
Hacking the Used Car Purchase - dw5ight
http://blog.carsabi.com/2012/01/31/hacking-the-used-car-purchase/
======
simonsarris
I'm surprised they didn't mention "Have friends", which can often save far
more money than any of the listed tips.

It's worth remembering that you are not the only person that you know that
buys cars. Often friends and relatives are considering buying a new car and
want to get rid of their old one in an easy way. Make sure you let them know
that if they are going to trade-in that you might be interested in their old
car.

My brother's first car was a Subaru with 250K miles that our friend's family
was replacing. Instead of trading it in my brother offered $50 for it. They
decided to give it to him instead.

My first car was a Corolla that my uncle was going to trade in. I offered him
the trade-in quoted price ($1500). Two years later I sold it for $3600 on
Craigslist. I would have gladly sold it to a friend for $1500 though.

There are plenty of people that like to buy cars from dealers and do not want
the hassle of craigslist and are willing to trade in. If you're in the market
for a car, make sure your friends and family know!

~~~
patrickod
I wholeheartedly agree with this. Having connections and keeping your eye out
for potential cars to buy can make a huge difference.

The first car I bought, a 97 Opel Corsa, was going to be scrapped by a friends
neighbor until I stepped in. It had been sitting without use for ~18 months.
The parts needed were minimal. It cost me €150 and 6 bottles of wine. It still
drives absolutely perfectly.

The second car I bought was again going to be traded in/scrapped. $20 later
and a can of 44K to clean out the engine it passed smog and has been running
since.

tl;dr it pays to keep an eye out for cars that people are looking to sell.
Offer to take them off their hands for a reasonable price and you'll find
they're very receptive.

~~~
vaksel
that's partly because in Europe your insurance is through the roof so people
throw away perfectly fine cars since they don't want to pay $6K/yr for a civic

~~~
Tobias42
Where do you pay that much? I have lived in Germany and Switzerland and had
various cars. Liability insurance never was more than 700 dollars per year.

~~~
DanBC
English car insurance, especially for young men, is expensive. A 22 year old
programmer driving a 1996 Honda Civic 15,000 miles a year for social and
commuting to work would be paying about £950 if they shopped around but could
be paying over £1,500 if they weren't careful. (That's fully comprehensive.
And it's for a small town population 100,000)

£950 = $1497 = €1146

------
bryanlarsen
1: Dealers cost ~$2800 more on average, but they may also provide $2800 of
value to some people. For instance, many dealers add a 6 month warranty, clean
up the car. More importantly, buying from an affiliated dealer can be seen as
safer because too many complaints can cause the dealer to lose their
affiliation.

2: I was the impression that the standard scam for trade-ins was to inflate
the trade-in value. It makes a customer feel better if they get $500 more for
their trade-in than if they get $500 off the price of the new car even though
it works out the same.

3: Buying luxury later does not necessarily save money. Some brands depreciate
more than others. Toyota & Honda depreciate the least, but BMW is pretty
close.

~~~
tptacek
You can't go to a car dealer and get an "inflated" price for your current car
without buying a new car from them; they're getting their $500 one way or the
other. It's a bad idea to sell cars to dealers. Their entire profession
revolves around capturing the spread between car buyers and sellers.

Also, a BMW 3-series depreciates ~$7,000 in the first 2 years; a Toyota Camry
depreciates ~$3,500. Those numbers aren't pretty close.

~~~
bryanlarsen
From what I understand, a car dealer makes the bulk of its profit from its
maintenance department. Most of the time they make very little profit from
your used car, it's usually just resold to a wholesaler. The dealer is usually
only interested in reselling relatively new cars of the same make. The biggest
reason they take trade-ins is because it makes it easier to make a sale and it
makes it easier to play with the numbers.

So yes, you shouldn't sell to a dealer, but if you don't know why you can be
conned when you're surprised by how much they actually offer for your trade-
in.

A BMW 3-series costs about twice as much new as a Camry, so that seems like
equivalent depreciation to me.

~~~
sixQuarks
Used cars are actually a huge profit center for dealers. They will wholesale
older cars that they can't sell on their lots, but for a good late-model used
car, they can easily make a few thousand dollars profit.

~~~
sliverstorm
I don't know if anything is a _huge_ profit center for dealers these days.

I mean, they will certainly have big _revenue_ centers, but their business
model is like a snake's eating habits- big meals occasionally.

------
paulgerhardt
I recently asked a seasoned friend about buying cars off Craigslist after
being frustrated with all the SEO spam I found on Google. This was his
response:

Well, all states are slightly different with how they deal with car
registration and ownership titles. The way it works in most places is that
every car has a piece of paper that goes with it called the title. The title
has all of the current owner's info on it, as well as the Vehicle
Identification Number (VIN), and when you're selling a car, there's an area on
the back you fill with the new owner's info, car mileage, and seller's
signature. This area on the back counts as a "bill of sale". It used to have
to be a separate document that was kinda written up in legalese; "I, ______,
sell this 1997 toyota corolla (VIN #SDFSLJDKLSJGD52345234) to ______ on this
day, may 18th, 2008 for 42 dollars. Signed, Seller: ______ buyer: ______" But
in Colorado they've integrated this into the bill of sale, so you don't need
to do this anymore here. The most basic way to determine if a car is stolen is
if the seller has the title that matches the VIN stamped onto the car. If you
have a signed title/BOS and the car it belongs to, its kinda like a endorsed
check, anyone who wants to own the car just now needs to write their info in
on the title and take it to the DMV. If they don't have a title, don't buy the
car. It might not necessarily be stolen, but it might be, and its a HUGE pain
in the ass to get a 'replacement' title made for a car, especially if you
don't own it. In California, titles may be called pink slips, which I'm sure
you've heard of if you've seen any of the 3 Fast 3 Theerious series. I believe
they function the same as CO titles, from what I'm reading. Here's a list of
everything you need to transfer the car to your name after you have the car
and title in hand: <http://dmv.ca.gov/vr/vr_info.htm#BM2522>

Sounds like you need the endorsed title, probably with your info on it, and a
smog certification (which you'll either get this from the seller (in CO the
seller is legally required to have the emissions tested before selling
vehicles, but this RARELY happens), or have to find an emissions testing place
and go there yourself with the car). With these, you can go to a DMV and get
the title put in your name, and they'll give you plates. View this video:
[http://apps.dmv.ca.gov/vr/vrvideos/title_transfer/title_tran...](http://apps.dmv.ca.gov/vr/vrvideos/title_transfer/title_transfer.htm)
\- Shows you where to sign and everything. This is very important; if the
seller fucks up his/her name on the title when signing it or something like
that, it MAY void the title, and you have to get all this other shit signed
and come back to the DMV and wait in line forever again and again. Bring a
checkbook to the DMV, sometimes they don't accept credit cards. I think that
about covers the legal parts of buying a car/registration.

As far as buying a car from CL in particular, you'll probably end up bringing
cash, but leave it in your locked car til you decide you want to purchase said
vehicle and see the title. Ask them if they have a smog certification or any
of the previous records, if it can't pass emissions, you can't get it
registered, which is coincidentally a great time for a car to be sold.
Granted, most cars ought to pass emissions fine until like 200Kk miles. If the
engine visibly smokes, you're probably fucked. Ideally, the car won't have
been run before you see it, so it'll have a cold engine, this is the best time
to see how the engine behaves; does it smoke? does it start up easily? Other
major things to consider are leaks of any kind - BRING A FLASHLIGHT. An engine
with no leaks is best, but a leaky engine isn't always bad; leaks coming from
the top of the engine/where the headers are are bad, might be a head gasket
blown. Leaks from around the oil pan area are common, and all that means is
that you'll have oil stains on your driveway and have to remember to top off
the oil every now and again. Check the oil level of the engine to make sure
the owner isn't a jackass. Transmission leaks are the same, not too dangerous
if you keep the oil level good, but generally, most people are too lazy to
keep up with this shit so it gets broken. Just buy a car with no leaks. Drive
the car, make sure it tracks straight down the road; if it doesn't, it might
mean that it was crashed and the frame is bent, or maybe the alignment is off
because they curbed one of the wheels bad. If you're feeling paranoid that its
been wrecked or something, you can call ahead to get the VIN # and get a
Carfax report on the car, which shows its whole history of _reported_
accidents. Anything large enough to warrant not buying the car will be on this
report, minor fender benders may not be. Make sure the transmission shifts
into ALL gears, I got screwed on this once, transmisson had 6 gears, but I
didn't take it to a highway or even try to put it in 6th while testing it out,
and low and behold, the 6th gear is out. Listen to the engine for any
abnormally loud "click" type noises - every engine's valves click a bit, but
they shouldn't be too distractingly loud. Make sure all the lights/signals
work. People who are too lazy to replace a blinker bulb might be too lazy to
change the oil on time... I can't think of much else, and I've been typing for
like 30 mins... The only piece of advice my dad gave me before buying my first
motorcycle was, "if it looks good, and sounds good, buy it." Basically, look
out for any red flags, but by and large, most people are legit, most cars
aren't lemons, and any serious issues with the car should be pretty obvious.

~~~
tptacek
You'd think there'd be a good opportunity here for an auto shop to set up a
Craigslist auto clearinghouse, where buyers and sellers can meet in a neutral
location, give the car a once-over, have someone with experience make sure the
paperwork is in order, and conduct the sale without (gak!) cash.

~~~
larrys
The idea is good with the exception of the auto shop doing the once-over. I
think they would be leery of providing a statement regarding the condition
unless they were sufficiently compensated. Or unless the idea was large enough
to involve a network that provided the guarantee.

What you are suggesting is in a sense what used car dealers do. Even if there
is no long term guarantee on the condition of the car (many times there are
though) there is an implicit guarantee that the car isn't going to die once
you drive it off the lot. The point is, they charge for that because they have
to cover that as a contingency if something hidden turns up.

~~~
tptacek
They'd just offer the same service mechanics already do for used cars, and
using the clearinghouse function as a lead generation mechanism for it.

------
Duff
I'm not sure that I agree with everything here.

Buy a used Benz - Luxury cars are great, until they aren't. Someone who
doesn't realize what luxury car parts often cost will cry when they get a bill
for a $750 spark plug wire kit.

Craiglist - Selling a car on Craiglist is great, except that people you'll
subsequently dealing with are folks who buy cars on Craiglist. Have fun with
that.

To truly "hack" the used car purchase, you need to buy the cars that nobody
wants. "Honda" and "Toyota" shouldn't be in your vocabulary. If you want a
Honda, get the certified used one with a better warranty than the brand new
one.

~~~
tptacek
I didn't get the idea from this post that the author was _recommending_ buying
a luxury car, only that you should look for steeper discounts on used luxury
cars.

You're right, though: Euro import cars in particular cost significantly more
to maintain; you can safely expect to spend 50% more per year on them (I say,
ruefully).

~~~
owenmarshall
If you're going to purchase an expensive import, be sure to look around for
good _independent_ mechanics.

I drive a Saab, and several months ago it experienced a fairly common failure
related to the cabin blower motors. The dealership wanted to replace with all
new dealer parts from Sweden, and provided a ~$1400 estimate.

My independent mechanic, who tells me he deals with this particular issue on a
near weekly basis, told me that the part I needed was identical to a part
found in earlier Cadillac Cateras. Just by using that part, he was able to fix
my car for $680 -- over 50% savings.

Maintenance by the dealer can often be significantly more expensive, and
there's almost always a competent independent shop nearby that specializes in
your car.

~~~
ssharp
I had this same issue last year. I bought a replacement fan for around
$200-250 online and just did the job myself. It was kind of an awkward repair
since you have to squeeze into the cabin and work on your back, but I did it
with a ratcheting driver, torx bit, and extension in about 2 hours.

Online Saab communities are awesome and common problems usually have step-by-
step instructions from others who have done the repairs, most even have
pictures.

I've had pretty good luck with my Saab. It's on '04 with 140k miles and that
blower fan has been my most expensive unexpected repair.

~~~
owenmarshall
:fistbump: what up fellow Saaber :)

I acquired a copy of Saab's WIS. You should as well, especially if you do your
own repairs & maintenance. It's insanely helpful. You can acquire it via the
typical channels.

My '03 NG 9-3 has been a joy so far. I just need the parts freeze to thaw out
a bit so I can get a replacement key made, because I've only got the one and
am _terrified_ of losing it.

------
ageyfman
why is everything that involves thinking is now called "hacking"? Buy from
Craigslist is really a hack? Seriously? Carfax report is a hack? That's pretty
lazy. Car arbitrage is a hack - checking a car's title is minimal effort.

~~~
Estragon
The real "hack" here is slyly congratulating readers on their cleverness so
they keep coming back for more.

------
cjzhang
But what about the time investment needed in finding an acceptable car on
Craigslist compared to finding one from a dealer?

If you're spending something like 100 bucks and 20 extra hours over three
weeks checking out N more cars that don't pan out because {the guy lied about
the condition of the car, the guy selling it is really sketchy, other random
reasons}, then is it still worth it to save an extra 1-2k?

What I'm trying to ask basically is "but what kind of opportunity costs are
involved in these hacks, and when does it stop being viable"?

~~~
raccoonone
Well, if you used our awesome car search engine (carsabi.com), you wouldn't be
spending 20hrs =P

In all seriousness though, if you spend 20hrs to save $2k, you're making
$100/hr, which is better than most programmers make, even.

~~~
solutionyogi
A great car search engine definitely helps but it's a very tiny part (may be
10%) of buying a used car (speaking as someone who bought a used car 8 months
back).

The most time consuming part of buying a used car is to check the car in
person (and it's difficult to schedule appointment with an individual person),
getting it inspected by a mechanic (If you don't get it inspected by your own
mechanic, you are an idiot. I know I was an idiot once.), negotiating the
price, paying the agreed price (it's a BIG pain if the car's loan hasn't been
paid off).

I recommend CarMax (<http://www.carmax.com>) (no affiliation what so ever) for
used cars because they actually take away all the pain points which I
described above.

[And if you are looking to buy a new car, I would definitely recommend
carwoo.com. I helped my friend buy a new Infiniti EX at an unbelievable
price.]

------
encoderer
Be a little careful with some of your analysis. For example, you mention a
Mercedes e320. There is no such thing anymore. So the last year or a previous
generation vehicle is certain to depreciate more steeply than the first year
of a new generation.

~~~
vaksel
E320 is just an E-Class

The 320 just designates engine size. i.e. 3.2L V6

The new 350s, are still the E class, just with a 3.5 V6

~~~
encoderer
I'm a Mercedes owner (CLS) and enthusiast. First, even if the distinction was
only the engine displacement, the bigger engine is certainly more attractive
to buyers.

But it's not. There was a redesign between those model years. Mercedes rarely
updates engines mid-cycle. In this case, it was a dramatic redesign, an
entirely new platform. The new E Class -- E350 or E550 -- is a very different
car than the E320.

~~~
vaksel
ah yes, didn't catch what you were saying in the original post...then yes, the
redesigns should be accounted...but since they are only looking at E320s, the
redesign hit should affect all years.

~~~
encoderer
But it LOOKS like the right-most (highest) data-point must be the new car
price? And it shows that steep drop off going to 2009.

And in the case of the E-Class, 2009 was the last year of the old generation
(W211 IIRC). So yes, if you graph E-Class prices right now, there will be a
huge drop there.

If the 2010 Data Point is something he's purporting to be a "2010 E320" then
it must not be a US model. In the US MY2010 began the W212 E-Class.

I applaud this guy for putting together so much data. I just wanted to raise
this question because the way the data is presented confuses me a bit.

------
LouToot
As someone who has been buying cars for himself for 20 years or so, and never
new, I would agree with the article in part, but with some important provisos:

1\. While Craigslist is a valuable resource, make sure you follow Hack #4 and
#5 - there are a lot of sleazy individuals who will pass salvage title or
otherwise garbage vehicles. I would add one other note to that recommendation
- search via the 'by owner' listings vs the 'by dealer' ones. That cuts down
some (but not all) of the buy here/pay here trash-lot stuff. Searching for
larger dealer vehicles can be done via something like autotempest (which also
conducts Craigslist searches too)

2\. While buying via Craigslist is generally easy and definitely recommended
in many situations, selling can sometimes be a complete PITA. Dumping the car
at CarMax can work as well in that case. You take a bit of a hit on the sale
price, but its generally less in my experience than trading it in.

3\. Sometimes there is a damn good reason why Luxury cars have taken an
appreciation hit. Make sure you factor in scheduled and unscheduled
maintenance with your purchase plans. Some luxury brands (Lexus, some
Infiniti, Acura) are easier to maintain than others, but they inconveniently
don't seem to depreciate quite as much. One thing I would add here too is - If
you don't care about your image too much, look into 'old people's' cars.
Things like the Cadillac DTS, Lincoln, Mercury Grand Marquis, etc... Because
they are so unfashionable, the depreciation hit on them is HUGE, and you can
really get decent, comfortable transportation for cheap. The gas mileage might
not be as good as a Toyota, but $5k in savings can buy a lot of gas...

4\. Carfax is important, but its not foolproof, and its no substitute for a
good mechanic's inspection. What I look for is a gap-free history with no
dramatic changes in mileage, and no record of fleet ownership. Why no fleet
ownership? Have you ever abused a rental car, or known somebody who has? I
would never buy an ex-rental, and would have a hard time looking at other ex-
fleet sale cars - the incentive for responsible ownership is very often not
there, even if scheduled maintenance _may_ have been more rigorously followed.

5\. In some cities there are 'Lemon Buster' services that can travel to the
dealer/owner and inspect the car on-site. YMMV of course, but I have found
them to be pretty useful and inexpensive. They also give you a nice inspection
report that can be used as negotiation leverage.

Additional points to make:

Financing - unless you are a very savvy negotiator, I would NOT recommend
dealer financing over bank/Credit Union financing (especially CU.)
Financing/Dealer Fees are a huge source of income for dealers, and they
typically have some real hard-asses stationed at the financing desk. Much
easier to just pay with cash from the CU or your pocket. Paying ahead, by
saving money for your next car instead of making payments for the current one
is a very savvy move if you can get away with it.

Used car prices are highly localized. Where I live (Austin TX,) I have found
that 2-5 yr old used cars are typically about $1k more expensive than cars in
larger Texas cities like Houston and Dallas. Make sure your internet searching
takes this sort of variance into account. If you save $1-2k on the price, a
$150 one-way plane ticket is pretty cheap. For those in the rust belt, I would
not even bother with buying used vehicles past a certain age locally - why
take the chance on hidden rust issues?

Rule of thumb for used car purchases - there are always more cars! Don't EVER
think that the car you are looking at is a special flower and that you will
never find one that's the same. ALWAYS reserve the option to walk away. I
personally walk-away from most cars I look at. Don't like the lot/seller? Walk
away. Not getting a good feeling from the car? Walk away. There are always
other options.

Finally, I recommend the book 'Don't Get Taken Every Time' by Remar Sutton.
Tons of good info on how to avoid some obvious pitfalls for both used and new
car purchasing.

~~~
defen
Sounds like good advice, but I'm really curious about your use of the term
"rust belt". It refers to a geographic region that once had strong industrial
output, but has suffered economic decline as those industries have become less
important/relocated off-shore. It doesn't have anything to do with the
propensity for metal to rust in those areas. Unless there's some other usage
that I've never heard before.

~~~
falcolas
I would think GP refers to any city in the north of the US, where we get
enough snow to justify salting the roads. That road salt takes a very harsh
toll on vehicles, causing an enormous amount of rust on the undercarriage.

------
rickdale
I purchased a used car last year. I would have to say part of buying a car is
also the financing. If you can manage to get a good rate and put some cash
down, thats a hack in and of itself.

As for not trading your car in... I understand you might get more $ selling it
on cars.com or craigslist, but the truth of the matter is you can be stuck
with your old car forever and all you wanted to do is get rid of it and on
with the old one. For some people thats worth the moneyit will cost them by
trading it in.

I had an experience with a honda civic. Lady said she loved the car. I was
asking the lowest bluebook minus 500. It was in better condition than that,
but we both found it fair. When she came to pick the car up, she saw I had
dogs and panicked about her allergies and this and that. I reassured her I had
the car detailed and the dog hadn't been near the car since. No deal. I was
fed up and traded it in. Lost 1500, but I would have happily paid that to not
deal with the lady.

~~~
graywh
Bigger hack: pay cash.

~~~
larrys
Not true. Dealer makes money on the financing. If they are making money on
that they can afford to sell you the car for less. Usually a good idea to walk
into the dealership and let them believe you are going to finance the car and
at the last minute change your mind.

~~~
graywh
I wasn't inferring that you could get a better price from a dealer by paying
cash. I was referring to not financing the purchase of something that will
depreciate.

~~~
ghaff
Even if it's cash you have sitting in your checking account, there's an
opportunity cost associated with using it. Lots of people have no choice but
to use financing in any case. And, if there's some special 0 percent financing
or whatever deal, it may make sense to use dealer financing rather than pay
cash even if you have it available. You just have to look at the numbers for
the specific transaction.

------
tmh88j
As a gearhead, nearly everything on that list is ingrained in my DNA, EXCEPT
buy luxury(and performance) later. My reasoning is that technology is
improving so rapidly that every new model of most cars have made gains that
are ridiculously high compared to the previous generation. Cars are my passion
and the one thing that gives me joy no matter what mood I'm in, so I'm willing
to fork out the extra money for the newer, better performing models.

I found both of my cars on craigslist and one of them was a steal. It was
listed for about $5k less than the market with some incredible upgrades AND it
was through a dealership, so I just figured they were clueless. I went and
checked it out, brought it to an Audi dealer for a PPI and everything checked
out. I also added on a 3 year drivetrain warranty and I still ended up saving
around $3.5k compared to what similar cars were going for.

~~~
vaksel
it actually makes sense...take Audi for example.

You'll pay $40K for an A4 2.0T Quattro(once you get a few basic options)

Or you can go used, and buy a 2009 with 36K miles for $25K...a car that looks
identical to the 2012 model. Pretty much identical car for $15K less.

Or you can buy one generation older(2005-2008) with 60K miles for $15K...a car
that's still modern, and has pretty much identical features.

Both of these options will still be pretty much brand new, and you'll get to
save a ton of money. i.e. for the cost of an entry level Civic, you get a $40K
car.

~~~
nsxwolf
I would love to do exactly this, because I love the A4. But the maintenance
cost fears stop me. I was really hoping it was one of those "Macs cost more"
type myths, but the more I read the more it appears to be true.

~~~
vaksel
to be honest, I was in your boat. I always bought Hondas/Acuras since I was
afraid of maintenance issues. So for the last car I decided to take a gamble
and buy an Audi. An A4 quattro for winter driving. Figure, worst case
scenario, I'll just drive the other car.

Maintenance isn't too bad, I mean yes, a lot of things need a few extra steps
compared to other cars...but there are plenty of forums with step by step DIY
instructions on how to do everything.

Basically a good rule of thumb is that a Toyota/Honda will cost you $500/yr to
keep running. And an Audi will cost you $1,000/yr.

Reliability wise, the mechanical bits are pretty reliable. They had a major
issue with the coilpacks, but they did a recall on those, and the new ones are
supposed to be bulletproof. The electrical bits on the other hand have their
fair share of gremlins...but those are an annoyance, not anything serious +
Audi has an onboard computer that catches these things...so you'll know when
your turn signal burns out.

~~~
nsxwolf
It's tempting. Though "coil packs" sends a shiver down my spine. My 2000 Miata
blew its coil packs at 50,000 miles and after that, every 2 years, right
before emissions testing time, the check engine light comes on and I spend a
lot of money on emissions repairs...

~~~
vaksel
changing coilpacks isn't that hard...here is a DIY for the A4:

[http://www.audizine.com/forum/showthread.php/364601-DIY-1-8T...](http://www.audizine.com/forum/showthread.php/364601-DIY-1-8T-Coilpack-
Replacement)

~~~
nsxwolf
There was something quite excitingly _German Engineering_ about those
photographs.

My wife says if I ever have a successful web or iOS app, I can have my Porsche
911. Until then, perhaps a used A4 to tide me over...

------
HaloZero
Were the datapoints all from one market (SF Bay Area)? Or across multiple
regions in the US?

~~~
dw5ight
Data was across the US. I tried looking for regional trends (price variation,
etc), but at least at the state/major metropolitan area level price and
availability distributions were surprisingly homogeneous. I'm hoping to deep
dive later in more detail, but for saving money there didn't seem to be much
on the regional front worth reporting. Thanks for reading!

------
vishaldpatel
TL;DR version: Buy and sell used cars on craigslist instead of dealers cuz
you'll get a better deal. Don't forget to carfax it and take it to a mechanic
for inspection.

------
ssharp
You are using the sticker price for the basis of comparison, which is
unrealistic. The appropriate comparison is final sale price.

Regarding trading in a car, I'm not sure if most people in the HN audience
really think that they are getting a good deal on trade-ins. Also, trade-ins
can be negotiated. You aren't going to get the market price, but you give up
some money for the easy liquidity. It's going to take some extra work for you
to get the market price.

Also, when you buy a used car from a dealer, you should look up the "Black
Book" price, which is generally the price the car would go for at auction.
This gives you information on the dealer's bottom line. The Black Book price
is going to be a lot lower than Blue Book, meaning that it's well under the
market price, and really well under the dealer's sticker price. But using this
number, you know the dealer's position, and can adjust yours to drive value
for both parties. I don't think it's totally inconceivable to get a used car
from the dealer for close to what you'd get it from a private party, as long
as you're willing to negotiate and the dealer is willing to negotiate.

------
dadro
Overall this is a helpful list. One of the biggest challenges with used cars
is they are impossible to treat as a commodity. I spent several years working
for a company that financed high-end classic and exotic autos. I learned a
ton. One of the biggest tips is you really need to profile the owner if you
want to get car that was well maintained.

I like luxury cars (BMW's, Lexus, etc) and over time came up with a system for
purchasing used ones. Search CL and local want-ads in affluent suburbs.
Eventually you will find 1 owner cars with low miles owned by people with the
means to take proper care of them. Ask for the maintenance records, look at
the condition of the interior and also look for clues on how the person takes
care of other things like their personal appearance AND their home. It will
tell you everything. I've gotten some killer deals on pristine cars following
this method. Currently on the hunt for a late 70's air cooled 911 :)

------
wanderr
Here's my hack, that may not be acceptable to everyone: pay cash for your car,
settle for whatever you can afford, pay yourself car payments. Buy something
ugly. I stared with an $800 POS and made it last for 3 years...I paid myself a
modest $250/month "car payment" during that time, so I ended up with $9k in
cash. Finally got tired of driving that thing and it just wouldn't die, so I
kept an eye out for used cars in my new price range. It took a while because I
was just searching off and on, but eventually I found an especially ugly Scion
xB (bright yellow edition) that had been on the market for a few months with
no interest, so they were already asking significantly less than KBB value,
since I was paying cash I got them to take even less for it (after having my
mechanic look at it of course). Of course if you mind having a goofy looking
car, this strategy might not save quite as much money.

------
mountaineer
More like common sense car buying, not really "hacking". As others have
mentioned, don't rely on Carfax. I sold a car that had to be almost a quarter
re-built (and disclosed this to the buyer), and this was not on the Carfax
report. But, it's still worth doing.

------
cottonseed
I take Hack #1 with a grain of salt. The more important thing is to know what
the car is worth and what you're willing to pay. You might be able to find a
deal on craigslist, but you can also negotiate with dealers, and they often
inflate the sticker price. I bought a used car recently. One dealer was
overcharging and rejected my offer so I walked. I ended up negotiating hard
and got a better deal elsewhere. Also, do your homework. From the timestamp on
the google cache of an online isting, I knew how long the car had been on the
lot. This turned out to be a useful bit information during the negotiation.

------
guynamedloren
_Better_ Hack #5: Be your own mechanic. Cars really aren't that complicated -
especially for smart hacker folk like us. I did maintenance on my parents
vehicles when I was 12 years old (brakes + oil changes) and have been working
on my own vehicles since I could drive. In the past 7 years, I have only spent
money on alignments and tire mounting/balancing, to the tune of $300 probably.
The kicker is that I'm no more mechanically inclined than anybody else. I
learn every time I pick up a wrench, with a bit of help from the good ol'
internet. The experience is unbelievably fun and rewarding :)

~~~
c_moscardi
This is so true. I was really surprised not to find more posts like these,
because working on your own car is very fun, gets you away from the computer
for a bit, and definitely embodies the DIY mentality most of us on this site
have.

That said, if you're in the market and inexperienced [or maybe even
experienced], take a prospective car to a professional mechanic. Don't buy a
junk car and expect to be able to fix everything yourself, unless you want a
fun side project which will require a ton of man-hours [and more money than
you'd expect] to complete. But on the overall, doing your own maintenance and
fixing smaller problems you encounter [timing belt issues? no biggie!] is very
very enjoyable.

------
killion
It's interesting to see how close the KBB value mirrors the Craigslist price.
I'm guessing the only negotiation points are the condition of the car.

Thanks for the helpful post, I'm about to sell my car.

~~~
Dnguyen
Maybe it follows closely because people check their values on KBB and use KBB
values to list?

------
xxpor
There's an old adage in the car world: there's no such thing as a cheap luxury
car.

You might save on the initial purchase, but there's a lot more stuff to break,
and when it does it's really expensive.

~~~
camiller
Just to amplify this, common parts across several models and somehow be more
expensive for the "luxury" version. Rear hatch gasket for an '96 Oldsmobile
Silhouette mini-van was twice what the exact same part for the Chevy Lumina.
Only difference in the two vans is a few more gadgets and more acoustic
insulation in the Oldsmobile.

------
amalag
No mention of auctions. Among my friends it is common to buy at an auction.
Only registered car dealers are allowed. I guess I am lucky to be able to go
through some. They ask a flat fee of $500 and they will buy the car you want
at the auction. I am not an expert at it, so I was wary and I actually bought
a new car at what I thought was a good price. Next time I will have to go for
the auction, especially since the 'hackers' here don't even mention it.

------
md1515
I said this the first time this site was posted. It is brilliant and helpful.
It is actually the first helpful site I have found here on HN for my personal
life.

------
phamilton
I wrote a cool script to pull a lot of data down off of KBB. I've got a post
on my blog about it:

[http://www.undiscoveredfeatures.com/2011/09/kelly-blue-
book....](http://www.undiscoveredfeatures.com/2011/09/kelly-blue-book.html)

What I found interesting was comparing the rate of depreciation per mile vs
time.

~~~
phil
Looks like you've discovered that KBB applies a linear mileage cost. Does that
reflect reality? I doubt it -- at least, not after you reach a certain
mileage.

I'm curious if you grabbed data to extend that chart out to, let's say, 200k
miles. There should be a sigmoid somewhere out there.

------
tedchs
I just learned about AutoGlance, which is a "Hipmunk for car buying": for
example, <http://autoglance.com/search/#Mercedes-Benz,eclass,50,29492>

------
RobertKohr
Excellent post. I think the most enlightening item was "Buy Luxury Later." I
tested out the searches for cars that were suggested, and wow, there are some
great deals on CL.

------
larrydag
I'm curious how you approach #5 Find an OCD Mechanic to a Craigslist seller.
How do you ask? Is it considered common courtesy to say "Hey, lets drive it to
my mechanic?"

~~~
mcknz
If I really want to sell my car, and I know it's in good shape, I would be
more than happy to arrange an inspection. If the seller wants to avoid an
inspection, it's probably because 1) the vehicle is in enough demand (or cheap
enough) that it's not worth the hassle, or 2) something's wrong with the
vehicle.

------
ssharp
I wonder what effect the "cash for clunkers" program had on cars below the
rebate incentive for that. It had to have a substantial effect on market for
older cars.

~~~
maxerickson
The effect was probably moderated by the 18 mpg cutoff for fuel efficiency. My
midsize 1997 sedan does about 24 mpg, so it wasn't eligible, and at this point
it is way down at the bottom of the used car market, not something that most
buyers would spend much time looking at.

------
hndl
I bought a 2007 Honda Civic that had done 24K miles when I bought it (2009). I
put down ~$10K for it. I did almost everything they mention here.

------
donky_cong
Thats not really hacks, thats common sense.

Want a hack ?

"Wash your car before you try to sell it"

------
yason
Ah, car purchases: the land of endless advice. So let me share my method,
requested by nobody:

1) I limit my purchases roughly around to one month's net salary. This keeps
me aligned with the idea that I invest in the kind of transportation I enjoy
rather than something that's newer and shinier than my neighbours'. My cars
are never just boring transportation vehicles: the style and feel of the car
is of most importance. However, I'm perfectly happy to drive cars that is ten
years old.

2) I intend to keep a car for 5-7 years. I get to pay for routine maintenance
and any worn parts for so many times for the $10,000-$20,000 that I could've
put into a newer car (and still pay for maintenance and replace parts, just
little less of it). I'm not afraid of big rehauls if the car is otherwise
sound. There's one exception to the longevity rule two years ago: I changed
makes.

3) When I'm changing, I don't particularly shop for cars. I'm rather in the
constant "nah, I don't need a new car right now" mode and gradually spend some
time browsing used car sites on the internet. When I get interested in one I
get this feeling inside. I check a few facts, go check it out, and most of the
time just buy it if my hunch keeps going. I think I've never test-driven more
than one car, the one I bought. Some I've discarded without a test drive.
Contrary to what you might think, I've always had good, reliable cars. And I
certainly don't drive the boring Toyota/Honda kind.

4) Facts include such as the ownership records and tax/MOT records, and
average mileage. For example, the previous owner of my current car kept it for
a steady seven years with full maintenance == good. He kept it as an
investment to his transportation needs instead of a cost sink that only gets
half the minimum maintenance. Also, if there are several cars of that model
that have clocked hundreds of thousands kilometres, I know the engine is
capable of doing it without problems.

5) I buy my cars around at 200,000km. If the car is in proper order at that
point I know it's not a lemon and has been maintained. Most regularly worn
parts have been changed once, maybe twice by the time. The worst cars are
those that are being sold around 100,000km or slightly below: you can probably
make 100,000km without ever changing oils, not to mention anything else. If
so, the car is bust and it won't make it to +200tkm. Anyone who spends the
effort to make the car into those figures has had it for some useful purpose.

6) I'm fully aware that I might bump into a bad car eventually. This is where
1) comes into play. The amount of money I spend is over the lifetime of the
vehicle instead of up front, so that I can afford to hit an occasional bad
one. None encountered so far.

I still haven't spent as much in cars in total and in my whole lifetime than
my dad just spent on his latest new car. I've been driving and owning for
about 15 years now.

~~~
GFischer
"I limit my purchases roughly around to one month's net salary"

Wow. Talk about differences. A car here in Uruguay is a YEAR's net salary (the
difference is mostly that they're taxed to hell here and there's a ban on used
car imports, so used cars don't depreciate).

------
georgieporgie
Selling a vehicle on Craigslist has been among the greatest annoyances in my
life. I will never make that mistake again. Instead, I sell vehicles on eBay.
The eBay method has a few hassles (answering questions, coordinating pickup,
eBay percentage), but it is still _sooo_ much better than dealing with CL
flakes.

That said, I _buy_ all of my vehicles on Craigslist. I wait for the exact
vehicle I want, show up with a cashier's check for the asking price minus
~25%, and bring the rest in cash for negotiation. Sellers are always relieved
when they find out I came prepared, and they're happy to negotiate on price to
be done with the process.

------
gcb
pretty obvious advices. really. but good to see the data points.

...now make a post on how to find a decent mechanic, and then i will droll
over

