Buying a Used Car: How to Save Money and Avoid a Lemon

VIDEO: As American families watch their pennies, the used car market sees boost.
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With parents sending their kids off to college, some of them might be in the market for a reliable used car so that their offspring can fly (or drive) back to the nest for holidays and so on.

The first step is to make sure the model you choose was well engineered. After that, you must scrutinize the individual cars you are considering to make sure they have never been in a crash and have always been well-maintained

Choosing a Good Model

You can start your used car search in your slippers, by consulting the car resources available right on the Internet. If anything, there are too many choices: umpteen gazillion sources of information about used cars. Because I'm into saving time as well as money, I will tell you that you can learn all you need to know by cross-referencing just two resources.

The Consumer Reports Used Car Buying Guide has been an essential resource for decades. You can get it instantly online at www.ConsumerReports.org.

Advice from Consumer Reports stands out because the publication doesn't accept any advertising dollars from car companies or anybody else. You also get the benefit of Consumer Reports' own anonymous testing of vehicles. If you want a shortcut, Consumer Reports puts out a list of Used Car Best Bets and a list of Used Car Bad Bets. Steer clear of the bad, go for the best. It's that simple.

Auto website Edmunds.com also puts out an annual Best Bets list. It weighs reliability and safety, but also availability. That can be key, because if a vehicle is more widely available, by the law of supply and demand it will be cheaper.

Edmunds is best known for its vehicle pricing tools. The website offers what it calls the True Market Value price or "TMV." Edmunds gathers sales data from dealerships across the country to see what cars are selling for in the real world.

Checking Out the Car

Once you've settled on a model, you have to settle on an individual car. As a consumer reporter, I can't tell you how many people have called me over the years complaining that they bought bad used cars. A good vehicle check will prevent this and is a two-step process. Read on.

Years ago, when I was doing a television story about how to buy a used car, I heard about this obscure startup company that would fax you a vehicle history report. Doesn't that sound quaint? Although times have changed, Carfax reports remain a godsend to used car buyers. Don't buy a car without one.

There are other vehicle history websites out there now, including some affiliated with the government. But Carfax is still way ahead of the pack. Carfax charges $30 for a single report or up to $50 for unlimited reports. You can get a Carfax vehicle history report at Carfax.com.

Just be aware that vehicle-history reports do not always catch traffic accidents. If the car you're considering was in an accident that was not large enough to generate a police report, it might not show up on the vehicle history report. Carfax now has agreements with some collision repair facilities and insurance companies to try to fill this information gap. And the U.S. Department of Justice recently got involved and is trying to compel insurance companies and salvage shops to report accident data to a central authority.

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