Hacking the Used Car Purchase

I'm surprised they didn't mention "Have friends", which can often save far more money than any of the listed tips.<p>It's worth remembering that you are not the only person that you know that buys cars. Often friends and relatives are considering buying a new car and want to get rid of their old one in an easy way. Make sure you let them know that if they are going to trade-in that you might be interested in their old car.<p>My brother's first car was a Subaru with 250K miles that our friend's family was replacing. Instead of trading it in my brother offered $50 for it. They decided to give it to him instead.<p>My first car was a Corolla that my uncle was going to trade in. I offered him the trade-in quoted price ($1500). Two years later I sold it for $3600 on Craigslist. I would have gladly sold it to a friend for $1500 though.<p>There are plenty of people that like to buy cars from dealers and do not want the hassle of craigslist and are willing to trade in. If you're in the market for a car, make sure your friends and family know!

1: Dealers cost ~$2800 more on average, but they may also provide $2800 of value to some people. For instance, many dealers add a 6 month warranty, clean up the car. More importantly, buying from an affiliated dealer can be seen as safer because too many complaints can cause the dealer to lose their affiliation.<p>2: I was the impression that the standard scam for trade-ins was to inflate the trade-in value. It makes a customer feel better if they get $500 more for their trade-in than if they get $500 off the price of the new car even though it works out the same.<p>3: Buying luxury later does not necessarily save money. Some brands depreciate more than others. Toyota &#38; Honda depreciate the least, but BMW is pretty close.

I recently asked a seasoned friend about buying cars off Craigslist after being frustrated with all the SEO spam I found on Google. This was his response:<p>Well, all states are slightly different with how they deal with car registration and ownership titles. The way it works in most places is that every car has a piece of paper that goes with it called the title. The title has all of the current owner's info on it, as well as the Vehicle Identification Number (VIN), and when you're selling a car, there's an area on the back you fill with the new owner's info, car mileage, and seller's signature. This area on the back counts as a "bill of sale". It used to have to be a separate document that was kinda written up in legalese; "I, ______, sell this 1997 toyota corolla (VIN #SDFSLJDKLSJGD52345234) to ______ on this day, may 18th, 2008 for 42 dollars. Signed, Seller: ______ buyer: ______" But in Colorado they've integrated this into the bill of sale, so you don't need to do this anymore here. The most basic way to determine if a car is stolen is if the seller has the title that matches the VIN stamped onto the car. If you have a signed title/BOS and the car it belongs to, its kinda like a endorsed check, anyone who wants to own the car just now needs to write their info in on the title and take it to the DMV. If they don't have a title, don't buy the car. It might not necessarily be stolen, but it might be, and its a HUGE pain in the ass to get a 'replacement' title made for a car, especially if you don't own it. In California, titles may be called pink slips, which I'm sure you've heard of if you've seen any of the 3 Fast 3 Theerious series. I believe they function the same as CO titles, from what I'm reading. Here's a list of everything you need to transfer the car to your name after you have the car and title in hand: <a href="http://dmv.ca.gov/vr/vr_info.htm#BM2522" rel="nofollow">http://dmv.ca.gov/vr/vr_info.htm#BM2522</a><p>Sounds like you need the endorsed title, probably with your info on it, and a smog certification (which you'll either get this from the seller (in CO the seller is legally required to have the emissions tested before selling vehicles, but this RARELY happens), or have to find an emissions testing place and go there yourself with the car). With these, you can go to a DMV and get the title put in your name, and they'll give you plates. View this video: <a href="http://apps.dmv.ca.gov/vr/vrvideos/title_transfer/title_transfer.htm" rel="nofollow">http://apps.dmv.ca.gov/vr/vrvideos/title_transfer/title_tran...</a> - Shows you where to sign and everything. This is very important; if the seller fucks up his/her name on the title when signing it or something like that, it MAY void the title, and you have to get all this other shit signed and come back to the DMV and wait in line forever again and again. Bring a checkbook to the DMV, sometimes they don't accept credit cards. I think that about covers the legal parts of buying a car/registration.<p>As far as buying a car from CL in particular, you'll probably end up bringing cash, but leave it in your locked car til you decide you want to purchase said vehicle and see the title. Ask them if they have a smog certification or any of the previous records, if it can't pass emissions, you can't get it registered, which is coincidentally a great time for a car to be sold. Granted, most cars ought to pass emissions fine until like 200Kk miles. If the engine visibly smokes, you're probably fucked. Ideally, the car won't have been run before you see it, so it'll have a cold engine, this is the best time to see how the engine behaves; does it smoke? does it start up easily? Other major things to consider are leaks of any kind - BRING A FLASHLIGHT. An engine with no leaks is best, but a leaky engine isn't always bad; leaks coming from the top of the engine/where the headers are are bad, might be a head gasket blown. Leaks from around the oil pan area are common, and all that means is that you'll have oil stains on your driveway and have to remember to top off the oil every now and again. Check the oil level of the engine to make sure the owner isn't a jackass. Transmission leaks are the same, not too dangerous if you keep the oil level good, but generally, most people are too lazy to keep up with this shit so it gets broken. Just buy a car with no leaks. Drive the car, make sure it tracks straight down the road; if it doesn't, it might mean that it was crashed and the frame is bent, or maybe the alignment is off because they curbed one of the wheels bad. If you're feeling paranoid that its been wrecked or something, you can call ahead to get the VIN # and get a Carfax report on the car, which shows its whole history of <i>reported</i> accidents. Anything large enough to warrant not buying the car will be on this report, minor fender benders may not be. Make sure the transmission shifts into ALL gears, I got screwed on this once, transmisson had 6 gears, but I didn't take it to a highway or even try to put it in 6th while testing it out, and low and behold, the 6th gear is out. Listen to the engine for any abnormally loud "click" type noises - every engine's valves click a bit, but they shouldn't be too distractingly loud. Make sure all the lights/signals work. People who are too lazy to replace a blinker bulb might be too lazy to change the oil on time... I can't think of much else, and I've been typing for like 30 mins... The only piece of advice my dad gave me before buying my first motorcycle was, "if it looks good, and sounds good, buy it." Basically, look out for any red flags, but by and large, most people are legit, most cars aren't lemons, and any serious issues with the car should be pretty obvious.

I'm not sure that I agree with everything here.<p>Buy a used Benz - Luxury cars are great, until they aren't. Someone who doesn't realize what luxury car parts often cost will cry when they get a bill for a $750 spark plug wire kit.<p>Craiglist - Selling a car on Craiglist is great, except that people you'll subsequently dealing with are folks who buy cars on Craiglist. Have fun with that.<p>To truly "hack" the used car purchase, you need to buy the cars that nobody wants. "Honda" and "Toyota" shouldn't be in your vocabulary. If you want a Honda, get the certified used one with a better warranty than the brand new one.

why is everything that involves thinking is now called "hacking"? Buy from Craigslist is really a hack? Seriously? Carfax report is a hack? That's pretty lazy. Car arbitrage is a hack - checking a car's title is minimal effort.

But what about the time investment needed in finding an acceptable car on Craigslist compared to finding one from a dealer?<p>If you're spending something like 100 bucks and 20 extra hours over three weeks checking out N more cars that don't pan out because {the guy lied about the condition of the car, the guy selling it is really sketchy, other random reasons}, then is it still worth it to save an extra 1-2k?<p>What I'm trying to ask basically is "but what kind of opportunity costs are involved in these hacks, and when does it stop being viable"?

Be a little careful with some of your analysis. For example, you mention a Mercedes e320. There is no such thing anymore. So the last year or a previous generation vehicle is certain to depreciate more steeply than the first year of a new generation.

As someone who has been buying cars for himself for 20 years or so, and never new, I would agree with the article in part, but with some important provisos:<p>1. While Craigslist is a valuable resource, make sure you follow Hack #4 and #5 - there are a lot of sleazy individuals who will pass salvage title or otherwise garbage vehicles. I would add one other note to that recommendation - search via the 'by owner' listings vs the 'by dealer' ones. That cuts down some (but not all) of the buy here/pay here trash-lot stuff. Searching for larger dealer vehicles can be done via something like autotempest (which also conducts Craigslist searches too)<p>2. While buying via Craigslist is generally easy and definitely recommended in many situations, selling can sometimes be a complete PITA. Dumping the car at CarMax can work as well in that case. You take a bit of a hit on the sale price, but its generally less in my experience than trading it in.<p>3. Sometimes there is a damn good reason why Luxury cars have taken an appreciation hit. Make sure you factor in scheduled and unscheduled maintenance with your purchase plans. Some luxury brands (Lexus, some Infiniti, Acura) are easier to maintain than others, but they inconveniently don't seem to depreciate quite as much. One thing I would add here too is - If you don't care about your image too much, look into 'old people's' cars. Things like the Cadillac DTS, Lincoln, Mercury Grand Marquis, etc... Because they are so unfashionable, the depreciation hit on them is HUGE, and you can really get decent, comfortable transportation for cheap. The gas mileage might not be as good as a Toyota, but $5k in savings can buy a lot of gas...<p>4. Carfax is important, but its not foolproof, and its no substitute for a good mechanic's inspection. What I look for is a gap-free history with no dramatic changes in mileage, and no record of fleet ownership. Why no fleet ownership? Have you ever abused a rental car, or known somebody who has? I would never buy an ex-rental, and would have a hard time looking at other ex-fleet sale cars - the incentive for responsible ownership is very often not there, even if scheduled maintenance <i>may</i> have been more rigorously followed.<p>5. In some cities there are 'Lemon Buster' services that can travel to the dealer/owner and inspect the car on-site. YMMV of course, but I have found them to be pretty useful and inexpensive. They also give you a nice inspection report that can be used as negotiation leverage.<p>Additional points to make:<p>Financing - unless you are a very savvy negotiator, I would NOT recommend dealer financing over bank/Credit Union financing (especially CU.) Financing/Dealer Fees are a huge source of income for dealers, and they typically have some real hard-asses stationed at the financing desk. Much easier to just pay with cash from the CU or your pocket. Paying ahead, by saving money for your next car instead of making payments for the current one is a very savvy move if you can get away with it.<p>Used car prices are highly localized. Where I live (Austin TX,) I have found that 2-5 yr old used cars are typically about $1k more expensive than cars in larger Texas cities like Houston and Dallas. Make sure your internet searching takes this sort of variance into account. If you save $1-2k on the price, a $150 one-way plane ticket is pretty cheap. For those in the rust belt, I would not even bother with buying used vehicles past a certain age locally - why take the chance on hidden rust issues?<p>Rule of thumb for used car purchases - there are always more cars! Don't EVER think that the car you are looking at is a special flower and that you will never find one that's the same. ALWAYS reserve the option to walk away. I personally walk-away from most cars I look at. Don't like the lot/seller? Walk away. Not getting a good feeling from the car? Walk away. There are always other options.<p>Finally, I recommend the book 'Don't Get Taken Every Time' by Remar Sutton. Tons of good info on how to avoid some obvious pitfalls for both used and new car purchasing.

I purchased a used car last year. I would have to say part of buying a car is also the financing. If you can manage to get a good rate and put some cash down, thats a hack in and of itself.<p>As for not trading your car in... I understand you might get more $ selling it on cars.com or craigslist, but the truth of the matter is you can be stuck with your old car forever and all you wanted to do is get rid of it and on with the old one. For some people thats worth the moneyit will cost them by trading it in.<p>I had an experience with a honda civic. Lady said she loved the car. I was asking the lowest bluebook minus 500. It was in better condition than that, but we both found it fair. When she came to pick the car up, she saw I had dogs and panicked about her allergies and this and that. I reassured her I had the car detailed and the dog hadn't been near the car since. No deal. I was fed up and traded it in. Lost 1500, but I would have happily paid that to not deal with the lady.

As a gearhead, nearly everything on that list is ingrained in my DNA, EXCEPT buy luxury(and performance) later. My reasoning is that technology is improving so rapidly that every new model of most cars have made gains that are ridiculously high compared to the previous generation. Cars are my passion and the one thing that gives me joy no matter what mood I'm in, so I'm willing to fork out the extra money for the newer, better performing models.<p>I found both of my cars on craigslist and one of them was a steal. It was listed for about $5k less than the market with some incredible upgrades AND it was through a dealership, so I just figured they were clueless. I went and checked it out, brought it to an Audi dealer for a PPI and everything checked out. I also added on a 3 year drivetrain warranty and I still ended up saving around $3.5k compared to what similar cars were going for.

Were the datapoints all from one market (SF Bay Area)? Or across multiple regions in the US?

TL;DR version: Buy and sell used cars on craigslist instead of dealers cuz you'll get a better deal. Don't forget to carfax it and take it to a mechanic for inspection.

You are using the sticker price for the basis of comparison, which is unrealistic. The appropriate comparison is final sale price.<p>Regarding trading in a car, I'm not sure if most people in the HN audience really think that they are getting a good deal on trade-ins. Also, trade-ins can be negotiated. You aren't going to get the market price, but you give up some money for the easy liquidity. It's going to take some extra work for you to get the market price.<p>Also, when you buy a used car from a dealer, you should look up the "Black Book" price, which is generally the price the car would go for at auction. This gives you information on the dealer's bottom line. The Black Book price is going to be a lot lower than Blue Book, meaning that it's well under the market price, and really well under the dealer's sticker price. But using this number, you know the dealer's position, and can adjust yours to drive value for both parties. I don't think it's totally inconceivable to get a used car from the dealer for close to what you'd get it from a private party, as long as you're willing to negotiate and the dealer is willing to negotiate.

Overall this is a helpful list. One of the biggest challenges with used cars is they are impossible to treat as a commodity. I spent several years working for a company that financed high-end classic and exotic autos. I learned a ton. One of the biggest tips is you really need to profile the owner if you want to get car that was well maintained.<p>I like luxury cars (BMW's, Lexus, etc) and over time came up with a system for purchasing used ones. Search CL and local want-ads in affluent suburbs. Eventually you will find 1 owner cars with low miles owned by people with the means to take proper care of them. Ask for the maintenance records, look at the condition of the interior and also look for clues on how the person takes care of other things like their personal appearance AND their home. It will tell you everything. I've gotten some killer deals on pristine cars following this method. Currently on the hunt for a late 70's air cooled 911 :)

Here's my hack, that may not be acceptable to everyone: pay cash for your car, settle for whatever you can afford, pay yourself car payments. Buy something ugly. I stared with an $800 POS and made it last for 3 years...I paid myself a modest $250/month "car payment" during that time, so I ended up with $9k in cash. Finally got tired of driving that thing and it just wouldn't die, so I kept an eye out for used cars in my new price range. It took a while because I was just searching off and on, but eventually I found an especially ugly Scion xB (bright yellow edition) that had been on the market for a few months with no interest, so they were already asking significantly less than KBB value, since I was paying cash I got them to take even less for it (after having my mechanic look at it of course). Of course if you mind having a goofy looking car, this strategy might not save quite as much money.

More like common sense car buying, not really "hacking". As others have mentioned, don't rely on Carfax. I sold a car that had to be almost a quarter re-built (and disclosed this to the buyer), and this was not on the Carfax report. But, it's still worth doing.

I take Hack #1 with a grain of salt. The more important thing is to know what the car is worth and what you're willing to pay. You might be able to find a deal on craigslist, but you can also negotiate with dealers, and they often inflate the sticker price. I bought a used car recently. One dealer was overcharging and rejected my offer so I walked. I ended up negotiating hard and got a better deal elsewhere. Also, do your homework. From the timestamp on the google cache of an online isting, I knew how long the car had been on the lot. This turned out to be a useful bit information during the negotiation.

<i>Better</i> Hack #5: Be your own mechanic. Cars really aren't that complicated - especially for smart hacker folk like us. I did maintenance on my parents vehicles when I was 12 years old (brakes + oil changes) and have been working on my own vehicles since I could drive. In the past 7 years, I have only spent money on alignments and tire mounting/balancing, to the tune of $300 probably. The kicker is that I'm no more mechanically inclined than anybody else. I learn every time I pick up a wrench, with a bit of help from the good ol' internet. The experience is unbelievably fun and rewarding :)

It's interesting to see how close the KBB value mirrors the Craigslist price. I'm guessing the only negotiation points are the condition of the car.<p>Thanks for the helpful post, I'm about to sell my car.

There's an old adage in the car world: there's no such thing as a cheap luxury car.<p>You might save on the initial purchase, but there's a lot more stuff to break, and when it does it's really expensive.

No mention of auctions. Among my friends it is common to buy at an auction. Only registered car dealers are allowed. I guess I am lucky to be able to go through some. They ask a flat fee of $500 and they will buy the car you want at the auction. I am not an expert at it, so I was wary and I actually bought a new car at what I thought was a good price. Next time I will have to go for the auction, especially since the 'hackers' here don't even mention it.

I said this the first time this site was posted. It is brilliant and helpful. It is actually the first helpful site I have found here on HN for my personal life.

I wrote a cool script to pull a lot of data down off of KBB. I've got a post on my blog about it:<p><a href="http://www.undiscoveredfeatures.com/2011/09/kelly-blue-book.html" rel="nofollow">http://www.undiscoveredfeatures.com/2011/09/kelly-blue-book....</a><p>What I found interesting was comparing the rate of depreciation per mile vs time.

I just learned about AutoGlance, which is a "Hipmunk for car buying": for example, <a href="http://autoglance.com/search/#Mercedes-Benz,eclass,50,29492" rel="nofollow">http://autoglance.com/search/#Mercedes-Benz,eclass,50,29492</a>

Excellent post. I think the most enlightening item was "Buy Luxury Later." I tested out the searches for cars that were suggested, and wow, there are some great deals on CL.

I'm curious how you approach #5 Find an OCD Mechanic to a Craigslist seller. How do you ask? Is it considered common courtesy to say "Hey, lets drive it to my mechanic?"

I wonder what effect the "cash for clunkers" program had on cars below the rebate incentive for that. It had to have a substantial effect on market for older cars.

I bought a 2007 Honda Civic that had done 24K miles when I bought it (2009). I put down ~$10K for it. I did almost everything they mention here.

Thats not really hacks, thats common sense.<p>Want a hack ?<p>"Wash your car before you try to sell it"

Ah, car purchases: the land of endless advice. So let me share my method, requested by nobody:<p>1) I limit my purchases roughly around to one month's net salary. This keeps me aligned with the idea that I invest in the kind of transportation I enjoy rather than something that's newer and shinier than my neighbours'. My cars are never just boring transportation vehicles: the style and feel of the car is of most importance. However, I'm perfectly happy to drive cars that is ten years old.<p>2) I intend to keep a car for 5-7 years. I get to pay for routine maintenance and any worn parts for so many times for the $10,000-$20,000 that I could've put into a newer car (and still pay for maintenance and replace parts, just little less of it). I'm not afraid of big rehauls if the car is otherwise sound. There's one exception to the longevity rule two years ago: I changed makes.<p>3) When I'm changing, I don't particularly shop for cars. I'm rather in the constant "nah, I don't need a new car right now" mode and gradually spend some time browsing used car sites on the internet. When I get interested in one I get this feeling inside. I check a few facts, go check it out, and most of the time just buy it if my hunch keeps going. I think I've never test-driven more than one car, the one I bought. Some I've discarded without a test drive. Contrary to what you might think, I've always had good, reliable cars. And I certainly don't drive the boring Toyota/Honda kind.<p>4) Facts include such as the ownership records and tax/MOT records, and average mileage. For example, the previous owner of my current car kept it for a steady seven years with full maintenance == good. He kept it as an investment to his transportation needs instead of a cost sink that only gets half the minimum maintenance. Also, if there are several cars of that model that have clocked hundreds of thousands kilometres, I know the engine is capable of doing it without problems.<p>5) I buy my cars around at 200,000km. If the car is in proper order at that point I know it's not a lemon and has been maintained. Most regularly worn parts have been changed once, maybe twice by the time. The worst cars are those that are being sold around 100,000km or slightly below: you can probably make 100,000km without ever changing oils, not to mention anything else. If so, the car is bust and it won't make it to +200tkm. Anyone who spends the effort to make the car into those figures has had it for some useful purpose.<p>6) I'm fully aware that I might bump into a bad car eventually. This is where 1) comes into play. The amount of money I spend is over the lifetime of the vehicle instead of up front, so that I can afford to hit an occasional bad one. None encountered so far.<p>I still haven't spent as much in cars in total and in my whole lifetime than my dad just spent on his latest new car. I've been driving and owning for about 15 years now.

Selling a vehicle on Craigslist has been among the greatest annoyances in my life. I will never make that mistake again. Instead, I sell vehicles on eBay. The eBay method has a few hassles (answering questions, coordinating pickup, eBay percentage), but it is still <i>sooo</i> much better than dealing with CL flakes.<p>That said, I <i>buy</i> all of my vehicles on Craigslist. I wait for the exact vehicle I want, show up with a cashier's check for the asking price minus ~25%, and bring the rest in cash for negotiation. Sellers are always relieved when they find out I came prepared, and they're happy to negotiate on price to be done with the process.

pretty obvious advices. really. but good to see the data points.<p>...now make a post on how to find a decent mechanic, and then i will droll over