POTENTIAL PROBLEMS/WARNING SIGNS
The most sought after used cars are probably less than five years old and have less than 50,000 miles on the odometer. When you're looking for a used car, you'll probably want to find one that has been driven no more than 15,000 miles per year. But you can't assume that a low-mileage car is necessarily in great shape.
One major concern is odometer tampering. The National Highway Traffic Safety Administration (NHTSA) estimates that consumers lose billions of dollars a year to odometer fraud. Odometer readings may be rolled back or documents can be forged. Making miles disappear helps increase the car's value to the seller, but can mean increased maintenance and repair costs to the buyer.
In addition to odometer fraud, there are other significant events in a car's past that unscrupulous sellers may try to hide. Every state has laws designed to protect consumers from buying used cars that may not be road worthy. Consumers should be direct when asking about a vehicle's past, and they should get a detailed vehicle history report. The person selling you a used car should provide a detailed vehicle history answering questions to your satisfaction.
If the seller cannot provide a detailed vehicle history report, you can use the 17-digit vehicle identification number (VIN) to secure a history from either the state or a private vehicle history company. These companies have compiled data from multiple sources to help you get a better picture of the car's past. You can search the web to find the companies providing this service by looking under the topic of "vehicle history."
OTHER PROBLEMS
Other problems you may want to avoid include:
Damage Disclosure, Salvage & Rebuilt Titles. These titles are issued by states when the vehicle has sustained damage as a result of one or more incidents. States issue salvage titles when an insurance company takes possession of a vehicle as a result of a claim. This generally occurs after a vehicle has been declared a total loss. A state may issue a rebuilt title if a vehicle sustained damage and was rebuilt or reconstructed, then placed back on the road. States issue junk titles to indicate that a vehicle is not road worthy and cannot be titled again in that state.
Lemon Laws (Manufacturer Buyback Titles). "Lemons" are sometimes resold to consumers as used cars. The lemon laws were enacted to protect consumers from having to keep a new car that has recurring problems. If someone buys a new car with major problems, and the manufacturer fails to repair the defect in a certain amount of time, the manufacturer may be required to refund the consumer's money by buying the vehicle back. Unfortunately, some of the vehicles which are bought back are subsequently resold as used cars.
Flood Damage Title. States issue flood titles when a vehicle has been in a flood or has received extensive water damage.
A NOTE ON CURBSTONERS
Most states limit the number of cars that an individual can sell without a dealer's license or only allow the selling of one's personal car. Curbstoners are people who ignore these laws and sell multiple cars that frequently have hidden problems in their pasts — problems that can affect both the safety and the value of these vehicles. Before buying any used car, you should research both the vehicle and the seller. Be wary of sales conducted from the side of the curb or a vacant lot. Often these vehicles are sold by con men posing as private individual sellers.