How do you know if a used car dealership is trustworthy?
February 25, 2012 7:13 PM   Subscribe

Should I even bother looking for a car at a dealership? If so, how can I tell which dealerships will try to rip me off?

I'm in the market for a new-to-me car, hoping to get something reasonable for around $5500.

The first and last time I went to a car dealership to help a friend find a car about six months ago, they put us in this POS with a $5000 sticker on it. We drove it to a mechanic who said "This car was put together out of a junkyard. It has been in numerous accidents. Do not buy this car."

I find that absolutely unacceptable. Knowing that dealerships will do this, why would anyone try to buy a car at one? What are good reasons for me to poke around a lot? How do I know if a dealership is trying to slip me a 3-accident corolla at the same price as a decent shaped one?
posted by rebent to Shopping (19 answers total) 4 users marked this as a favorite
I haven't bought that many cars in my life, but I have had the best luck at new-car dealerships with good used inventory, rather than exclusively used-car dealers. I would never go to a used-car dealer.

Most dealerships list their inventory online now, so you can look for what you want and then go check it out. This also gives you a chance to run a Carfax report, since they usually list VIN numbers too. Carfax will at least tell you if the car has been totaled, if nothing else.

Also, look beyond the brand that you want to buy; I got a used Nissan Altima from a Ford dealer once, and it was a great car.
posted by cabingirl at 7:28 PM on February 25, 2012 [1 favorite]

You know by doing what you did; taking the car to a 3rd party mechanic. Car buying sucks, but pre defined criteria helps beyond a set price range.
posted by oceanjesse at 7:35 PM on February 25, 2012

It'd be hard to find one that didn't. Used cars generate major profits. That, and in the US the average age of cars on the road is rising. There is a shortage of used cars now, and the prices reflect that. It is not a good time to buy a used car.
posted by narcoleptic at 7:37 PM on February 25, 2012

I've always found it useful to have a relationship with a car dealer. After twenty years in my community, working with the same dealer, the same sales person, I was able to purchase both new and used cars with a phone call, and trust I would get a decent car, a good price, and excellent service. It takes a while to develop that type of relationship, and, if you're new to purchasing cars, the best way might be to find someone who's already done that legwork (a relative, friend, boss, someone a bit older who has taken this route). Get a recommendation from someone local, ask them to make an introduction to a dealer/sales person that wants both their continued business, as well as yours.

Not every dealer is out to shaft you.
posted by HuronBob at 7:39 PM on February 25, 2012 [3 favorites]

I just went through buying a used car, albeit my budget was significantly higher. The $5000-7000 range is quite tough. Lots of people want to get cars under $10K and as a result there are slim pickings.

I ended up test roughly 12 driving cars at six different dealerships, and took two to my mechanic. The ones that I drove and decided against were either not to my liking (model, year, mileage or price) or had obvious issues. For instance: I drove a Nissan Frontier that was way off in alignment, indicating to me that it was either wrecked or not well taken care of. Of the two I took to my mechanic, the first was a no go. Mechanic found that the front end had been largely replaced, and there were some obvious defects with the repair.

Not that it would help you, but the car I ended up buying was a certified pre-owned with a clean history and no issues at the mechanic. Then again, it was a $15K car. There are no certified pre-owned cars at $5K.

With a car in your price range, expect to have to go to multiple dealerships. Beware any dealership that refuses to let you take a car to your mechanic. If the salesman are extra-pushy, feel free to walk away. Google "car salesman scams" and read up. The Consumerist has a lot of excellent articles. Read anything thoroughly before signing.
posted by Mister Fabulous at 8:05 PM on February 25, 2012

You can't.

Look, even at a good dealership, the sales person you work with might not know a damn thing about cars. Or even that particular car. The car is what the car is - almost all signs of trouble are there if you know how to find them.

The quality of a dealership or salesperson is almost entirely unimportant in light of that fact.

You need to rely on your own trusted sources of information about cars to determine if a given price on a particular auto is a good deal or not. If that source is not you, then a good mechanic is invaluable. But you need to assume that the dealership and the salesperson is unreliable and work from that.

Even if you can assume that the salesperson is honest and helpful, you still need to be on your guard. Mistakes - honest to god mistakes - happen all the time. Typos on contracts, lost paperwork, etc, etc. So, even if you have an angel as your sales dude, you still need to watch the entire process closely.

So, if you are unsure or whatever about a given car - it's fine! Time is on your side. Walk away and think about it. Look up that model and year on the internet. Learn more. The world is chock full of cars, and I promise they will make more. So, go do some research and shop around and get a good feel for whats available at your price point.

I know a ton about cars and I would spend at least a week, and probably closer to a month shopping. So, take your time, and don't be pressured to buy if you're not satisfied with the purchase.
posted by Pogo_Fuzzybutt at 8:48 PM on February 25, 2012 [2 favorites]

I think what's most important is doing your research ahead of time. You could just as easily get an unscrupulous owner trying to sell you a lemon as a scammy dealership.

Before you go out to buy a car, check out reviews to narrow down the makes and models you're interested in, check out Edmunds and the Kelly Blue Book values to figure out what you should actually be paying for the cars you're considering, look up the Carfax if you can get the VIN, etc. Then you won't get blind-sided once you're actually ready to buy. The mechanic call was a good one.

You have to be ready to leave if you run into someone who won't work with you and isreally pressuring you, too.

That being said, not all car salesmen are out to shaft you. If you live in a small town, for example, they can't afford to get a bad reputation around town or they won't have any repeat business.
posted by misha at 9:01 PM on February 25, 2012

cabingirl: "Carfax will at least tell you if the car has been totaled, if nothing else."

Two days ago this story was published on the Consumerist about a buyer who bought a car before the accident report made it to CarFax.
posted by IndigoRain at 9:06 PM on February 25, 2012

My point being, don't rely solely on CarFax; take it to a mechanic.
posted by IndigoRain at 9:07 PM on February 25, 2012

This comment does a good job of explaining how to buy a car, I think.

The key is to know exactly what you want and exactly how much it's worth to you. If you do your research beforehand the dealer can't rip you off because they can't tell you anything you don't already know.
posted by no regrets, coyote at 9:13 PM on February 25, 2012 [1 favorite]

Pogo_Fuzzybutt has it. This really is the starting point:
But you need to assume that the dealership and the salesperson is unreliable

There are decent car salesmen, but you won't know which they are at first visit.
posted by anadem at 9:25 PM on February 25, 2012

It's really difficult, especially on a low budget. The last time I went car shopping (and my $ limit was slightly under yours!) I had to hunt through a lotttt of junk before finding something good. That said, it is entirely possible, if you do it smart.

First, educate yourself on what you can reasonably expect to be able to get for your buck. Do some googling, kelly blue book browsing, and craigslist classifieds stalking. Figure out what used cars in your preferred models are going for in your area. Prioritize what your major qualifications are. Be realistic, but be smart. The dumb car buyers are the ones who see a couple random cars and say "oh yeah, that looks cool" and buy the second one they see. Don't do that.

Once you know what your goal is (x or y model,
Then whether it's a private owner or a dealer (they can both be shady, or not, so it's really the same thing) - Be assertive. Ask lots of questions. Read the small print. Negotiate. Ask more questions. Did I mention to read the small print?

And n'thing MECHANIC. Do not buy anything without a mechanic giving you the go-ahead. This cannot be repeated often enough. Obviously though, you don't want to have to take 6 cars in for a once-over, so the Mechanically Minded Tag-Along Friend can be a big bonus in narrowing this down.

But yeah, do not do not trust the salesperson. Doesn't mean they are evil, but assume you are 100% responsible for yourself - because you are. Use your head, and cover your butt for anything you can think of.

posted by celtalitha at 9:30 PM on February 25, 2012 [1 favorite]

Hmm. Part of my comment got deleted when I was trying to post. That should say "once you know what your goal is (x or y model, <z miles, no major mechanical issues), go online and hunt down every vehicle you can find in your area that fits those qualifications; dealer, private, whatever. If you have a friend, or a friend-of-a-friend who is remotely mechanically-minded, bribe or cajole them into coming along with you for an afternoon of car hunting. Then go, with the full intent to look at ALL the cars on your list, and if anything raises any red flags, move along. Once you know your specs you can afford to be a little picky.
posted by celtalitha at 9:35 PM on February 25, 2012

The advice to spend some time playing with Edmund's used car values, to get a solid sense of what particular models in various conditions sell for, is excellent. If you do this and then go shopping, you'll find that the asking price for almost every used car is substantially higher than the car's typical value. Sticker prices are the MSRP of the used car market - only less-savvy buyers pay them. (I was one of those less-savvy buyers for a long time).

My standard recommendation is that you read this. There's a good chance your local public library has a copy, if only one of the earlier editions. I read it 2 years ago, and immediately went out and bought a better used car than I expected to be able to afford, for only slightly more than its trade-in value -- almost $3k less than sticker and a couple grand less than the typical dealer retail price.

Should I even bother looking for a car at a dealership?

If you prepare for it, then yes, absolutely. Dealers have an endless supply of used cars available to them at wholesale prices. They'd like to sell those cars at large profit margins, but if you give them no other choice then they will knuckle under and sell individual cars at very small profit margins because a little profit is better than no profit. Private sellers are much more likely to hold out for a higher price because once their car is gone, so is their opportunity to recoup their investment. The dealer just takes your money and buys another car, and hopes to make money on the next guy.

Whatever you do, don't rely on any dealer to protect your interests. The pockets they care about are their own.
posted by jon1270 at 4:31 AM on February 26, 2012

You have to be careful at used car dealerships. Most used car dealers in (at least in my area) get the majority of their inventory from the auto auction. Many of these vehicles are trade ins from the new car dealers that they don't think they can sell or don't want on their lot. It's been my experience that you can find good deals at used car lots but you have to be very careful and spend the time and money getting an independent inspection. On new car lots the used inventory usually consists of newer vehicles with some factory warranty left. There is a local new car dealership that offers a 100,000 mile drive train warranty on all of their used cars I bought my last used car there. The warranty didn't necessarily make or break the decision but it was a factor. The terms of the warranty were somewhat restrictive but they were spelled out very clearly on a single sheet of paper. I don't inherently trust this dealer any more than the next but they did a few things that the other dealers wouldn't do for me such as an overnight test drive. I no longer own the vehicle I bought from them but I still use them for much of the regular service work on my current vehicle. Their hourly rates are similar to the local independent garages and as long as I schedule it with them they will drop me off at work and pick me up when the vehicle is done.
posted by jmsta at 6:02 AM on February 26, 2012

My point being, don't rely solely on CarFax; take it to a mechanic.

Oh, I totally agree with that. But, since you can pre-screen inventory, if there are any serious clunkers, you would know to avoid them before you get to the lot. After all, every visit to the mechanic costs money unless they happen to be a buddy of yours.
posted by cabingirl at 7:29 AM on February 26, 2012

Just to make it clear, the comment no regrets, coyote linked above currently has 507 favorites. I was about to search for it if no one had pointed to it here; it's great.
posted by mediareport at 8:38 AM on February 26, 2012

Oh, and for what it's worth, I've found friends of friends and Craigslist, followed by a visit to a trusted mechanic who knows I'm looking for something cheap and highly reliable, to be a very effective way of finding a quality used car in the past.
posted by mediareport at 8:48 AM on February 26, 2012

Learn about used car values, so you know how much is reasonable.

Have the cars checked by a reputable third party, preferably someone who you know (ie your local workshop - the one you will be taking the car to for service and repairs).

There are no guarantees you won't end up with a lemon, but you can do a lot to improve the odds, and to weed out obvious (to someone who knows cars) bombs.
posted by GeeEmm at 7:47 PM on February 26, 2012

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