Where you buy used cars

You’ll find used cars for sale in many places. In fact, today it’s not uncommon to buy used cars from Internet ads, on eBay or even on free public websites such as Craigslist. But the most common way to buy a used car is still face-to-face.

Almost all new-car dealerships also sell used vehicles, usually from the same manufacturer as the new ones on the lot. Many of the cars that a new-car dealership sells are off-lease automobiles, which are turned back in to the dealer after their users’ lease terms end. Off-lease cars — which comprise most of those sold in certified pre-owned programs — are usually about two to four years old. Because leased cars tend to be kept in good condition under the terms of their leases, off-lease cars are good options for many used-car buyers. In addition, new-car dealers will also sell pre-owned cars of any make and model that were trade-ins from other customers.

Used-car dealerships

Some dealerships specialize in used cars. Used-car dealers may have a bad reputation — and indeed there are many stories of unsuspecting and uninformed consumers who have been victimized by unscrupulous dealers. However, the vast majority are legitimate, and may offer lower rates and prices than new-car dealerships. Some used-car dealers may offer financing, insurance, extended warranties and other programs.

Before working with any car dealership, new or used, it’s smart to run the name through your local Better Business Bureau or your attorney general's office to check for prior customer complaints.

Off-rental vehicles

Another way to buy a used car is directly from a rental car company, selling off-rental vehicles that they’ve taken out of service. Major car rental companies sell their used cars, sometimes at their own locations, other times through franchised used-car dealers. These companies tend to offer limited selection of fairly new models, will provide maintenance logs and may offer warranties.

Private sales

Another way to buy a used car is from a private party, the individual who currently owns the car. But before you buy, there are a few things you need to check. First, as with any car, check the VIN and registration — as well as the title, if possible — to be sure the person selling the car is its actual owner. Remember to ask for all maintenance records and a vehicle history. And insist on taking the car to a mechanic for an independent inspection — offer to leave a security deposit with the seller if he or she resists the idea.

In order for an individual to sell a car, he or she must pay off any lien on the vehicle, if there is one. A lien indicates that money is still owed on the car or that the vehicle has been used as collateral to secure a loan. The bank or finance company that lent the owner the money to buy the car won’t release the title until the lien is paid off. You will know if a lien has been paid off if the car’s title states the lienholder’s information with “lien satisfied” stamped next to it. If there’s no stamp but there is a lienholder shown on the title, the owner still owes money on the car and can't legally sell it to you.