It is estimated that 1/3 of millionaires buy second hand cars. If they do, why don't you? The quality of used cars under 15 years of age is generally quite good. Problems with engines are rare whereas the cars of 25 years ago regularly had engine problems. Do you remember having a manual choke? It is easy to forget isn't it? Even though the quality of cars is better we still need to follow some important rules:

To find out about various makes and models, it is worth doing some research to find out if there are any problems in that particular model and what it's strengths are. Again we suggest you try http://carsales.com.au/ or google the words "car sales" or "cars" to find similar sites.

Another good option is car magazines at your local newsagent.

Where to buy?

The options are endless, these are the main ones:

Private sale

Licensed Motor Card Trader (LMCT)

Auctions

Private sale

Private sales can often provide the cheapest price however the risks are the greatest. Please check these points.  

Research to ensure you know what you should pay for this type of car. You should expect to pay about 20% less than the average price through car dealers.

Take the car for a test drive and if satisfied this is the car you want start negotiating. Prior to this however ask the owner is there anything about the condition of the car that you should know about?

Have a motor mechanic inspect the vehicle. A good option is the local motoring organisation who have specialists that do this full time for a living. They usually charge around $125 per inspection and more for 4 wheel drives. It is well worth it.

If there are some faults you can always walk away. Remember when negotiating state that the agreed price will be subject to you receiving a satisfactory vehicle check. If you are still keen on the car, what will it cost to repair it to your satisfaction? Given your original question re condition of the vehicle, here is an opportunity to further negotiate on the price.

Next step is to ensure the vehicle you are intending to buy is not under a finance arrangement. To do this contact the following organisations: or similar ones in your state ie Vic Roads, NSW Roads etc.

Licensed Motor Car Trader (L.M.C.T.)

Most used cars are bought this way. You can be usually comfortable the vehicle is not security under a finance arrangement. It is however well worth asking the salesperson for proof of their check. With large dealerships in particular you can usually be comfortable with the soundness of the vehicle. The better quality dealers will not sell vehicles of poor quality, preferring to sell any that come in via trade in to small used car dealers or at auctions. The smaller used car dealers you should treat no different than if it was a private sale. That is obtain a vehicle inspection.

Apart from that you need to negotiate with a car salesperson. Refer to the new car section for hints in this area.

Auctions

Auctions can be cheaper than dealers. In many cases dealers buy their used cars from auctions. Just like there is different types of dealers the same goes for auctions. The larger ones might have 3 auctions going at the same time. One section may be selling ex government cars, another ex fleet and repossessed vehicles while the last may be selling vehicles in a lower price range.  

Most auctions don't allow a thorough vehicle inspection. They usually require payment before taking the vehicle away. Please check payment arrangements before deciding to bid. Also ensure the vehicle is insured and registered before leaving the auction.   

Auctions are an exciting way of buying a car at a discount. Make sure you visit the auction centre a couple of times before bidding and obtain a copy of rules before considering to buy.

Probably the biggest car auction centre in Australia and New Zealand is Manheim Fowles fomerly known as Fowles Auctions. They have auction sites in over 10 different locations in Australia and New Zealand. If you are interested in buying at auction this has a good volume of cars. Have a look at their site for further information. http://manheimfowles.com.au/ The site lists all the vehicles due to go to auction, what it doesn't tell you is what they sold for after the auction has occurred. To gain this information send them an email (details on their site) asking how to obtain a copy of their booklet (vehicle auction report) which is produced monthly and usually available about the 10th of each month. The booklet at at March 2007 cost only $6 so it is great value. This booklet is not commonly known. Even if you don't buy a car at auction it is still handy to know what the dealers are paying for their used cars.

For other countries again go to the search engines and key in words like "car auctions" to research about auctions. Don't forget to see if they can provide details of sales prices.

Summary

  Just remember these main rules

1.      Have the car inspected by an expert.

2.      Negotiate.

3.      Know the current value by checking out various internet sites.

4.      Ensure the car is not under existing financial arrangement.

Good luck and Happy Driving