Pre Purchase Auto Inspections..be careful who you use.
Being a small auto broker / dealer for over 15 years I have seen dozens if not hundreds of inspections on cars. Our policy is, we embrace them…when a potential buyer has a car inspected by a outside source we feel it distances us from any liability for the normal used car “Oops” that just happen on used cars. While we do our best to make sure all our vehicles are nice, clean and ready for action…they are still used cars, and things can happen. So who do I think does the best job…
Who does the best Vehicle Inspections.
I personally think the best inspections are done by the folks that ONLY do inspections, and I like the ones that come to the car….. They have no hidden agenda, no additional income from follow up work. Rather it be real or the newest program many shops are using….Recommendations” for upping their income.
One thing you always want to do…on any car over 100K miles.
Cold start…do you realize that can not be done after we drive the car to the mechanic shop. This inspection should in my opinion be done on any car over 100K miles…what does it show you…if the rings, pistons and upper components are sound. I had a car within the first few years we were in business, drove it to the lady’s mechanic, it passed with flying colors. A few months later, I got a call from her and it was running through oil…a quart a week…when the car was warm, you saw nothing, but when you performed a “Cold Start” it blew blue smoke… Had she hired one of the come to the car inspectors…I am confident that car would not have passed the inspection…The inspectors that come to you…ALL ask that you do not start the car…they want it cold when they show up.
Recommendations VS Manufacture requirements..can cost you big $$$$$
I think these have to be the biggest waste of consumer money…here is an example. I took a used car to a dealer for a minor issue. they didn’t know I was dealer. When finished they gave me a list of over $1,200 of recommended work… Not required by the manufacture…but suggested / recommended by the shop..When I confronted them, with why do you want to do all this extra stuff, when the factory requires things only done at 60K miles to keep it under warranty…Hmmmm Well…we think it is a good idea….and we recommend you should do these things. yes it is a good idea and a way of them making about $1,170 more then really needed…which was an oil change. I have seen these recommendations kill sales. The buyer sees those numbers and thinks the car is in horrible shape…and you know they are never going to believe me…so I just let them go and smile.
Seepage VS Leakage… can cost you thousands of dollars BE CAREFUL.
Many of the cars I sell have 100K or more miles. Just so you know… almost every car with that kind of miles has some sort of oil seepage. Engines get hot, gaskets and seals get hot, then cold, then hot…and over the course of time oil will seep past almost any gasket or seal. Now to be fair…if you wanted to make a car perfect…yes the best thing to do would be to fix them….but realistically…..in most cases not worth doing. Here is a recent example. I had an approximate 10 year old Toyota Camry with 102K miles. I had some buyers that liked the car and wanted it inspected… I of course said YES… here is the outcome. The shop (which does additional work) told the buyer it had a leaking rear main seal, and to fix it, would be $1,500. (probably an accurate cost) Plus a leaking strut for $1,100..(?) .so of course the sale fell though. I took the car to a 30 plus year “common sense” mechanic and ask him to put on his rack and see if he spotted anything. We both saw a slight oily area around where the transmission meets the engine…his comment was, I can clean that with brake cleaner and it will probably leak another drop or two over the next 6 months..”I wouldn’t worry about it”, was his final comment. Now this was a one owner absolutely crystal clean car that was serviced at a Toyota dealer its whole life…and its selling price was only around $6,000… The second mechanic in my opinion, is far more “Real World” realistic…yes you can fix that seal, yes you can spend thousands on a 6,000 car…but is it really necessary….many shops will not give you a common sense answer..(because additional work makes them additional $$$) .so you need to be careful….when you are getting a pre-purchase inspection…use someone that does not do mechanic work….And while the second mechanic (my opinion) gave the correct response, yes it is “Seeping a little” but its not a problem. Mechanics like him seemed to be rare…. And where will you find a 100K car with no oil residue anywhere on the engine or transmission…. In a MUSEUM …
Used car market, Whatzzz Zup…. if you have not been out looking for a used car in the last 18 to 24 months…you might get surprise. Our small business used to have a lot of $3,000 to $6,000 cars and occasional could find a nice $1,500 to $2,000 car. Those cars are really hard to find. It seems like everything we have been buying with few exceptions have been pressing on the $10,000 market. I actually get excited when I think I can buy a car, and end up putting back up for sale for under 10,000.
The hard part for us is buying and selling on a shoe string profit margin…the biggest qualifier is condition, condition, condition.
For example, if I purchase a 6,000 car, first thing I do is have a mechanic look it over for any and all safety issues….including oil, air and water. Believe it or not, that is hard to do for under a few hundred dollars…normally something will need updated, replaced or serviced….and they need to be done. That could be tires, air filter, brake rotors, brake pads. If there is body damage, and modest, I will leave alone, but if it looks cosmetically ugly, I will fix. Nothing pertaining to body work can be done for less then 2 to 300 dollars….and that is an excellent discounted price my body man give me.. The goal is to have a nice safe, clean vehicle to sell to you at the lowest possible price..
I can not sell the car to you, knowing there could be an issue. After we finish we have almost every vehicle detailed…. Depending that will be another $125 to 150.. So you can see, even a modest amount of rehab can turn into hundreds of dollars.
Now the big dealers are not cheapskates such as I, every car they have coming into their shops ends up adding at least $1,500 to the base cost….which is why when I try to buy a car for you from the big dealers, rarely is the price as cheap as we could have gotten it direct from the wholesaler.
One final thought I have noticed prices lately starting to drop just a tad, and selling times seem to be taking longer….not sure if the two of those together are good or bad….buying the car cheaper is always good, but if I am not buying it for you, then I am exposing the car to the open market…and might just have to wait 4 to 6 weeks to get my money back…. I guess that is just the way it goes….
I have been in this business now for almost 12 years and been through the last $4.50 a gallon gas episode. Last time, folks who owned big SUV’s were dumping them for 8 and 10,000 below the value they were months before. Hybrids that were selling at invoice 2 months earlier were selling for $1.000 over MSRP….so what do you think.
Hybrids are a different kind of vehicle
….and many folks simply do not like the ride or the way they handle….but bring on 4 to 5 dollar a gallon gas and all of a sudden, they can put up with the little idiosyncrasies….and here we go again.
Now the prices have not gone crazy yet, but I have already heard from the new car dealers, that internet Prius’ are moving quickly toward MSRP..two days ago I was able to still buy them at invoice….and the used Prius’ have jumped about 6 to 700 dollars in the last 3 weeks.
Gas prices going crazy…will your hybrid help
My experiences with these cars…(Toyota Prius, my favorite) has been great for used. I am currently driving one with 132,000 miles, and getting 43 to 47 MPG…and love it…and for me the hybrid will help…but I put 25K a year on…my old car got 26 MPG which at $4.50 a gallon = $4,326 per year for fuel. My Prius is getting 43 to 46 so lets say 44 for the same 25K miles will only use at $4.50 a gallon $2,556 saving me $1,769 for the year.
The 2004 and newer vehicles have great overall reliability and great battery expectations. A NY taxi test ran them upwards of 300,000 miles with no battery problems….unfortunately if your going to buy a used one, you need to get off your butt and buy…every day the price of gas is going up…every day the cost of the Hybrid is going up.
So what do I think… I think if gas goes to 4.50 or 5.00 per gallon these Hybrids and going to be silly expensive again..
If you don’t buy soon, you might as well just wait for the cycle…to come around again.
You hear the term, wholesale, retail, tradein….ever wonder what they really mean and how they relate to your car buying or selling experience.
You can go online and get Kelley Blue Book values for private party, retail and tradein…. As a dealer the wholesale value is a number we can buy the car at, clean it up, make sure it is safe, resell it and make a few bucks.. very simple but how do we determine what that number is. Personal experience is best…but often times, a car will come along I have not purchased before. We “BOOK” them out. Below you will see a copy of a dealers booksheet (what we call them) giving wholesale a retail….now the problem is…as a dealer you still have to add in personal judgement. Notice this car has a wholesale value of $13,554…does that mean that is what I should sell it for….
Sometimes…yes sometimes no…
I know that sounds crazy but our business is not a pure science…this car for example, because the miles were high for the year, I actually purchased for $11,300…and that was the real wholesale… Now I could take a Honda Accord with wholesale values of the same $13,554 and find it might sell for the full wholesale amount… It all comes down to miles, condition, number of owners, accidents and current market desirability.
Take the Toyota Prius
When gas was around high 2′s no one really wanted them and the value was about $1000 lower than they are right now….and if gas goes back into the mid 4′s and people react like they did last time, you can add another $1,000 at least to that… The equation for the Prius right now is fuel economy makes them a market desirable commodity.
Bottom line…run the online book value, use Private Party good to excellent and in most cases you will be close to what a fair market value would be. Use the tradein value to the low end PP value and that should give you a feel for wholesale.
Did you know…that when your a member of a credit union, you actually are a part owner, you have shares of stock so to speak.
Did you know…credit unions can deal with most of the financial issues and needs of your life
Did you know…you can always approach the CEO or board of almost any credit union if you have a problem or special need
Did you know…credit unions will many times loan you money that no one else will loan. A non-conforming type loan.
Did you know… that once you start dealing with a credit union, you will probably never need to go back to the unfriendly banks.
Did you know…you can run for board positions on almost any credit union, and get actively involved in how yours runs.
You should know…that a credit union is the only place you should be banking.