Marc Cuniberti commentary: Buying a used car

A friend called for my advice on how to buy a used car. I have previously covered how to buy a new car in Money Matters but never a used car. When I got out of college, I started selling cars with a buddy. At that time, the price difference for a BMW model 2002 between Southern California and Northern California was about 25 percent, and the 2002 was THE car to own in Marin County in the early '80s. We figured we could make about $500 per car on average. That was pretty healthy for two kids right out of college. Eventually, we branched off to include more makes and models and in the process learned a lot about the used car business. On the buying side, there are certain things to look for at the onset. Once you've decided what make and model you want, check the web for reviews on the cars you are considering and begin the elimination process there. Some of the things making for a better car are higher freeway miles (versus around-town miles), the condition of the car, if it has been repainted or not, and whether the owner has any service records. The ideal car for me is an original-owner car, no accidents as verified by a Carfax document, and owned by a family who has all the service records. Although some cars won't check all the boxes as to what is ideal, always take your time before buying, as a car is an expensive investment. Oddly, I often found that original owners with proper documentation usually were the ones that didn't ask a premium price. On the other hand, those who buy and sell cars on the side (called curbing) often ask a premium price. Original-owner families can often be emotionally swayed to sell their "baby" (the car) to people they like. For that reason, always be super nice, dress sharply, be clean cut and forthright. Subjective, I know, but it works. As a general rule, we avoided used-car lots, as the prices were a little bit higher, but I have bought cars from lots on occasion. Certain car lots can offer fairly good deals, and I've found the best deals there to be older models but with lower miles. One of my favorite ways of finding good deals was finding cars with "FOR SALE" signs on them when driving around town. I often found them to be family owned, and many an original owner sells their cars this way. If you see a car in the driveway that looks pristine with a "FOR SALE" sign on it, chances are it could be a great find. Look for a car with low miles, in decent shape, has not been repainted, with lots of service records and a clean Carfax. I like older years but with low miles. Buy the miles is sound advice. You can research approximate car prices on KBB or Edmonds, but prices I find there can be out of date. It is better to see what is actually selling on sites like CarGurus or another car-selling page. Pages like Carvana are not a place I find helpful, as they tend to ask dealer prices instead of realistic for-sale-by-owner prices. There are warning signs to look for when buying used cars. The pink slip (owner certificate) should be in the seller's name. If they say they're selling it for a friend or relative, beware. A re-painted car is not a good idea. When a car is repainted, the new paint is not as durable as factory paint. Especially avoid cars whose color has been changed. A car that has been hit or has an accident on its Carfax, unless it's a verifiable very small accident, is a car I would avoid. Ditto with any title that says "salvage." Because I've sold cars, I know how to drive them and feel what is going on with the vehicle, so unless you are a mechanic, it's a good idea to take the car in and get it checked out. An honest seller should find a way to make this happen. Before you go that far, however, look closely at all the areas of the car, inside and out, and test all the electrical functions. Cars that have been brought in from out of state should be inspected closely underneath the running boards and behind the wheel wells for corroded areas, which are another no-no. Don't buy any car with rust on the body. Also look down the sides of the car at various angles for rough finishes and waves, which could signal previous body work. And make sure you look at your car at least once in broad daylight. In conclusion, look for cleans cars with original paint, clean titles with a clean Carfax and cars with lots of service records. The fewer previous owners the better. Add in good reviews and what appears to be a wholesome person or family behind the sale, and you improve your chances of getting a nice used car. This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 Email: news@moneymanagementradio.com