Personal Insights

Five Red Flags to Avoid When Buying a Used Car

Buying a used car can be a stressful experience. Some used car dealers have a reputation for selling low-quality vehicles at a high price — and it can be just as difficult to trust an individual seller that you don't know. Look for these five red flags to help bypass the lemons and purchase a used car with confidence.

Used Car Red Flag #1: A Complicated History

Whenever a car is sold, the date and location of the sale, as well as current mileage, is recorded on the title. The vehicle's title also shows whether it's been salvaged after a severe accident or weather-related damage. Salvaged cars may come with lasting maintenance issues, so be aware of this risk.

Because a car's title can be forged, verify it with the appropriate state DMV before you finalize a purchase, especially if the vehicle was recently brought to your state and titled, or if the car's vehicle identification number (VIN) appears to have been tampered with.

For a fee, the U.S. Department of Justice's National Motor Vehicle Title Information System will produce a report with information about a vehicle's title, odometer data, and certain damage history. The National Insurance Crime Bureau maintains a free database that includes flood damage and other information.

A vehicle history report, which you can request from websites like Carfax or Experience's AutoCheck, allows you to view a car's accident history and confirm its reported mileage. You need the car's VIN to access its report, so be wary of any seller who declines to share this number with you before you purchase the car.

Used Car Red Flag #2: Inspection Insecurity

Just as you'd demand an inspection before buying a house, it's smart to have an independent mechanic look over a used car and perform safety and mechanical inspections before you agree to purchase it. Pre-purchase inspections are standard practice, so owners who refuse to participate in this process may have something to hide.

In addition, research common maintenance issues for the make and model you are considering. Companies like Consumer Reports keep records of these types of complaints and will share their research for a fee.

Used Car Red Flag #3: A Suspicious Story

If a used car seems too good to be true, it probably is. Be cautious of a car being sold for significantly less than its market value, which you can find on sites like Edmunds.com. If the car is in a different location than the seller, or if the seller wants you to pay in advance or through a wire transfer, the sale may be fraudulent. If you are considering purchasing a car from an online seller, review the FBI's tip list to learn more about avoiding Internet fraud.

Used Car Red Flag #4: Negative Reviews

If you plan to purchase a used car from a dealer, look up the company online. Look for Facebook comments or Yelp reviews that offer insights into the way the company does business. While a few bad reviews don't guarantee you'd have a bad experience, a long history of complaints could suggest a trend.

You can also contact your local consumer protection agency and state Attorney General to see if the company is involved in any unresolved complaints or search the Better Business Bureau's accredited business directory to find approved used car dealerships in your area.

Used Car Red Flag #5: Verbal Warranties

The Federal Trade Commission (FTC) requires most dealers to post a buyers guide in every used car they offer for sale. They must disclose known issues and warranty details. The buyers guide must reflect any negotiated changes in warranty coverage, becomes part of the sales contract, and overrides contrary provisions. So if the seller says the company will offer a service warranty or make initial repairs, make sure it is reflected in this document. The dealer should also include information about the percentage of the repair cost the company is willing to pay, the specific parts and systems the warranty covers, and the warranty term for each system.

For information about purchasing and financing a used car, visit the Regions Auto Center.