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  1. #1
    We have met the enemy...
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    'The Market for Lemons', or looking for a decent used car...

    Well the time has come--after four plus years of living in the 'burbs with only one vehicle and weathering the great recession, we have started talking seriously about buying a used car to have a second vehicle--preferably something decent enough that we could take it on short road trips without worrying...

    What is out there is quite depressing--a lot of cars with high mileage and known problems with the usual disclaimer 'it's and easy fix'!!

    Well if it's easy--just do it--then I might consider buying your car, 'cause if you're too lazy to fix the obvious, what about all the "deferred maintenance" that I know I will find?

    Lots of cars that I would not take if you gave them to me. Etc.

    The local Craigslist under the category of "Owner'--which in theory excludes dealers, right?--is probably 70% curbstoners--in part because NY has some pretty strict regulation on used car sales. Well guess what--if you are lying about being a dealer, I'm assuming that you are lying about the car too...

    And being budget-constrained and having well-formed prejudices about car brands is not helping...

    Anyways, the title comes from my favorite economics article ever--George Akerloff's 'Market for Lemons'--in which he argued that because of information asymmetries, if your used car is average to better quality, you will try to sell it privately, where your personal certification will overcome the difficulty of the potential purchaser to determine the quality of the vehicle. Conversely, if your vehicle is average to worse, then you will put it on the open market, hoping to get average to better price. Ergo, publicly traded cars tend to be lemons; the ones you find advertised on your local CL or carlot are likely to be "lemons".
    "When the spirits are low, when the day appears dark, when work becomes monotonous, when hope hardly seems worth having, just mount a bicycle and go out for a spin down the road, without thought on anything but the ride you are taking."

    (Sir) Arthur Conan Doyle. Scientific American, January 18, 1896

  2. #2
    Cranky Old Bastard
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    You know that it's just a big crapshoot. You can pay more at a dealer and get some kind of warranty or pay a mechanic to check the car for you to see what it needs.
    I believe that many people don't get rid of a car unless it needs work they don't want to pay for. Might be tires or struts or something simple but you have to weed out the bad engines and transmissions. I always keep a little money available and expect to have to fix things right away.

    I'm writing because I learned something new when I bought a used car last year. Instead of looking at 5-year-old domestic cars, I focused on older luxury brands. There were lots of Mercedes, Lexus, Acuras, etc. available for decent prices.
    The advantage is that many of those cars have been garaged and well taken care of. Many looked brand new even though they were 10+ years old. The people that owned them often had all the service done at the dealer on a regular schedule with the records to prove it.
    You can expect to get 250K miles from a reliable car that's had good maintenance; just google it and look for known problems.

    I bought a 14-year-old Acura with 125K miles on it for much less than book, partly because it has a 5-speed that most people don't want. Most people think it is a new car, it looks that good, but when you get close you can see door dings and scratches.
    The leather interior is slightly worn but a new steering wheel cover and dying the seats will fix that. Everything works, all the power options.
    There is not one squeak or rattle. The steering and suspension are as tight as a new car.
    I'm able to do most needed work myself and that is an obvious plus. Parts for a Merc or Lexus are likely higher than other brands but that is another reason I bought an Acura; mine is a Honda Accord underneath and parts are cheap.

    Just my two cents.
    "When you know absolutely nothing, anyone who knows 1% more than nothing sounds like an expert."

  3. #3
    Dr. Buzz Killington
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    If reliability and maintenance history are your biggest concerns, spend the money on a CPO. CPOs have to meet strict critieria that basically put them in a new car category but with some miles on them.

  4. #4
    RoadBikeReview Member
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    Just remember when buying a "certified pre-owned" vehicle to ask who is certifying it. If its just the dealer you're probably screwed, if they are a new car dealer than most likely they participate or have to "certify" the used vehicle to the manufacturers standards. Ask to see the certification check list before you get to far along in negotiations.

  5. #5
    hfc
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    What kind of budget are you looking at?

    General rule of thumb IMO is go with a model that has a history of reliability, get it inspected by a trusted mechanic. The cars I drove the longest with zero problems were a Subaru Outback sport (bought used) and Toyota Prius (bought new).

  6. #6
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    Quote Originally Posted by hfc View Post
    What kind of budget are you looking at?
    Well I had my rainy day fund up to about $3,000, but if things pick up with my wife's contract work we may go as high as $6,000.

    Between the cash for clunkers, the two hurricanes and the generally crappy winter salting here in the Northeast, the used car market is pretty bad.
    Last edited by paredown; 06-25-2013 at 03:30 PM.
    "When the spirits are low, when the day appears dark, when work becomes monotonous, when hope hardly seems worth having, just mount a bicycle and go out for a spin down the road, without thought on anything but the ride you are taking."

    (Sir) Arthur Conan Doyle. Scientific American, January 18, 1896

  7. #7
    We have met the enemy...
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    Quote Originally Posted by SauronHimself View Post
    If reliability and maintenance history are your biggest concerns, spend the money on a CPO. CPOs have to meet strict critieria that basically put them in a new car category but with some miles on them.
    In the past we have bough manufacturer certified CPO--with slightly mixed results. The cars were generally reliable, but they had been tarted up for resale--in one case they had used some kind of cutting polish on the clear coat to clean up tree stains and then waxed the heck out of it.

    The other was delivered with mismatched tires, non-working AC and a few other problems--and in that case the dealership went broke shortly after our purchase, so I'm assuming they were generally crappy businessmen.

    Last year before my wife lost her job for the third time since the recession we were looking at VW Passat CPOs since they were offering great financing on them--but they are probably too expensive for us now.
    "When the spirits are low, when the day appears dark, when work becomes monotonous, when hope hardly seems worth having, just mount a bicycle and go out for a spin down the road, without thought on anything but the ride you are taking."

    (Sir) Arthur Conan Doyle. Scientific American, January 18, 1896

  8. #8
    We have met the enemy...
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    Last post and I will shut up about this. On our list:

    1. Volvo 850/early V70 wagon;

    2. Passat wagon B5/5.5 (so 2001-2005);

    3. 1990s BMW wagon (E34 series) although this a long shot, since they are somewhat rare and usually high mileage;

    4. Audi A4--maybe, although usually too pricey

    Other makes have crossed our radar, and we have not ruled them out--except generally we are not fond of American cars, or Toyotas, despite their reputation for reliability. Not a big Honda fan either, and don't really know much about Subarus, but didn't like them much when I drove them...

    None of the picks have stellar reputations--but they are all cars that I enjoy and would be willing to work on (or have worked on them)--and in the case of both Volvo and VW, we have excellent mechanics close by.
    "When the spirits are low, when the day appears dark, when work becomes monotonous, when hope hardly seems worth having, just mount a bicycle and go out for a spin down the road, without thought on anything but the ride you are taking."

    (Sir) Arthur Conan Doyle. Scientific American, January 18, 1896

  9. #9
    RoadBikeReview Member
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    'The Market for Lemons', or looking for a decent used car...

    Having a good local mechanic is key, and asking their opinion is also a good idea, especially if you subsequently buy the car in question and expect them to work on it. That said, the only time I've ever had a mechanic evaluate a car for me (VW Jetta GLI, many years ago), it turned out to be the worst car I ever owned. Caveat Emptor.

  10. #10
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    There were roughly tens of thousands of cars that got flooded during Sandy.

    Thus I'd be worried about all those vehicles that made it into the used car market. Not sure CarFax is that reliable.

    Odd thing is I'm going used car shopping tomorrow. I venture forth under the possibly mistaken notion that a used car from a dealer is less likely to have hidden issues, especially low mileage vehicles that came back as a trade up.

    A crap shoot for sure.

  11. #11
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    Quote Originally Posted by paredown View Post
    the used car market is pretty bad.
    so consider buying out of state and taking a drive?
    * posted by Creakybot 2013 all rights reserved.
    * not actually waterproof.

  12. #12
    Cranky Old Bastard
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    Quote Originally Posted by Creakyknees View Post
    so consider buying out of state and taking a drive?
    We're lucky that sites like autotrader.com make it so easy to search a large area.

    Once I decided what make and model of car I wanted (with the rare manual transmission) the best prospect I found was in Kentucky while I'm in Ohio. I made the initial call, talked with the owner and he agreed to pick me up at the airport. Fell through when he sold the car and saved me the price of a plane ticket.
    I got lucky and only had to drive 60 miles to Cleveland to buy the car I own now.
    "When you know absolutely nothing, anyone who knows 1% more than nothing sounds like an expert."

  13. #13
    Ricardo Cabeza
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    I'm pretty happy with the Saturn I'm driving now. It's a 1997 SL1. Mrs69 bought it new in 1996 so I know the service history and it was well taken care of. My only complaint is the interior is beginning to fall apart as the plastic gets brittle from being in the Memphis sun for the last 17 years, so it has a few buzzes and rattles relating to that. But mechanically it runs beautifully with about 110k on it. I'll be driving it to New Jersey next month for a project and have no qualms about that.

    Just be sure to get a 1998 or newer, since all of those have the redesigned head casting. About half of the 97s had the old design which was prone to cracking at 100k or so. I think I lucked out. Should be able to pick one up for less than $1500 if you're patient.

    Plus if you decide to autocross, the SL2 with the DOHC engine runs in H Stock, which gives you a kick-ass PAX adjustment, and you can even run r-comp tires without a class penalty
    Whenever the legislators endeavour to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people who are thereupon absolved from any further obedience, and are left to the common refuge which God hath provided for all men against force and violence - John Locke

    SuperAndy's Garage

  14. #14
    We have met the enemy...
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    Quote Originally Posted by Creakyknees View Post
    so consider buying out of state and taking a drive?
    I have been searching fairly widely. Some states like CA make it easy, since they will give you an interstate transit permit, so you can fly out once, do the deal, get the permit and call your insurance and hit the road. Florida too, AFAIK. (of course, some states refuse to recognize them, but that just means you need to cross at night

    I have been sorely tempted to do this--buy a nice rust-free California car and drive back.

    It really has become more of a national market now--cars.com & autotrader both let you search, and some makes let you do national searches for CPOs.
    "When the spirits are low, when the day appears dark, when work becomes monotonous, when hope hardly seems worth having, just mount a bicycle and go out for a spin down the road, without thought on anything but the ride you are taking."

    (Sir) Arthur Conan Doyle. Scientific American, January 18, 1896

  15. #15
    Sweet Potato Kugel
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    -Connecticut as an example seeing it's a nearby State - we back out our trade-in value from the new purchase price and only pay tax on the remainder. For the few thousands or hundreds you'll save selling privately, it's only a couple extra dollars a month in a new car loan with that loss of trade in vs private sale. To many it's not worth the hassle to privately sell. It is a hassle.

    As for what type of car to buy? I can't help you. When you see T0G buying a brand new car for $7,000 plus under invoice because it's almost two model years old... that's all win for $10k That's a 100,000 mile warranty too. There are deals out there and you'll just have to look.

    I wish you luck. Saturns are great cars.

  16. #16
    Non non normal
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    My brother bought a BMW 3 series and a volvo v70 wagon from private owners.

    Many people that take excellent care of their vehicles are not willing to trade them in because they feel like they are getting ripped off and all their coddling of their vehicle would have been in vain.

    The key to success is to know who you are buying it from. A person that has an immaculate house, garage, and yard is most likely going to also take care of their car.
    "There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle." --A. Einstein

  17. #17
    RoadBikeReview Member
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    The key to success is to know who you are buying it from. A person that has an immaculate house, garage, and yard is most likely going to also take care of their car.

    In our case, we got the car from somebody like this.........who also happens to be 80+ years old, and has backed the car into the garage, hatch-up, at least three times (but has gotten it fixed each time.) It'll be something or another!

    +1 on the flood concerns, but there are ways of telling whether or not the car was flooded.

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