Badass vs Dumbass
Master your Financial Kung Fu to be one and not the other.
Go to Sifu’s Notebook for 11 Reasons Buying a Used Car Might Be Risky & How To Play It Smart
Primer: Who are Sifu & Ronin
Episode 19: Ronin vs Steve McQueen
Sifu: Listen Frank Bullitt, let’s talk about this idea you have to buy a new car. I don’t want you to make a massive mistake, #1.
Ronin: What’s the big dealio, amigo? My rusty ride is on its last legs.
Sifu: If that’s the case, there are alternatives to hitting up the new car dealership. I know those new car ads can suck you in, but you have to understand the true cost of such a decision. It’s quite easy for a new car purchase to totally derail your journey to FIRE status. Have you considered a used car instead?
Ronin: Whoa buddy! I don’t want to replace my piece of junk with someone else’s piece of junk.
Sifu: 100%, agreed. You don’t have to buy garbage, dude. It’s a myth that “old is bad”. There are plenty of excellent used cars out there – you just have to want one, and then look for it. Can be done – I’ve done it my whole life.
Ronin: Really, big guy? I only see killer badass cruisers on your driveway. Some of those mean machines have to be pretty new.
Sifu: Well, I take excellent care of all my cars, so it may be hard to tell that they are all older. Every one of them was bought used, but each was in excellent condition, even though they were on average 8 years old when I bought them. I try to keep them looking mint too, by washing, polishing and detailing them. Just because they’re old, doesn’t mean they have to “look” old, feel me?
Ronin: That’s incredible. They look dope, but do they run well, after all these years of use?
Sifu: Absolutely. All my babies receive their scheduled maintenance and any issues are resolved by me or my trusty mechanic who specializes in these cars. So, they all purr like your kitty.
Ronin: Sweet! You’ve opened my eyes to a world of possibilities, bossman! But, I’ve heard there are so many gotchas when buying used. I don’t want to be a sucker and make a huge mistake getting the wrong car that turns into a money pit. Your guidance in this area will help me make a good decision, right Sifu?
Sifu: Yes #1. I’ll do my best to steer you away from the challenges and find hidden gold in the used market. You too can have a gem of ride on your driveway, and keep you on your path to FIRE.
1. Hidden Mechanical Issues
Ronin: That would be next-level! First, Sifu – can we talk about mechanical issues? How I do I know I’m not looking at a lemon with all the bugs hidden from sight? I don’t want to get hit with a $2,000 repair bill in the first month of ownership!
Sifu: Yeah, that would suck serious wind, Mad Max! Always do a thorough test drive – make sure the car drives exactly as it should. If you’re not confident about this, bring a friend who knows more about cars and they can assist in seeing and driving the car.
Ronin: Can do – I can def take it for a long spin. I’ll know pretty quickly if it’s a good one or not, superficially anyways. What about hidden gremlins?
Sifu: Oh, those ninja nuisances can suck worse! For that, you can always take it to your trusty mechanic for a PPI or pre-purchase inspection. For a bit over $100, they can go over it to ensure it’s not a busted lemon. If you love the car but are slightly worried about it still, I would suggest that.
2. Higher Maintenance Costs
Ronin: What about potential higher maintenance costs and never ending repair bills? Aren’t owners usually subject to getting ripped a new one every time they visit their mechanic with an older car?
Sifu: Ah! Here’s where you’ve already done your homework ahead of time. For the year and model that you’re interested in, check what respected websites and reviewers say about it. You’re looking only for those models that pass this smell test. Some models have a terrible record for reliability – stay away from those, even if they look really sweet on the outside. Just like when you approach an ultra-attractive honey – if she opens her mouth and flies come out, I suggest you run like the wind, Romeo!
Ronin: Fact! So sweet on the outside and inside is what I want. I can hit up YouTube like no one else, boss. All over that “homework”. It’ll be fun to watch those reviews too. I’ll either get excited about the car, or find out it’s shite, hee-hee.
Sifu: And never get any slick model that has been shown too often to require a new transmission, or other major repair, that will set you back thousands.
Ronin: WTF! Thousands? That’s Sauron-level evil, dude! Great heads-up, bossman.
Sifu: Yes, #1. Stay on top of the research otherwise your money may be Gone in 60 Seconds. You should also request a review of maintenance records from the seller. If they have it, it’s a definite bonus.
3. Outdated Technology
Ronin: Captain, what about outdated tech? I gotta have certain features like Bluetooth, backup camera and navigation. I don’t wanna be stuck with a barebones Flintstone car, bro.
Sifu: Make a list of what you absolutely need and ensure the car has them. Alternatively, every one of those particular wants can be added on to the car afterwards. There are excellent aftermarket solutions for them, sometimes much better than factory installed ones. No losing here.
4. Potential for Outdated Design
Ronin: What about the used car looking dated? My whip has to look sharp and turn heards, my man!
Sifu: Ha! Of course it does. Used doesn’t have to mean “bad design”. There are some classic lines on certain brands and models that don’t go out of favor. You have to know yourself a bit here, as it’s very personal. A lot of car connoisseurs appreciate older designs that still look amazing years after they came out. I personally think so many new car designs either start to look alike or they go too far and are just weird. When you have a chance, do a little digging on older designers like Pininfarina to understand that exquisite design never gets old. Vintage works sometimes too. Do my cars look dated?
Ronin: No way, Sifu. Your epic wheels are stunning.
Sifu: Appreciated, bro. If you happen to score an older ride that has been taken care of extremely well and appears as if new, and that happens to have exceptionally clean and stylish lines, you’ll have an absolute winner. That needle in the haystack exists – just find it. That car will also stand out because there will be fewer of those on the road, in that condition. They were head turners when they came out, and yours will still be.
5. Potential for Title Issues
Ronin: What about title issues, bossman? I heard they can be a serious concern. A car with a salvage or rebuilt title might be hiding more than a few dents.
Sifu: That’s an easy one, Harvey Dent. You can verify the title status through a Vehicle History Report. You can get one from the government transportation office. Ensure that the title is clean and free from any salvage or rebuilt designations. Done and done, son.
6. Unknown Previous Ownership
Ronin: What about not knowing whether the previous owner handled the car with kid gloves or beat it like a rented mule?
Sifu: Review the car’s ownership history through the vehicle report and inspect the car for signs of neglect. Sometimes, the owner will provide a CARFAX – if not, you can always get one if you want to be sure of its history.
7. Potential for Hidden Damage
Ronin: Cool, boss. What if this car’s been in more accidents than a stunt double? How do I uncover its hidden history?
Sifu: That’s in your PPI and CARFAX we spoke of earlier. Your mechanic and/or body professional can inspect the car for any hidden damage, and look for inconsistencies in the car’s body and paint.
8. Expired Warranty
Ronin: OK, that works Sifu. What about used cars that are out of warranty? Most new cars come with 4 or 5 years. Can I dodge the repair bills without it, like evading a hundred bullets in The Matrix?
Sifu: Hell, yeah, Neo! This mostly comes back to the homework you did on the particular year and model you’re looking at. Once you understand what future maintenance looks like from others, you can forecast if the car makes sense to own without any extra expense of a warranty.
Ronin: Really boss, no warranty is ok?
Sifu: Warranties are not always worth what you pay for them, #1. I personally self-insure, and never get an extended warranty. Trust me – the company wouldn’t sell you that warranty if it wasn’t on average going to make them big money. I don’t do that – I just budget a decent amount each year for maintenance work. I’m fine, and you can be too.
9. Potential for Fraud
Ronin: Gotcha, bossman. What about fraudulent practices, such as odometer tampering? Asshole ripoff artists are out there!
Sifu: Yup! Verify the car’s mileage and history through reliable sources, such as the CARFAX and Vehicle History Report and buy from a reputable dealer or a seller you believe is trustworthy.
10. Risk of High Repair Costs
Ronin: Sifu, I heard some used cars, especially luxury models, can be costly to repair. So, my ‘bargain’ might come with repair costs that could bankrupt a casino. How do I avoid this?
Sifu: Boils down to the same homework as before. For added surety, you can do some additional research on repair costs and parts availability for the specific model before purchasing. Here’s another tip: you can try to get a car model in its “golden year”. That’s the final year of a car’s production run where manufacturers have ironed out all issues and bugs plaguing earlier versions of that model. It’ll usually be way more reliable.
Knowledge is power.
Sir Francis Bacon
11. Potential for High Mileage
Ronin: Amazing tip, Sifu – that one, I will write down and highlight! Now what about high-mileage vehicles – they’ve experienced more wear and tear, right?
Sifu: Mostly true, Ronin. I stay away from vehicles over 60,000 miles, but every car is different. To be taken seriously by me or you, anything older must have a clean history of maintenance. Sometimes, you get lucky and the previous owner has been anal about his baby, and has records to prove it. That’s a serious winner.
Ronin: That’s too legit to quit, boss! I’m going to take all this and do a deep dive into the cars I’m interested in, and really find out if these epic cars are cool to own or a headache I don’t need.
Sifu: Perfection, #1. I’m curious to see what you come up with.
Ronin: Whatever it ends up being, it’s gotta have a smokin’ hot chameleon purple rain paint job, and when I step on it, it’s gotta be able to smoke all comers! Feel me, bro?
Sifu: Holy crap, Princess! Talk like that is going to smoke your bank account balance in mechanic fees for big turbos and endless maintenance! Looks like this is going to take way more time than I thought. Dang! Review what I just told you today, do your research, and we’ll see if you still think like that afterwards.
Ronin: Gotcha! Just playin’ with you, big guy. Hee-hee. There will not be any iridescent paint jobs or tricked out engines in my future. I want super cool and super reliable. I’ll leave trouncing the competition to Cousin Cletus and his epic old school Mustang. He’s madder than Max!
Sifu: Well done. If that’s the case, lunch is on me, Fast ‘n Furious.
Ronin: Yeehaw! Feets don’t fail me now. Let’s go!
Sifu’s Notebook
11 Reasons Buying a Used Car Might Be Risky & How To Play It Smart
1. Hidden Mechanical Issues
Problem: Used cars may have mechanical problems that aren’t immediately visible. These issues can lead to unexpected repair costs shortly after purchase.
Avoidance Tips:
- Pre-Purchase Inspection: Always have a trusted mechanic perform a thorough inspection before buying the car. They can identify potential issues that you might miss.
- Vehicle History Report: Obtain a detailed vehicle history report from services like CARFAX or AutoCheck. This report can reveal past accidents, major repairs, and other crucial information.
- Test Drive: During the test drive, pay attention to how the car handles, any unusual noises, and the performance of essential components like the brakes and transmission.
2. Higher Maintenance Costs
Problem: Older vehicles might require more frequent and expensive maintenance compared to newer models.
Avoidance Tips:
- Research Reliability: Check the reliability ratings for the car model you’re interested in. Some models are known for having higher maintenance costs.
- Review Maintenance Records: Ask the seller for maintenance records to understand how well the car has been cared for.
- Consider Extended Warranties: Look into extended warranties or certified pre-owned (CPO) programs that offer additional coverage.
3. Outdated Technology
Problem: Used cars often lack the latest technology and features found in new models, such as advanced safety systems and modern infotainment options.
Avoidance Tips:
- Feature Checklist: Make a list of the features you want in a car and compare them with the technology available in the used car model.
- Evaluate Future Needs: Consider how long you plan to keep the car and whether its technology will meet your needs in the future.
4. Potential for Outdated Design
Problem: A used car might have an outdated design that doesn’t meet current standards for aesthetics, comfort, or functionality.
Avoidance Tips:
- Design Comparison: Research the design and updates of the car model over the years to ensure it still meets your preferences.
- Test the Comfort: Make sure the interior design, seating, and overall comfort align with your expectations.
5. Potential for Title Issues
Problem: Used cars might have title issues, such as salvage or rebuilt titles, which can affect their value and safety.
Avoidance Tips:
- Check Title Status: Verify the car’s title status through a vehicle history report. Look for any indication of salvage or rebuilt titles.
- Clear Paperwork: Ensure all title paperwork is clear and correct before finalizing the purchase.
6. Unknown Previous Ownership
Problem: You might not know how the previous owner treated the vehicle, which can affect its condition and reliability.
Avoidance Tips:
- Request Ownership History: Look for detailed ownership history in the vehicle report to understand the car’s past.
- Inspect for Signs of Neglect: Check for signs of wear and tear that might indicate how the car was maintained.
7. Potential for Hidden Damage
Problem: Used cars might have hidden damage from accidents or poor maintenance that isn’t immediately apparent.
Avoidance Tips:
- Professional Inspection: Have a professional mechanic inspect the car for hidden damage, such as frame issues or previous repairs.
- Check for Consistency: Look for inconsistencies in paint or body panels that might indicate previous damage.
8. Expired Warranty
Problem: Many used cars come with expired manufacturer warranties, leaving you responsible for repairs.
Avoidance Tips:
- Consider Extended Warranties: Purchase an extended warranty or look for certified pre-owned (CPO) vehicles that come with a warranty.
- Verify Existing Warranty: Check if any original warranty is still active and transferable to you.
9. Potential for Fraud
Problem: The used car market can sometimes involve fraud, such as odometer tampering or misrepresentation of the car’s condition.
Avoidance Tips:
- Verify Mileage: Cross-check the car’s mileage with service records and the vehicle history report to ensure it’s accurate.
- Buy from Reputable Sources: Purchase from well-reviewed dealerships or sellers with a good reputation to minimize the risk of fraud.
10. Risk of High Repair Costs
Problem: Some used cars, especially luxury or rare models, can be expensive to repair and maintain.
Avoidance Tips:
- Research Repair Costs: Investigate typical repair costs for the specific model you’re considering.
- Parts Availability: Ensure that parts for the car are readily available and not prohibitively expensive.
11. Potential for High Mileage
Problem: High-mileage vehicles can experience more wear and tear, potentially leading to higher maintenance costs.
Avoidance Tips:
- Check Mileage: Consider the car’s mileage in relation to its age and typical usage. A higher mileage might indicate more wear.
- Inspect the Condition: Evaluate the overall condition of the car to ensure it has been well-maintained despite the mileage.
