Used Cars Cost More Than Ever. Here's How to Avoid Getting a Bad Deal

The first thing to do when you're thinking of buying a preowned vehicle is to look for a comprehensive registration, maintenance and insurance report, which can be traced using its unique vehicle identification number (VIN). There are many services providing vehicle history reports, such as Carfax and AutoCheck. Reputable dealers will have partnerships with at least one of these providers and should be able produce a VIN report for consumers at no cost. In the U. S., a VIN is made up of letters and digits, totaling 17 characters. It can typically be found in the lower driver's side corner of the windshield.

If you're buying from a private seller, you can generate a report for yourself by giving the correct ID number to a vehicle history website (like the ones we mentioned earlier) and paying a nominal fee.

"You may want multiple reports from different providers because there can be discrepancies across platforms," says David Paris, senior market insights manager at J.D. Power. (He analyzes market data for the new and used vehicle markets.) If the selling party is unwilling to provide the VIN on request, that should be a massive red flag for the car's history.

Once you have the report, what will be on it? Best-case scenario: It will point out all locations the car has been registered, what major services it's had and any possible damage it sustained in collisions or severe weather. Accident entries would specify which section of the vehicle was impacted. Each of these data points also would have a corresponding mileage readout.

In reality, the history report is often the responsibility of the previous owner(s), and it can be spotty. A previous owner might perform a repair at home rather than at a licensed garage, or they could neglect to report an accident to their insurance company. These actions can prevent a lot of data from being recorded on the VIN report. When faced with a lack of concrete history, you can either move on to the next deal, or take a more hands-on approach searching for damage, as in our next tip.

If a car was involved in a major accident, there will often be indicators, especially if it's been repaired outside of a manufacturer-approved shop. Here are some of them:

Now, a suspension out of alignment might not be a deal-breaker, as it can occur during many miles of normal driving. However, it may also indicate components have been bent by a collision, or by running over a really bad pothole. If the misalignment is due to normal use, then it should be simply corrected at any shop with an alignment rack. If your selling party has that equipment, request that they confirm the alignment is within manufacturer specs before proceeding with a purchase.

For even more in-depth history analysis, David Paris notes that it helps to have an expert mechanic around. "They have equipment that can help identify issues as well as years of experience in and around various makes and models. They will likely have the computer that can check the vehicles modules for mileage discrepancies or previous air bag deployment as well as access to lifts to examine the underside in greater detail," he says.

Putting the car up in the air will allow a much better view for scuffs, dents, corrosion or missing trim pieces along the undercarriage. Many garages will provide pre-purchase inspections for around $200. Not exactly cheap, but it beats buying a car with unknown issues. "Some repairs can be undetectable to the untrained eye; that's why it's so important to get an expert's opinion," he says. Most used car sellers will allow you to take the car away to be inspected or to bring a mechanic along to the seller's home or business. If they won't agree to an inspection, that is another red flag.

Overall, just because a car was in an accident and repaired, doesn't mean you shouldn't buy it, provided the damage was reported through the correct channels, and it was fixed to the manufacturer's specifications. Damage and repairs that go unrecorded should raise more suspicion, especially when they appear alongside other signs of neglect. As a general rule, an obvious repair is a low-quality repair, and high-quality work will be nearly invisible.

"Seek your trusted mechanic's opinion. Lots of incidents are very minor, it could be something as simple as a scratch down the side of the vehicle that has been touched up," Paris says. "From a valuation standpoint, if a deal seems too good to be true, it might just be. In today's climate, used vehicles are in short order, and nice examples are selling for a premium versus prior years. There is more demand than supply in the used market, so be sure to have a trained set of eyes look at the vehicle before making a decision."