Purchasing Used Vehicles

oldfarmer50

"...Dealers typically make 4-5K on every used car they sell..."

According to Automotive News dealers average about $1800 on a used car and $1300 on a new car.

That's more than I thought for the new cars but way less than I was thinking on used.

isellhondas

As a newcomer to these forums you certainly aren't starting out on the right foot.

I've tried to ignore you thinking you were just trying to stir the pot but do you REALLY think a store can stay in business if they make the piddly amount of profit you think they should be making?

Have you ever owned your own business?

ohiocat110

Thanks to you and everyone else who replied.

The engine advice is exactly the kind of thing I was looking for. Knowing that certain types have a better track record than others will definately aid the decision making process.

We'll look at Saturns for sure, had a lot of luck with them. Other GM vehicles seem to be very hit and miss depending on the model and year, but focusing on that 3.8 engine will be a good place to start. Toyotas and Hondas will probably be out of our price range, but I've also been looking around for Nissans and Mitsubishis. Some of their late 90s models seem to be falling into my search.

vumpler

Hey guys! I talk on several forums and have just been lead here after discussing my current situation. So here goes...

So my wife needs a new car. But due to our budget and how much money we have to save up over the next few years we're stuck with only being able to pay $200-220 a month on another car payment. Right now she has a 98 mazda millenia. She considers it "poor" condition. It has 160k miles. Her parents bought it for her 3 years ago used for like $3,000. We got our money out of it for sure though.

(rabbit being chased about her current car, skip this paragraph to get to the important information)
The only problem with out (outside of the poor paint job and small little things that need to be fixed) is that it won't pass Tennessee Emissions. It has a leak in a hose or something that requires us to hook it up to a smoke machine to find the leak and then replace that part. The mechanic said it only costs about $200 to fix the whole problem, but for her its just not good enough.

Anyway we both have decent credit. She sits at ~750 credit score with me around ~710.

Real question I guess:
When looking into used cars, how many miles is to many?
.....I found online that it said 12,500 miles is the average traveled per year. But when I see all these cars and small SUV's with 95-100,000 miles on them, its hard to imagine spending $8,000 on them. I always thought everyone talked about once a car hits $100,000 its going to turn into [non-permissible content removed] and need to be sold.

Shes been looking at this Sante Fe for ~8-9,000. I'm thinking we could get it at $220 a month, but a 2001 Sante Fe w/ 100,000 miles on it, is it a good bet for at least 3 years?

What would you all suggest? Not necessarily the Sante Fe issue but just in general to my post.

Thank you,

vump

cccompson

You say this would be "another" car payment and it sounds like you expect to drive it into the ground. Why not lease something new for 36 months instead? There are some deals around now in the low 2s per month. You'll have a warranty and no repair bills for 3 years.

vumpler

Thanks for the reply ccc. Well as far as this car issue goes. If we are going to end up getting one, it would be nice to get a loan to help further build my credit. At least thats the rationale I'm using to make myself ok with this.

My wife is actually pretty unbelievable. She's very tight with money. She never spends any honestly. We save a ton and its just come to the point where she just can't take this car anymore. Honestly if I wouldn't have bought my Tiburon 2 years ago I would have gladly taken her car now. Theres just no dealing with her on this issue. It has had problems in the past. We've taken it to the mechanic about 5 times over the last year or year and a half and had to pay quite a bit to fix it. But really now its in a state thats just fine to me. But honestly its pretty reasonable to just let her get one I guess. It just has to be under those requirements of $220 a month and reliable.

oldfarmer50

"...It just has to be under those requirements of $220 a month and reliable..."

How much are you spending keeping the old car going.? Usually when monthly repairs start getting higher than a monthly payment it's time to trade. 160000 miles is pretty good. I've had cars that could have gone that milage but rusted out first.

After 120000 miles the chances of a major mechanical failure are much higher. So a car with 80-100K might give you 3-4 years of service before the trouble starts.

isellhondas

I would avoid the Mitsubishi products. They aren't close in quality to the other Japanese makes.

jeffyscott

With Saturn you might want to avoid the 1.9L, SOHC engine.

According to the MSN Autos site...

Occasional problems with this vehicle are failures of the Cylinder Head and the Intake Manifold Gasket (1.9L VIN 8 SOHC engine only), the Crankshaft Position (CKP) Sensor and Engine Coolant Temperature (ECT) Sensor. Problems with the CKP Sensor can prevent the engine from starting. The cost to replace the Cylinder Head is estimated at $948.81 for parts and $767 for labor.

I think that is listed for every year, not sure if that engine is used in other models. The same displacement DOHC engine does not have this problem, apparently.

jeffyscott

due to our budget and how much money we have to save up over the next few years we're stuck with only being able to pay $200-220 a month on another car payment.

Well, if you pay cash for the car you will be able to save an extra $200-220 per month, that would otherwise go to the car payments. So, if you are financially disciplined you end up in the same place.

We save a ton

If so, why not buy based on the price and pay cash rather than make payments? Why take a loan, if you don't need to? Just curious and it is really none of my busness, so feel free to ignore those questions, if you want.

I don't think paying interest to "build credit" makes a whole lot of sense. Pay your bills on time and if you ever need to borrow for some reason, you will certainly be able to do so.

I agree with you, I could not see spending $8-9,000 on a vehicle with 95-100,000 miles on it. To me that would have to be maybe about a $2-5000 vehicle, depending on how old it is. My wife and I each bought brand new cars that only cost double that amount...but then we'd rather have a little less car and get it new than spend a lot on used.

vumpler

Actually for my personal situation I do need anything that can build my credit. Right now I'm finishing up my Doctor of Chiropractic degree which leaves me at about 160,000 in debt when I graduate. When I get out I need a $100,000 loan to start my practice. My credit score HAS to be in the upper 700's, with $25,000 cash for this to be possible. Right now i'm in the low 700's and on par to over the $25,000 with how well my wife manages the money. So the loan would actually be helpful in that sense.

suydam

You don't need more debt! Buy a used Buick. There are plenty of them around with fairly low miles because they are often driven by older folks. They are very reliable. My son bought one with less than 40,000 miles on it.

isellhondas

Wow!

You're going to have to crack a lot of backs to get out from under all of that debt!

qbrozen

man, i knew that was coming! ;b

qbrozen

OK...I wasn't thinking. Maybe a hundred or two mark up but that's it. Thousands is a rip off.

hahahah.

man, you must not even pay your own bills yet.

lessee... $200 per car. Let's say we're dealing with a startup used car lot. For the heck of it, I'll assume when you say $200 markup, you are saying that is above and beyond my costs to buy at auction, transport, recondition, clean, and put it on the lot.

As for the rest, I'll just throw out numbers because I'm not a pro nor business owner, but I'll try to pound on the math a bit. Rent = $4k/mo. Electric = $500/mo. ummm... well, there are other bills, but let's start there. I would need to sell 24 cars just to pay those 2 bills! Then I want to actually make a living by paying my mortgage, feeding my kids, sending them to school, etc. That's another 25-30 cars I gotta sell. Do I need to pay employees? Hell, I don't think I can. But let's say I need 2 salesmen to help me out. They each will have to sell 25-30 cars to make their own salaries. PLUS, I have to pay the government taxes on those guys, pay partial on their health benefits, pay insurance on them. Wow!! I dunno. What's that? Another 25-30 cars?? So with all of this underestimating, leaving off bills, barely scraping a living out of the place, and I gotta move 130 cars a month??!!! SIGN ME UP!!!

jeffyscott

According to Automotive News dealers average about $1800 on a used car and $1300 on a new car.

That's more than I thought for the new cars but way less than I was thinking on used.

Is that the profit, or some sort of mark-up figure? Because profit would be what is left for the dealer to put in his pocket after paying all the bills and salaries associated with running the business. If is profit, then it is more than I would have expected. If it is the mark-up from the cost of aquiring and reconditioning the vehicle and before paying salaries and overhead, then it is about what I would have guessed.

moppert

I need some advice on buying a used car from a private party....The current owner of the car has it financed, and therefore the finance company holds the title. I plan to pay with cash. The purchase will be documented through a bill of sale. Ideally, when I pay the owner for the car, and take possession of the car, I would also like to have the title signed over to me immediately. Since the title is being held by the finance company, that won't be possible. Once the owner gets my money for the purchase, and "pays off" the vehicle, the finance company can release the title and mail it to me. When I receive the title, I would then have to go back to the owner to have him sign it over to me. There seems like there's a lot of unnecessary risk for me.

Is there a better way to handle a purchase transaction like this? What happens if the previous owner refuses to sign the title over to me? Any advice will be appreciated.

cccompson

It would help to know where the title is physically located because you really should handle this in one of their offices if at all possible.

If not and if the seller doesn't have the means to pay off the loan first, do NOT pay her/him in cash. Worst case would be for you to give the seller a check made out to the lender and the seller.

suydam

I sold a car that way some time ago. The buyer gave me a check for the amount I still owed, which was not the entire cost of the car. I gave her a receipt for the check, and then sent the money to the finance company. When the title arrived, she then paid the balance owed and I signed the title over to her.

moppert

All I know is that it's Daimler Chrysler Finance. I'm not aware of any local offices, unless a Denver area dealership would work with us.. I tried to talk to Daimler Chrysler Finance, but can't get through without an account number.
I like your idea of making the check payable to Chrysler. The owner owes $3k more than I'm paying, so we'll both need to make a payment to clear the title.

This situation...(title held by lender, owner doesn't have funds to clear title), seems like it would be common in the used car buying process. I thought there might be a straight-forward way to manage the transaction that was risk-free for all parties.

cccompson

The only way it seems to be risk free is if the loan is with a bank or credit union so the title can be physically present when the transaction is finalized.

I bought a car a couple of years ago where the seller had borrowed money through the manufacturer's finance arm. In spite of the seller kicking them as hard as he could (I saw the faxes and letters he sent), it still took 3 weeks for the title to arrive.

Another possibility might be for you to finance it (and then quickly pay if off) - if your lender is involved, there's less room for something to go wrong

lemmer

I am thinking about setting up an LLC and getting an auto dealer's license. I mainly want to do this so I can drive a bunch of different cars on the cheap. If I can cover my costs when I sell the cars I will be happy. I will probably only have two cars at a time and I will keep them at my house.

As far as I can tell, for Alabama I only need to post a $10,000 surety bond, get dealer's car insurance, and file some other miscellaneous paperwork. I am a CPA, so state paperwork, tax stuff, etc doesn't faze me at all. Am I missing other hidden costs, or am I just crazy for some other reason?

kyfdx

Not sure about Alabama...

But, a co-worker owns a car lot in Ohio... There is a mountain of stuff that you have to do.. But, the big one: You have to have an office, a lot, and regular business hours. And, they check.

If Alabama doesn't have those restrictions, you can probably pull it off.. Though, if you aren't actually in the business, some of your statements on the application might be false.

regards,
kyfdx
visiting host

oldfarmer50

"Curbstoning" That's a term that brings back memories. A few years ago there was a local family that owned a used car lot. When ever they got a real dog from the auction or a trade they would put it in front of one of their relatives houses and sell it private party. Since it was sold "as is" they didn't have to do any repairs when the thing blew up on the unsuspecting buyer.

Someone finally alerted the state to what was going on and they were given heavy fines.

Funny thing is, I see these kinds of operations all over the place. One or two cars on a lawn all the time. After seeing different cars every week for months you suspect they can't all belong to the owner of the house.

lemmer

Maybe I am splitting hairs here, but in Alabama if you are a wholesale dealer you aren't required to have a lot with a sign like you do as a retail dealer. I suspect a lot of these people with cars in their yards are considered wholesale dealers. I don't think they are prohibited from retailing the occasional car as long as they collect sales tax.

I would probably buy cars at auction, put them on eBay with a Buy-it-Now price. If they didn't sell within a month or so, I would just wholesale them again.

kyfdx

Ahh.. I see.. I don't think Ohio makes that distinction.. No special category for wholesale..

Let us know how it goes... You know.. if you can get me that Cayman for $25K OTD?

lemmer

You mispelled it. I think you meant a 6-cylinder Cayenne with a salvage title for $25K.

kyfdx

Shewww.. not sure if you can be my wholesale dealer, if you can't pay attention to detail..

I know what I want... and I know how much I can afford..

Seems simple to me.. make it happen!! :P

amad1

flkeys

Can anyone help me? I am looking to purchase a used vehicle but I am concerned by the Carfax report. The vehicle was sold at an auction in FL and list as a Fleet Vehicle. It only has 3800 miles on it but Carfax doesn't show that vehicle as ever being titled or licensed. Being that it was never titled how did it get miles on it. I Any info that anyone can provide would be greatly appreciated. :confuse:

cccompson

Nothing unusual about that - it's probably a manufacturer's program unit.

katie87

I'm considering a 2006 Honda Pilot EX-L 4WD with navigation and a DVD player. It has only 16,800 miles on it and my local dealership is asking $27,000 (originally $29,000). I checked KBB.com and found out that the trade-in value is $22,375, private party $25,985 and the retail value $29,800. According to the dealer, it was purchesed at an auction and the only "work" they did to it was to change the fluids, which they valued at $500 when labor is added in. It has been on the lot since approximately Dec. 20th and I'm wondering how much I should offer.

I've never bought a used car before and want to be fair to the dealer but I also don't want to overpay. What is a reasonable cash offer for this vehicle given how long the dealership has had it?

qbrozen

Well, a new '08 is selling for what these days? $29k after incentives? This one is 2 years old with almost 17k on it. I'm thinking it would need to be $22k to make it worthwhile, personally (only about a 25% discount from a new one). Especially since you may be able to get low low financing on the new one.

katie87

Thanks for your help!

stickguy

looking for a 1st car for my HS age son. It has been a long time since I have swum in the cheap end of the pool. Not as easy as it used to be, especially when you want something that will be safe. Not like my first cars!

Just casual looking in the paper has turned up a lot of overpriced crap, or the occasional decent looking possibility that is long since sold.

I have switched to looking at cars parked by the side of the road. At least it cuts down on the leg work, but still nothing that fits.

My real hope is to work some friends. Currently have 3 people that are supposed to be getting new cars soon that are going to let me know what they want out of their old ones, and another guy that already has a new one, and just needs to get around to selling the old one.

cccompson

And you are now dealing with the best of possible sources.

stickguy

but just a real limited pool!

jlawrence01

My real hope is to work some friends. Currently have 3 people that are supposed to be getting new cars soon that are going to let me know what they want out of their old ones, and another guy that already has a new one, and just needs to get around to selling the old one.

The only problem with that strategy is that a lot of people overvalue their used vehicle even if you offer them $500-800 over the dealer's offer.

My brother was looking at a 1995 Honda Civic that looked good with 165k and the lady still wanted $5995.

guss

If you have the time, Craigslist seems to be where most of the sub $5k cars have gone. The excellent deals are not there though, it mostly kids passing along their junker as they upgrade. You need to weed thru alot of crap to find the true gems.

The way you are going about it is the best, float it out to friends, neighbors and you mechanic that you are looking. At least you will know the history of it.

jayfram

Hi, I'm looking for something decent to use as a commuter car (I commute 30-40 miles a day to and from work), my partner and I are currently sharing one car, after my car lease ran out last summer and I gave the car back. (He is only working part time.) I want to spend just about $10,000 for a used car that will just get me to and from work, but I want something comfortable and safe too (I'm driving the freeways in the SF Bay Area). Someone is selling a used XC70, the ad says 2001 but it must be 2003, with 105,000 miles on it. Does this make sense, or should I be looking for something with less mileage? Any suggestions are welcome. So far my car buying efforts have been limited to scanning cars for sale on Craigslist for something in my price range... I cross-posted this question in the Volvo discussion forum.

cccompson

Regardless of the year, I'd stay away from a miled up Volvo myself unless it could be bought at a truly bargain price.

The range of vehicles available in the 10K selling range (asking prices up to 12K) is so large that it would be helpful if you provided some other info as to your preferences. For instance, is part of the appeal of the Volvo the fact that it has some carrying capacity due to its body configuration?

suydam

You can't go wrong with a used 4 cyl. Camry or Accord and the fuel economy and maintenance costs will be better than with the Volvo. Easier to park on those narrow SF streets too.

qbrozen

I'm in your corner on buying a used volvo. They can be great commuter cars. BUT, you need to find the right one.

Being in SF, you have no need for AWD, so I would look for a standard V70. It will decrease the purchase price quite a bit AND give you far better gas mileage.

Just to give an example, there is one for sale near me that is an '00 V70 SE with only 46k miles for $8k, if I remember the price correctly. As cccompson said, I would avoid a miled up one. You should have no problem finding one with under 70k miles for your budget.

blueeyes6

They, I'm in the industry and I have seem a big interests in used and new cars over the years, I have been in the industry for 21 years and seem alot, but all is good.

simonkenton2

I am looking at buying a used Infiniti I35. I have found a nice one at a dealership, a 2004 with 34,000 miles. I looked it up on carfax and it came off of a lease in Florida, was auctioned off, and wound up at this dealer in Atlanta. They have no maintenance records.
Is maintenance required in the lease contract, and is it enforced? All this car would have needed is oil changes.
If I could be assured that the car had been maintained I would buy it.

jebell

Lease agreements require the leasee to comply with manufacturer's maintenance schedules. I have leased many cars and never once was I asked to prove maintenance. I do not use dealer for maintenance so they have no record.

simonkenton2

jebell: Have you leased an Infiniti?
Thanks, Simon

Karen_S

A reporter from a large newspaper hopes to speak with consumers who just purchased a used car vs. a new car because you were looking to save money because of the current economic conditions. If you just bought a used car, please respond to ctalati@edmunds.com with your daytime contact information no later than Friday, April 4, 2008.

Karen_S

A reporter from a large national newspaper is looking to speak to consumers who purchased a used fuel-efficient car and why they decided to purchase it and whether they were surprised at the costs of the vehicle. If you’re interested in speaking to the reporter, please contact Chintan Talati at ctalati@edmunds.com with your daytime contact information no later than July 9, 2008.

Karen_S

A reporter with a large national newspaper would like to speak with consumers who traded in their Volvo for another used vehicle. If you are a previous Volvo owner , please respond to ctalati@edmunds.com with your daytime contact information no later than Thursday, August 7th.