Buying a Used Car
Cars With Warranties / Service Contracts
There are several things you need to be aware of when you are considering buying a used car. In NC, the law is buyer beware unless you have something in writing that says otherwise i.e. a warranty, service contract etc. That means you buy the car “As Is”, defects and all. You may have heard of something called the “Lemon Law” which helps some consumers return a new vehicle after purchase for a refund if the vehicle has enough repair problems within a certain time frame of buying the car. Please be aware, however, that only applies to new vehicles, not used vehicles. Unless you have some type of guarantee, warranty or service contract in writing for your used vehicle, you are stuck with what you purchased. The seller has no responsibility for repairs unless you agree otherwise at the sale. If you agree otherwise at the sale, you need to put that agreement in writing. It is very difficult to prove an oral agreement. The written agreement is usually called a warranty (limited repairs covered for a set period of time for usually no cost) or a service contract (you pay for limited repairs for a set period of time). The Lemon Law only applies to the purchase of new cars and will be of no help in this situation.
If you do receive a written warranty or service contract, examine it closely to see what is covered. Does it only cover parts or does it also include labor? Look carefully at what type of repairs are covered. Where will you be required to take the car to get the repairs? Please keep in mind that if there is a warranty or a service contract that if you let anyone else do any type of repair or examination that requires taking parts on and off that you could invalidate the warranty or service contract. You need to give the seller every opportunity to honor the warranty or contract or it will be invalid. Warranties do not usually cost money to purchase. Think very carefully, however, about purchasing a service contract. They are not usually worth the money you pay. If you are financing the car, that cost is usually included in the financing package, making it even more expensive.
Questioning the Seller
Because many used cars are sold without a warranty or service contract, you should always bring a witness with you when you go to look at the used car. They will then be able to testify as to what questions were asked and repeat how the seller answered those questions. Possibly make a physical list of the questions you want to ask about the car and then check them off as you ask the owner. Jot down the answers as the owner answers them. That will hopefully make the owner think twice about lying to you. You can also tape record the conversation, but most people get nervous when they think that they are being tape recorded. You are not required to tell the seller you are tape recording your conversation with them when you are talking to them in person. If it is over the phone, as long as the seller is in NC and you are NC, then you can also tape record the conversation you are a part of when discussing the sale over the phone with or without telling the seller.
Checking the Vehicle History
You need to always ask to look at the work receipts and work history on the car. If you purchase the car, ask for copies of those. Check the mileage on the work receipts with the actual mileage on the car. You need to ask whether or not there were ever any major repairs done which cost over $100. You need to ask if the car has ever been in any type of accident or if it has had any bodywork or engine work. Again, ask for copies of those receipts, if you are going to buy the car. Ask if the car is under warranty or any type of service contract. If the answer is “yes” ask for a copy of that. You need to see if the warranty or service contract transfers or even can be transferred if the car is sold.
You should always, always, always bring the car to a mechanic to have it looked over before you buy it even though it might cost you to do that. Ask the mechanic questions as to what they checked. Ask for a written copy of their work. If they do not have time to look at the car carefully, please be aware that they may not know whether or not there any problems with the vehicle. You will want to make sure that all the major systems in the car are checked such as the transmission, brake, muffler, timing belt etc.
You will want to know how many owners have owned that car. You want to ask why the person is getting rid of the car. You will want to know how long this owner has owned the car and their date of purchase. You need to be suspicious if they have only owned the car for a short period of time. They will not know the car well enough to answer your questions. If they keep indicating that they do not know the answers to your questions, then you need to be suspicious.
You can do a CarFax search but please be aware that the only thing that will show up on the CarFax information will be possibly public records and work that a mechanic did, if the mechanic chose to put that information on CarFax. If a car has been in an accident and the police were not called, then there will not be a notation concerning that on CarFax. A CarFax search will help if the car has been owned outside of NC. It is always good to look at CarFax just to see if anything shows up. It will also show things from out of state which will not show up on a DMV title search. There is a charge for that.
You can also do a title search through the NC DMV, but those records will only be NC records. If the car came from out-of-state, you will not find those records through the NC DMV. There is a charge for that. The NC DMV will give you a certified copy of all the title work (ownership) in NC. That is helpful to compare the mileage, to see previous owners, to see if the car has been owned by an insurance company which probably means it has been in an accident, to see the length of time of ownership for each of the owners, etc. It will give you copies of the previous titles in NC. It does not give you every title for the car unless the car has been in NC since it was delivered from the manufacturer.
Ask to see the title before you agree to purchase the car or before any money changes hand. It is at that time that you may see the words, flood damage, salvage or hail damage. You need to be extremely careful about purchasing a “salvage” vehicle, a flood damage car or a hail damage car. You should not be paying normal fair market value if the car has any of those designations. If the car is anything of those things, that designation will appear on the NC title. If the car came from out of state, it depends on that state’s law as to whether or not that designation appears on that state’s title.
You may want to check the various places in the car that have a Vehicle Identification Number (VIN) to make sure the number is consistent. If they are not, then you have pieces of several cars which could be a serious problem. Usually that means that the car is stolen. The VIN will appear on the inside of the door, sometimes the dash board, the engine block etc. It should match what is on the title. They should all be the same.
You may want to check online to see if there are any problems with the car nationally such as a recall. Check with the manufacturer. Are there any class action suits? Are there certain known problems with the car? You need to be especially cautious about buying a car online.
Always test-drive the car. Please make sure that the heater, AC and radio are tested as well as the other accessories to the vehicle.
Checking the Price / Seller
You need to make sure that you check the fair market value of the vehicle and not just take the seller’s word for it. You can check the following websites for values of vehicles.
You can also check with your bank, the car circulars you find at convenience stores or gas stations, the newspaper classified ads, CarMax etc.
Make sure you ask to see the person’s driver’s license to make sure they are who they say they are. Get their current address. Take down their license plate number in case you need to find them later. Make sure the person selling you the car owns the car and that their name is on the title. If they are not the owner, then usually they do not have the right to sell the car. Go to the bank or the DMV to exchange the money for title so that the title can be notarized over to you. If the seller has to send away for the title, do not pay the full amount until you receive the title. Again, get receipts and promises in writing. Any warranties on the car need to be in writing. For instance, if the seller agrees to do any repairs for the first 30 days, get that in writing and make sure that you indicate which repairs and that it includes parts and labor. Otherwise, you are responsible for anything that goes wrong with that car as soon as you drive it off the lot or from the person’s house.
You should do a purchase agreement or have some type of receipt indicating the date of purchase, the name and signature of the person from whom you purchased it, your name, the year, make, model and VIN number of the car, the full purchase price and any other terms you agreed to such as warranty, car repairs etc. Also, you must have a NC driver’s license to register your car in NC and you must have insurance in order to get a driver’s license and to register the car.
Again, beware of the words “As Is.” If the car is sold “as is” that means that the seller makes no guarantees toward that car whatsoever and that you assume all the risks that there could be something wrong with the car. The seller will be not be responsible for making any repairs whatsoever. If the seller makes any oral promises about doing any repairs to the car, those are not valid unless they are made in writing.
Get a receipt for any money you pay for the car. If you are paying a down payment before you purchase the car, make sure you get something in writing to say whether or not the down payment is refundable. Usually it is not because the owner will indicate that they took the money to hold the car for you and kept it off the market while you were considering a purchase. Do not ever pay in full for the car until you get the title. If for any reason the seller has to write to get the title and get it to you after the purchase, make arrangements to hold some of the money back until you have the title in hand.