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Buying a second hand car? Top tips to avoid buying a lemon

Posted on 23 June 2016

If you’re planning on buying a second hand car, you definitely want to avoid purchasing a lemon. Not sure what a ‘lemon’ is? Think of it as a car that doesn’t live up to the value you think it represents. Instead, once purchased, it reveals a trail of costly defects, faults, and potential credit issues when you should be enjoying your first year(s) of ownership.

We’ve got some simple steps that can help you avoid anything taking you by surprise with your used car purchase.

1. Be clear what you’re looking for
Disappointment can come not just in hidden faults but also through needs that haven’t been met. Start off by being really clear with yourself about what you are looking for in your next car. Setting clear goals will help you to avoid impulse buys then regretting your purchase when you get further down the road.

2. Check out the value
A little desktop research can go a long way in helping you to protect yourself from paying more than you should for a used car. If a specific car catches your eye, take time to review similar models online and compare value with a particular focus on mileage, age, condition and number of owners.

3. Take a closer look 
The first stage of inspection is to physically visit the car you’re interested in (in daylight) and have a good look around. If you don’t know anything about cars, see if you’ve got a friend who does and take them along. A visual inspection will help you to review the condition of the car vs. the description of the advert, as well as checking basics like tyre tread, and interior and exterior condition.

This is a good opportunity to ask to see the car’s service history. If the car’s maintenance is well documented there’s a good chance it’s been well looked after by it’s owner. If there’s no documentation available, you could at least ask if the owner has any copies of registration documents so you can check that the VIN (vehicle identification number) and engine number match those on the registration papers. The VIN is a 17-digit code usually found on a metal plate under the bonnet and is unique to each vehicle. 

4. Test drive
If you like what you see from the visual inspection, then take the car for a drive and see if it handles well. Remember the goals and original objectives you set when you started your search and sense check that the car you are driving ticks all the important boxes. Listen carefully for any strange noises and ticks (you can check the radio works but turn it off while you are driving) and try driving the car in traffic and on the open road if possible.

5. Check its history
Lemons are often the product of major incidents that have required extensive repairs but are not visible on the surface. Being sure that this isn’t true of your car is only really possible if you get an expert to help. For best results you can combine a vehicle history report with a vehicle inspection through a reputable firm.

Your vehicle history report will help you identify any registration gaps, odometer discrepancies or ownership issues that could mean the car has a registered security interest on it (i.e. it’s been used as security for debt). It’s important to protect yourself from your car being repossessed because someone else owes money against it and hasn’t managed their debts.

Your vehicle inspection will allow you to be confident about the working order of the engine and whether it would pass a warrant of fitness. Pay particular attention to areas like cambelts and tyres which can be expensive to replace and are essential to the safe running of the car.

Buying a second hand car is a great way to get good value for money. But it’s unfortunate that some sellers may not disclose every single nick and fault when they put their car on the market. Following some simple steps and getting some expert help can protect you from an investment that could end up costing you lots of money in the long run. Then you can be sure that when you make a final offer and sign on the dotted line, you’ve got the ride you were looking for.

If you’re getting ready to go car shopping and would like to talk about your car loan options, give the team at Online Car Loans a call on 0800 88 2000. We’ve helped thousands of Kiwis get on the road by providing them with a car loan that works with their budget.

Please note, this article does not represent personal financial advice.