Cars sold by used-car dealers are usually cheaper, but many sell cars "as is," with no warranties or extremely limited warranties.

Also, used-car dealers rarely know the history of these cars, since they often obtain them at auctions and foreclosures. And they rarely have on-site repair facilities.

Watch for cars purchased from taxi companies or police departments; they often have excessive wear. If possible, buy a used car from a dealership that has been in business for a long time; it may have a better reputation and make good on promises.

If you buy from a used-car rental company, try to obtain the complete maintenance history of the car and buy a relatively new model. On the down side, however, rental cars often have very high mileage.

Be careful when buying a car from a private seller you don't know. Consumers often think they are buying a car from a private individual but, in fact, they may be buying from a pro masquerading as a private sellers Always ask to see the title of the car; if the name on the title and the seller's name don't match, ask why.

More than half of all used cars have odometers that have been rolled back. Although federal and state laws make it a crime to disconnect, alter, or reset the odometer, the problem is a common one.

• Examine maintenance stickers on the doorpost or air filter. Mileage is sometimes noted when maintenance is performed.

• Examine wear on the clutch, brake, and accelerator pedals and look for excessive scratches on the ignition lock. Cars with fewer than 30,000 miles should not show excessive wear on these items.

• Check the dashboard for missing screws and make sure all the numbers on the odometer line up properly.

• Check the name on the title. It should be the seller's, previous owner's, or dealer's name. Be suspicious of titles with out-of-state addresses, post office boxes, or auction company names.

• Study all numbers on the title. Disreputable sellers often obscure the numbers with official-looking stamps or staple or fold the title through the middle of the odometer reading or vehicle number.

• Ask your mechanic to inspect the engine compression and look for transmission problems and worn struts or ball joints.

Since most used cars are sold as is, it is important to try to obtain a full or limited warranty. You have a better chance of obtaining a limited warranty when buying a used car from a car rental company or new-car dealer.

Under federal law, used-car dealers selling more than six cars in a 12-month period must specify what warranties go with the car and post this conspicuously on the car. Read the warranty carefully, and question any ambiguous or confusing language. Try to get the longest and best warranty possible, such as on cost for replaced parts or repairs within the first six months of purchase or 5,000 miles driven. Negotiate for a reduced price if you do not receive a full warranty or acceptable terms. Insist that the warranty be incorporated into the final contract of sale.

1.  Negotiate with licensed dealers only.

2.  Inspect the vehicle's internal and external features. Make the inspection during the day when there is adequate light. Test drive the car, preferably alone, and listen for odd noises and other irregularities.

3.  Have the car inspected by your regular mechanic or diagnostic center. Never buy a car from a seller who won't allow an independent inspection.

4.  Discuss key points.

   • What is the price of the car? Are tax, dealer preparation, and transportation included?

   •  What are the terms of payment?

   • What are the financing charges for installment payments?

   • Will you receive a warranty? If so, for how long? Does the warranty cover parts and service? Who is giving the warranty, the manufacturer and/or the dealer?

   • Who pays for transporting the car back to the dealer if it breaks down?

5.  Put all promises about the condition of the car, service to be provided, and financial terms in writing. Oral promises are usually not accepted in the event of a lawsuit.

6.  Receive the certificate of title, copy of the bill of sale, and other appropriate documents.

7.  Keep records of mechanical problems that arise after purchase. These include:

   • your own notes

   • receipts from repair shops or the dealer's mechanic

   • records showing the date and mileage on the car in addition to the problem experienced

   • schedule of trips you made to the dealer's repair shop

   • copies of signed work orders, canceled checks, etc.

8.  Take immediate action to protect your rights. Contact the dealer if you are unsatisfied with your purchase. Follow up telephone calls with a letter to document your protest (see Figure 4. 1). If the dealer refuses to cooperate, you can institute suit in small claims court (see Chapter 7) or a higher court. You should also contact your state's department of consumer affairs, the consumer fraud division of your state attorney general's office, and/or the Better Business Bureau (see Figure 4.2).

The preceding strategies also apply to buying a car from a private individual. If you later pay for unexpected repairs, you may be able to recover the cost in small claims court (see Chapter 7). To do this, you will I have to prove that:

1.  The individual made inaccurate representations about the condition of the car. ("This car is in great shape; it was recently inspected and tuned up by a mechanic.")

2.  You bought the car on the basis of these representations.

3.  These representations were false, and the individual knew they were false at the time they were made.

4.  You were damaged as a result.

When buying a used car directly from a private owner, ask these questions:

• What is the mileage?

• How long have you owned the car? Are you the original owner?

• What do you like best about the car?

• What major repair work has been done on the car? Has it been involved in any accidents? What happened to the car?

• Did you buy the car new? From whom? Does that dealer have service facilities?

• Why are you selling the car?

• Who is your mechanic? Where has the car been regularly serviced? Are your complete service records available? May I inspect these records?

• Have you ever had any problems with rust? Has the car ever been painted? When?

• Are there any expenditures I must make to get the car in top condition? Can my mechanic inspect the car? (If the person says no, look elsewhere.)

The Consumer Federation of America (which is composed of 240 nonprofit consumer agencies) and the National Association of Consumer Agency Administrators (made up of 150 state and local government consumer protection agencies) report that car repair abuse is the largest source of consumer complaints, particularly now because people tend to keep their cars longer and older cars need more repairs.

Several states have accused a major company with franchise auto-repair shops throughout the United States of overcharging, recommending unneeded work, charging for work not done, and selling unneeded service using phony maintenance schedules. Other lawsuits have alleged improprieties as a result of charging fees to inspect a car just to find things to fix and allowing unqualified mechanics to diagnose problems, which causes more time (and expense) and the recommendation of more, unnecessary repairs.

One investigation conducted by California officials found the average repair resulted in an overcharge of $223. A New Jersey investigation accused 100 Percent (all stores) of a major car repair franchise of recommending unneeded work!

Before taking your car to a new dealer or repair shop:

1.  Talk to people who have patronized the firm and ask about the service they received. Call the BBB to discover if there are any complaints against the shop.

2.  Describe what is wrong with your car completely and exactly, but don’t tell the service manager or mechanic how to correct the problem. For example, if you brought your car in because the engine was running rough, don't announce that you need a tune-up. You may only need to have the timing adjusted, a much less expensive job.

3.  Give the service manager or mechanic a written list of your car's problems, and keep a copy for yourself.

4.  Do not automatically agree to everything the service manager or mechanic recommends. Ask for an explanation of any work recommended and why it is needed. Do not sign a blank work order form.

5.  Obtain a written estimate of all repairs and service. Get a second opinion before having expensive work done. Never authorize additional work over the telephone unless you trust the people you are dealing with.

6.  Shop around at specialty service shops before taking your car to a dealership. Firms that specialize in certain kinds of work (muffler repair or brake jobs) may do the job at a lower cost.

7.  Ask for the parts that are replaced. This can prove that work was actually done.

8.  Examine your receipt. Question anything you don't understand. Save a copy of the receipt in case problems develop.

9.  Try to patronize repair shops that employ mechanics certified by the National Institute for Automotive Service Excellence or are approved by the American Automobile Association. Look for shops that display an ASE sign and you'll improve the chances of using competent, experienced mechanics.

10.  Newer car models now contain computers that control major car functions. Most newer models do not need tune-ups but rather replacement of defective parts. Avoid asking for a tune-up, since this maybe unnecessary

11.  Inquire if the car's warranty will cover the problem so the problem can be corrected for free. Ask if the worker is paid a commission for all work performed; if so, get a second opinion.

12.  Consider negotiating a reasonable flat fee for the job rather than being billed by the hour. This way, you may avoid inflated charges for high hourly rates and false billings for time not expended.

13.  Be on the lookout for unnecessary maintenance and bait-and-switch ads. These get you to the shop for a low fee on advertised service, but once there, you are pressured into having other work done at great expense.

14.  Always comparison shop before committing to major repair work.

15.  Complain to the service manager or shop owner immediately if the work was not done properly. If you can't get satisfaction, send a letter by certified mail, return receipt requested, to document your claim, and consider filing a suit in small claims court.

Many states have enacted used-car lemon laws, and other states have expanded new-car lemon laws to cover used cars. For instance, the New York statute requires that a warranty be offered on used vehicles sold by dealers for over $1,500, with refund or replacement available if the car cannot be repaired within three attempts or 15 days. The required warranty must provide free repair of major parts of the automobile (listed in the statute) and must have a duration of 60 days or 3,000 miles, whichever comes first, for cars with mileage of less than 36,000 miles, and 30 days or 1,000 miles for vehicles with over 36,000 miles. Failure to provide such a warranty is itself a violation, which may subject the dealer to punitive damages and attorney fees and costs incurred by the aggrieved consumer.

Check the law in your state to determine your rights by contacting your nearest BBB or department of consumer affairs. Notify the dealer, manufacturer, or company where the used car was purchased and request that repairs be promptly made by the seller. If after several attempts the condition is not alleviated, you can resort to the arbitration program in your state (if one is available) or initiate a private action to obtain a refund of the purchase price or a suitable replacement car. Follow the steps below to enhance your claim.

1.  Write a letter to the manufacturer or dealer. State the model and vehicle identification number, the make of the car, and the date, purchase price, and place of purchase. Document the problem or defect. If possible, include a written statement from a mechanic or diagnostic center. In most states, you must notify the dealer and manufacturer of the defect within the warranty period, or one year of the date of delivery

2.  Schedule an appointment with the dealer to return the car. After the car is repaired, ask for a copy of the bill that shows what repairs were performed.

3.  Save all documents and records. Prepare a diary of the steps you took to maintain the car in proper working condition (it was inspected on a regular basis) to show that the defect in the car was not caused by your negligence or abuse.

4.  Take the car back to the dealer if the problem is not corrected. Speak to a lawyer or research the law in your state to determine the appropriate course of action to take if the defect persists.