Updated on: July 25, 2021
You've probably heard the phrase "caveat emptor." In Latin, this means "Let the buyer beware," but when it comes to purchasing a used car, a more appropriate phrase may be "Let the buyer prepare." (Google Translate is surprisingly unhelpful with the Latin translation for this.)
Fortunately, you don't need to know Latin to avoid buying a lemon—and you don't necessarily need to be a car expert, either. Though there's more to car buying than just looking for low mileage, a lot of used-car shopping just requires you to pair your common sense with your other senses: If a vehicle looks, sounds, feels, or yes, smells bad, it's not a good sign.
The trick is telling minor faults from major ones. You'll want to use the former to negotiate the price you pay, while the latter will tell you when to walk away. Both are important to the buying process. You can tell which is which by learning just a few things, including different options that can protect you and your purchase if you're not entirely sure whether to buy a specific used vehicle or not.
Consumer Protection Laws
Many people have heard of so-called "lemon laws" that entitle consumers to a refund or replacement if they buy a damaged or defective item. And while this sounds nice, a lemon law doesn't replace doing a little research before committing to a major purchase. This is especially true with used cars.
Despite dud cars and "lemon" often being synonymous, lemon laws do not apply only to new car sales—and they often don't apply to used-car sales at all. What the Magnuson-Moss Warranty Act (the official name of the federal lemon law) does require is that retailers' written warranties be in a single, clear, and easy-to-read document. It does not require retailers to offer written warranties, though.
If your new vehicle comes with a written certified pre-owned (CPO) warranty or extended warranty, then this federal law will likely cover it. If not, you'll have to rely on any laws your state has to protect you. Six states currently have used-car lemon laws, and an additional few offer different consumer protections for used-car buyers—against deceptive sales practices, for instance. However, only true used-car lemon laws will net you a refund or replacement. You can look up your state's laws here.
Check which types of used-car purchases your state's laws include. Some laws are applied to dealership sales but not those made by private sellers. If they include both, the protections may vary. For instance, Massachusetts used-car dealers must provide a warranty for up to 90 days and 3,750 miles. For private sales, buyers must prove sellers knew about a car's defect before selling them the vehicle in order to receive a refund. Proving this could be tough—and may influence your decision on where to buy your used car.
Knowing that you have backup from the government during and after your used-car purchase is great for peace of mind. Still, ideally you will never have to jump through the hoops required to take advantage of these laws or deal with the disappointment of having made a bad purchase.
When shopping for a used car, you can always ask to see the maintenance records. Assuming the current owner has kept records, this will give you some insight into the care the car has received. Better yet, hire an independent mechanic to inspect any potential purchase—it's one of the best investments you can make in your car shopping. Dealerships may use their own in-house technicians to ensure cars are in running order before selling them. After all, they probably don't look forward to dealing with warranty issues and unhappy customers, either.
However, an in-house mechanic's inspection criteria may be very different—and not nearly as thorough—as what you'd get via an independent third party. Try to use a mechanic you know (perhaps the one you've used for your current vehicle). If you don't have such a person, though, you can easily get an inspection from most repair shops. Call around to price this service, and ask if the shop offers any kind of warranty with its inspection.
If the salesperson won't let you take the car for an inspection, that may be a red flag. See if they'll let you do this if they accompany you to the repair shop. Alternatively, you can ask if they'll let you bring a mobile inspection service to their location. If they push back against all your efforts to get your own independent inspection, you should move along to another seller.
Another great option to protect yourself is getting a vehicle history report. Using the vehicle identification number (VIN), these reports offer records of a car's title, number of previous owners, and any accidents it's been in, among other information. Most major car dealerships provide a vehicle history report for free with used cars, but if you're buying from a private party or working with a dealer that doesn't offer this service, you can also purchase one on your own for less than $100.
What to Look for Outside the Car
The cost of a pre-purchase inspection is minimal as well—on average, it’s about $100. Paying for that and a vehicle history report can be a bargain, especially considering the headaches and money these small investments could save you (best to know if you should expect any expensive repairs before you commit to a new car loan and the monthly payments that come with it). Still, before spending any money, you can spot some basic issues on your own to tell whether a used car's condition merits moving forward or not.
On the outside of the car, you'll primarily want to look at the tires, paint job, and general condition of the car. For the tires, check that they're the same brand and are worn equally. You can identify a "feathered" tire (one with uneven tread) by looking at or feeling one of its sides to see if the tread is much more pronounced. This is a sign of misalignment, which is typically an inexpensive fix.
On the body of the car, look for any dents or scratches. On their own, these are more eyesores than huge problems, but they may be indicative of more serious trauma the car has suffered—like an accident. Pay attention to any visible rust or corrosion. A small spot here or there may be okay, but large patches should be a deal-breaker.
On flat ground, check for frame damage by looking down at the car to make sure its doors, fenders, and lines are even. Check the vehicle's trunk and all the doors. Make sure they not only work correctly but also that they display no signs of rust. Does a musty smell hit you when you open any of them? If so, this could be a sign of water damage.
If you're up for getting down and dirty, you can ask to get under the car to look for rust or other damage. This is probably a better job for your professional mechanic, though. One easier (but still dirty!) test you can do: Run your finger around the inside of the exhaust pipe. If you find a greasy residue, it may mean the engine is burning oil—a big no-no.
What to Look for Inside the Car
Much like sliding underneath the car, a thorough under-the-hood inspection is likely best handled by an automotive professional. Still, you can spot some easy warning signs on your own.
Similar to the car's exterior, the area under the hood should be free of dents and rust. If you see obvious cracks in the car's hoses and belts, they could be close to snapping, and you'll need a couple hundred bucks to fix them when they do. Bigger warning signs are dark stains on the engine block. That could signify a leaky gasket—which could potentially cost thousands to fix.
Be sure to check all the fluids as well. Brake fluid, power-steering fluid, and coolant should all be full. If the coolant is low, it could indicate an issue with the radiator. Transmission fluid should be pink or red; if it smells burnt, that could mean a transmission problem. Pay extra attention to the oil. Is there a foam residue inside the oil cap, or does the liquid itself look more like milk than oil? These are additional signs of a leaking or blown gasket.
Inside the car itself, look for any obvious wear and tear, like rips or stains in the upholstery. If the car has air conditioning, turn it on to make sure it works. In fact, turn everything on! Lights, windshield wipers, turn signals, audio system... you should check all of them. If applicable, make sure the automatic windows, locks, and seat adjustments work correctly. Take a look at the odometer to see if the mileage is the same as the car's seller told you it was, and make sure no warning lights appear on the dash.
Taking a Test Drive
If the car's exterior and interior seem to be in good condition, you're finally ready for the fun part: driving it. Of course, that doesn't mean your evaluation should stop here. Rather, you need to focus on all aspects of your driving experience to see if this is the right car for you.
When you turn the key, how long does the car take to start up? Does the car start making any odd noises or shaking? Those are clear warning signs. Try to put the car through a stress test of sorts. If possible, drive it on flat ground, hills, and different types of roads. Vary your speed as well, and pay close attention to any feedback from the steering wheel. You'll want to get a sense of how the car handles all of these different environments.
Once you finish your personal inspection, write down everything you've noticed that seems questionable to you. Having a friend with you to document all this can help as well. These are all the things you'll want to mention to your mechanic when you bring it in for an inspection.