How to Buy a Used Car from a Dealer

1. Never buy a car without bringing a friend along. They can help you avoid high pressure sales pitches, give a second opinion, and be a witness if you have to go to court. Use this "Car Checklist" to help you remember the basic things to check.
    
2. First, call your bank or credit union, or go to the library to check on the “blue book” value of the car model you want to buy. You can also find it online at www.kbb.com. Kelley Blue Book is a company that reports market values for new and used cars based on many factors. Looking the car up in the “blue book” is a good way to know what the car you want is worth.
    
3. Watch out for tricks. “Bait and Switch” is when you go to a dealer to look for an advertised “deal,” but it is gone. Then they show you a more expensive car.  Another trick is when the salesperson says, “My manager may not agree with this price, so buy it now.” Take your time. If you let them rush you, you won't get the best deal.
   
   This can also happen with financing. Sometimes they even let you take the car and then call you back and try to force you to sign for a higher priced loan.
    
4. Get a mechanic you trust to look at the car before you agree to buy it. If the seller refuses, buy your car somewhere else. There is probably something to hide.
    
5. Get all promises in writing. A spoken promise is almost impossible to prove and enforce. If they won't put things in writing, they probably won't stand by the promise.
    
6. Always ask the seller specific questions about the car, like:

   - Was the car in an accident?
   - Was the car in a flood?
   - Have you had the car checked by a mechanic?
   - Did they find anything wrong?
   - Is there anything wrong with the brakes? Engine? Transmission?
   - How long do you think the engine and drive train will last?
   - If it does not last that long, will you fix it? For how much?
    

7. Insist on specific answers, not general statements. Words like “this is a good little car” are called “puffing”. You can’t count on them. But if the dealer writes down that the brakes were fixed last week and work perfectly, you may be able to force them to fix the brakes if they fail soon after you buy the car. Get it in writing!

8.  Read the contract, especially the fine print. Do not sign the contract if it is different from what the salesperson said about the deal. Make sure the numbers - especially your payments and all of the charges and fees – are written in the contract and match what the salesperson told you. Watch out for add-ins (see #11).

If something says that you are taking the car “as is” or “no warranty,” this means they do not have to fix anything. If it dies the next day, you have to pay to fix it. if you borrowed money to buy it, you have to keep making payments.

9.   Get your auto loan from your bank or credit union. When you finance a car loan with the dealer, the dealer is often making money on the loan especially if they sell you the  loan at a higher interest rate. A local bank or credit union may give you a lower interest rate.

10.   If you get your loan from the dealer, ask them to put in writing that they are giving you the best rate you qualify for AND that they won't get any money from the lender. Ask them to sign and date this paper.

11.   Dealers try to make extra money by selling extra products or services. These can be things like credit insurance, service contracts, extended warranties, GAP coverage or maintenance contracts. By law, you don’t have to get any of these to buy the car. They are usually overpriced and often do not help you much when you need it.

12.   Get the title (ownership) documents when you buy, not later. This is the law. Do not pay the seller until you see the title. This makes it harder for someone who does not really own the car to sell it.

13.   Ask if there is an ignition cut off chip. Some finance companies put in remote controls that keep the car from starting if you are late with payments.

A “warranty” is a promise about the condition of the car on the day you buy it.  It can include a promise about how long the car will operate normally.  There are 3 kinds of warranties you need to know about:  Minnesota’s Used Car Warranty, implied warranties, and express warranties.

This is a warranty covering a used car sold by a car dealer (not a private person) if:

• The price is $3,000 or more, and
• It is less than 8 years old, and
• It has less than 75,000 miles on the odometer.

The warranty doesn’t cover other cars like diesels, commercial vehicles, etc.

The warranty covers some parts for 30 or 60 days or 1,000 to 2,500 miles, depending on the mileage at the time of sale.  If one of the covered parts goes bad in that time the dealer must:

• Fix it, or
• Give you a refund, or
• Give you a different car.

If the dealer breaks this law, you can sue for money damages and attorney fees.  You have up to 1 year after the warranty runs out to sue.  Keep track of your bills, repair records and the dates that things happened.  Find a lawyer who specializes in Used Car Warranty Law cases.  For help finding a lawyer in your area go to www.consumeradvocates.org/findanattorney/.

Implied means the warranty is there, but not written down.  The law “implies” or creates a warranty that the car is reasonably fit for normal use.  This applies only when the seller is a dealer, not a private person.  You lose this protection if you are not careful.  Words in the sales contract like “as is” or “with all defects” wipes out the implied warranty.  That is why you should cross them out, and you and the dealer should write your initials by the cross-out before you sign the contract.  If there is no warranty, be sure you are not paying too much for a car that may need repairs soon.

Express Warranties are specific promises, which may be spoken or written, about the condition of the car when you buy it and how long it will stay that way.  Always ask the dealer, or seller, to put the warranty in writing.  Written promises are far easier to prove in court than spoken promises.  If they won’t put the promise in writing, they probably won’t stand by it.  Express warranties can be limited as to what parts are covered, how long they last, and what part of the cost of repair you will have to pay.

Minnesota Department of Public Safety
Driver and Vehicle Services Division
651-215-1328 or TTY: 651-282-6555
https://onlineservices.dps.mn.gov/

Minnesota Department of Commerce
85 East Seventh Place, Suite 500
St. Paul, MN 55101
651-539-1500
www.commerce.state.mn.us

Minnesota Attorney General, Consumer Division
651-296-3353 or 1-800-657-3787
http://www.ag.state.mn.us/Office/Complaint.asp

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue NW
Washington, D.C. 20580
1-877-382-4357
www.ftc.gov

The FTC doesn’t investigate individual complaints about consumer problems but tracks problems and advises consumers on steps they can take.

National Association of Consumer Advocates
www.consumeradvocates.org/findanattorney/.