Sunday, April 21, 2013

More adventures in buying a used car through Craigslist

In a recent post, I exposed a common scam on Craigslist where the fictitious seller places an ad and attempts to lure an unsuspecting customer into sending money under the promise that the car will be shipped and if there is any problem the customer can obtain a refund through PayPal, Google, Western Union or some other intermediary.  I am saddened to report that our search continues for a reliable and affordable auto for our daughter who will need transportation when she takes on a summer internship with GE.  For better or for worse, I'm trying to behave myself this time and work in partnership with my spouse in this endeavor.  It has not been easy.  While we have not settled on a car, it will not stop me from rambling on about some lessons learned in the process, some of which may be of benefit to buyers and sellers of used cars.

1.  A reality check can be a good thing. 

Prior to starting our search, I reached out to a friend, C who owns Collision Recovery, an auto body shop in Delmar, NY.  I asked, C, if there was somewhere he would suggest to look for a reliable used car for around $2000.  His brief response was to inform me that a $2000 car was about the equivalent to a $200 car when we were kids (ok, I didn't think I was that old) and that a more realistic budget was around $3500 - $4500.  I have no doubt that C is 100% correct, but who says I want to be realistic?  I can dream; can't I?  (Incidentally, if you are in the Albany area and have the need for auto body work, I would unhesitatingly recommend Collision Recovery in Delmar.  I have no doubt that C provides honest and quality work).

2.  Just because the seller is local, doesn't mean you won't be scammed.

Some private sellers are in the business of buying and selling cars.  In our quest, my wife and I had planned a trip to nearby Herkimer, NY to see Mike about a Civic.  Turns out Mike wasn't exactly the private seller he made out to be.  Similarly, Jason sounded earnest with the Civic that he had for sale; explaining that he was from a Honda family.  His current car was an Accord, the Civic came from his mom who is driving some other Honda... then about 4 days later, I noticed Jason was selling mom's Plymouth... hmmm, 2 moms, Jason?  Another, name forgotten, seller responded to the routine "how long have you owned the car question, "3 weeks."  My point here is that I don't mind anyone making a profit from their knowledge of cars, just be up front about it.  I believe if you work at it and take the risk, you're entitled to make a profit.  In fact, what you should be doing is letting the seller know that this is what you do and based on your vast experience and knowledge of cars, the car you are selling is a great car at a great price.

My ideal seller is a local seller with a car that is currently on the road, being driven regularly and a motivation (reason) for selling that makes sense.

3.  Conduct a "pre-search" to your "search".

For anyone like me who does not frequently buy a used car, I would recommend that you pledge not to buy a used car for 2 weeks while you regularly watch Craigslist (and maybe the classified ads of your local newspaper).  There are 2 benefits that I readily see from this strategy.  First, you become familiar with what the common offerings are for your price point.  Second, you can start watching for those "private" sellers who are operating more like a business.  You can do this by reading the ad - many of these folks will use the same type of jargon - maybe all caps for certain parts of the add or even the same phone number.  If a certain ad looks interesting take a unique part of the ad - such as 3 numbers from the phone number like 463 from 518-463-9999 and run a search in Craigslist.  You may be surprised to find that that this "private" seller has listed 4 different cars within the past few months.  Also, scan the pictures and assess the background.  Are other cars pictured?  (Particularly other cars without license plates).  Are you noticing ads for different cars that seem to be in the same parking lot, have the same garage in the background, etc?

4.  Make sure you look at the title BEFORE you hand over the cash.

Verify that there are no liens showing on the title.  Also, there is such a thing as a "Salvage" title.  Essentially this means that at some point, the vehicle was deemed "totaled" (damaged to the point where the cost of repair would exceed the value of the vehicle).  In one exchange, the seller related that it was a "Salvage" title, but the car had given him no problems.  I am leery of Salvage titles as it clearly conveys significant past trauma to the vehicle and it is difficult to assess whether there still may be hidden damage.  Likely, others feel exactly the same which in turn significantly reduces the market value of the vehicle.

5.  Use Google as a tool. 

If you find a vehicle that looks interesting, Google the year, make and model.  Sites such as Kelly Blue Book, Edmunds, CarGurus, etc. can provide excellent information in regards to the used car value as well as reviews from consumers.  I would also encourage you as part of your "pre-search" to Google, "How to inspect a used car".  You will find that there are many resources on the internet, including some great You-Tube clips that can help you feel a little more competent in your search.

If you get the seller's name either by email or phone, don't hesitate to Google it!  I googled Mike from Herkimer and was shocked to find that Mike had outstanding issues relating to taking deposits for cars.  (I will note that there could be another side to the story.  If Mike is in the business of selling cars, it is very possible that over time he would run into a bad buyer.  I would not be surprised to learn that there may be bad buyers out there who place deposits on cars to "hold them" and then they find something they like better - essentially, tying up the seller from completing a sale.  Once again, if you are a car "flipper," honesty is the best policy; use your knowledge of cars as an asset to both you and your perspective customers.)

6.  Don't rule out your network, but don't fool yourself that they are your best bet either.

Midway through our search, my wife announced that she may have a line on a good used car.  She related that she was talking at work and so and so knew someone who had a car she thought they might be willing to sell, yada, yada...  While I won't rule out such a possibility, I have a healthy dose of skepticism as well.  This includes the impact on relationship if the transaction goes bad as well as whether dynamics of the relationship may change to "one up, one down" whereby one is felt to be "owing" the other.  Additionally, unless one is a close relative or dear friend, I just have a hard time imagining a "friend of a friend" offering a great deal on car that would be much better than what is generally available on the open market (which also has the advantage of not complicating a business transaction by degrees of "friendship").

7.  After you have done your homework, have cash on hand and be ready to go immediately.

Unlike shopping for a new car where they routinely have many cars immediately available or quickly accessible, when you are shopping for a used car, particularly a low priced car that is reliable and road worthy from a private seller, you need to be ready to act quickly.  Typically, these sales are first come first serve and the legitimate ones will go very quickly.  In my experience, that I thought would be best bets (all priced below $4,000) were sold within 24 hours of posting on Craigslist.  Due to the high demand of this price point, it may be worthwhile to utilize a smart phone or iPad Craigslist app that provides alerts or notifications when a car that meets your desired criteria is newly posted.

Conventional wisdom is to always have your mechanic or garage check the used car before purchasing.  This advice sounds great on paper, but gets less practical as the price point narrows.  Most buyers simply do not have a mechanic at their beckoning call and most sellers of low priced cars are not going to want to wait for you to schedule an appointment at your garage for their $1200 car when they have 7 other interested buyers waiting in line with many likely able and willing to buy the car without this additional hurdle.  Thus, for very low priced used cars (under $4,000), you need to be prepared not only to go immediately, but also be prepared to make a decision promptly after your inspection.  Since you are likely to be on your own (without the guidance of a mechanic), it is even more vital that you do your homework (revisit 3 & 5 above) before you make an appointment to see a used car.

If you're out there and looking for a good used car, good luck to you... unless you're going for the same car that I'm going for in which case I hope you loose your internet connection and your phone dies.

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