buyers Guide to each used car. The Buyers Guide helps protect consumers from possible issues that may arise from buying a used car from the dealer using an auto loans. Although, FTC rules do not apply to individual sales.
Inspect the car
Don't rush with taking an auto loan when you've selected the car you want to buy. Make sure to perform an inspection and investigation of the car to reveal any existing or potential issues.
Keep in mind, that you buy the car “as-s”, unless you purchase it with some kind of warranty, provided by the dealer. In this case if the engine falls out on immediately after you leave the dealer, both the car and the separated engine belong to you.
The seller bears no responsibility after the car is sold, even if you suspect that a he was aware of th problem. This is why yous should inspect the car before taking the loan and buying it. Be sure to check with state laws on that matter, because they vary from state to state.
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