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What You Should Know When You Buy A Used Car
by Fraser Wheelock
http://www.fwcar.com

In 1975, the federal government enacted the Magnuson-Moss
Warranty Act. Widely known as the 'Lemon Law', it provided
protections and assurances to consumers for purchases that
cost over $25, and came with express or implied warranties.
In the time since, every one of the fifty states has added
its own set of lemon laws to their state books. In many
cases, the sale of used cars is specifically regulated.

Until 1975, consumers had little recourse if they purchased
a 'lemon'. There were no laws governing what warranties and
disclosures a dealer had to make when selling a car. With
the passing of the Magnuson-Moss Warranty Act, consumers
gained a powerful tool to help them be certain that the car
they were buying would actually run once they drove it off
the lot.

Once Magnuson-Moss was on the books, many states followed
suit with so-called lemon laws of their own to make the
prospect of purchasing a used car safer for consumers. The
Lemon Laws lay out exactly what kind of information must
be made available to consumers considering any purchase,
including the warranties and guarantees that they will
receive. The specifics vary from state to state, so it is
in your best interest to look up the lemon laws in your
state before signing any agreement to purchase a used car.

To protect yourself, make a point of knowing the particular
laws that apply in your state. For instance, many states do
not allow 'as is' used car sales. In states that due, a
dealer may still be bound by an 'implied' warranty, though
the things covered under that warranty may vary from state
to state. In essence, the law assumes that a product, in
this case, a used car, will serve the purpose for which it
was bought.

Paying in Full
In this case, paying cash for your car includes the option
of taking out a personal or car loan with your own bank in
order to pay the dealer off for your car all at once. To
the dealer, it's the same as being paid in cash, and you
may be able to use it as leverage to get a better price on
the car of your choice.

Dealer Financing
Dealer financing takes a number of forms. Some dealers,
especially those who cater to lower income markets with
poor or little credit may actually provide their own
financing on the lot. The 'buy here pay here' dealers can
be a convenient option when your credit isn't good enough
to get a regular loan, but you need the car now. Be aware
that you're very likely to pay a far higher interest rate
than with a conventional loan. If you have no other options
though, it can put you behind the wheel when you need the
car.

- whether the car is being sold 'as is'
- if there is a warranty on the car
- what, if any, percentage of repair costs the dealer pays
- a reminder that spoken promises are not enforceable
- the major mechanical and electrical systems on the car
- problems that you should look out for
- a reminder to ask to have the car inspected by an
independent inspector

Know what you're buying.
Under the law, any car dealer who sells more than six cars
per year must place a Buyer's Guild in each vehicle for
sale. The Buyer's Guide will list the price of the car, the
warranties with which it is sold, any mechanical problems
that it has if it is sold 'as is', and information designed
to help the consumer avoid being cheated.

- whether the car is being sold 'as is'
- what parts of the car are under warranty
- what, if any, percentage of repair costs the dealer pays
- a reminder that spoken promises are not enforceable
- the major mechanical and electrical systems on the car
- problems that you should look out for
- a reminder to ask to have the car inspected by an
independent inspector

By knowing your rights and taking steps to protect them
when buying a used car, you can avoid buying 'someone
else's headache' and end up with a gem instead of a lemon.

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