We’ve all heard the stories about one of our friends who had a friend who saw a mint condition S13 on the side of the road with a “for sale – $2000″ sign and upon further inspection, found out that it was bought brand new by a little old granny who only used it to go to church on Sunday and simply can’t drive it anymore because the clutch is too hard on her frail bones. Now while I do believe this has happened, I feel like these stories ruin our expectations when it comes to buying a new (old?) car. I’d go as far to say that 9.99 times out of 10 you will not find a deal like this. From people who think that sentimentality plays a part in pricing a used car, to people who just don’t get that their car is overpriced, the used car market is a hard place to navigate. I’m not saying you won’t ever get a good deal but you have to be realistic about what to expect when buying a used car otherwise you will end up with nothing. Although patience is key, I thought I would compile a little list of things I have learned to consider when buying a new car (especially when on a budget) due to the fact that I have just purchased my 13th car in the last two years. Please note that I hate used car dealers with a fiery passion so all these tips are for personal ads, forums and classifieds.
No used car is perfect, ever. Really, ever.
If you’re like me and are on a budget you will need to understand that you’re more than likely going to end up having some problems with whatever car you buy. Hopefully you are aware of these problems prior to the purchase but sometimes that isn’t the case. You have to weigh up the cost of fixing these issues against the time frame of which they need to be fixed. For example, a worn CV boot makes an annoying sound occasionally but you most likely won’t make the engine explode if you don’t handle this immediately. It’s also pretty cheap when you do decide to fix it. On the flip side, a car that needs a new head gasket is a car that will need it relatively quickly. If you’re looking at a car with problems try and get quotes on all the parts and labour before making an offer, that way you know exactly how much of your budget you have to work with for the initial offer. Earlier this year I bought a used Toyota Levin for $2700 knowing that it had some issues. I also knew that while I didn’t have more than $2700 to spend on a car at that point, I would have more money in the future. It would have been great to be able to drop $8000 on a better kept version of the car but I would rather put time and money into it gradually to see the end result anyway. So after weighing up whether or not the car was worth the price and how much it would cost to fix the problems over the next few months and also whether I was prepared to spend the money, I decided it was worth it and accepted that it would have issues. I ended up selling the car because I just couldn’t afford to keep up with all the things that were wrong with it, although I don’t regret buying it because I learned a lot about cars from doing so.
The four things that will play a role in the pricing of a car:
There’s a few things that I have noticed that determine the pricing of a used car. When reading these bare in mind that I have left out the “person who is a complete nutcase and thinks their younger brothers 92′ carby Civic is worth $6500 just because it has fake rims, a JDM sticker bombed guard and 7 months rego” kind of guy due to the fact that I’d hope you’d know better than to deal with this type of person. While being stronger in some parts of this list will change the price of the car, it’s important to do research into the particular model you are after to get an understanding of what the car is worth. For example (these are very rough estimates and are just to explain), a Nissan Silvia S13 in ok condition (some paint fades, worn interior, light scratches etc) with 120,000k’s and 2 months rego for $5,000 is a relatively good deal, likewise an S13 in good condition with 11 months rego and 180,000k’s for $5000 is also a pretty good deal. So even though there are some differences in the car the pricing is reasonable based on the fact that the good and bad parts of each car kind of cancel each other out. That being said someone might prefer low k’s over good condition body or vice versa, it all comes down to what you want in the end. Here are some more things which I think determine the price of a used car:
1. Make/model/year/condition of the body
I think this is the main thing that will determine the price of any used car. A general rule of thumb is that a newer model of a car is worth more than an older car. The year and condition of a car are the main things that people are interested in after all but sometimes a newer car isn’t necessarily worth more. For example, typically a Daewoo from 2004 will be worth no where near as much as say a Toyota Supra from 1994 even though they’re ten years apart. However a Toyota Supra which is rusted and has no motor or gearbox and hasn’t been registered in 7 years will probably go for less than a Daewoo that is running, registered and in good condition. Again that being said it is personal preference, I know someone who spent $4000 on an AE86 shell that had no motor or rego and he has no regrets at all. Damage to the body of a car will also bring the price down as a good condition body will usually reflect a car that has been taken care of. That’s to not say expect every good car to be immaculate because more often than not even a well kept 10+ year old car will have some damage. Though be careful when buying a damaged car because what you can see might not be all that is there, I would also strongly recommend doing a REVS (or equivalent vehicle history check) just to be sure.
2. Motor/gearbox/driveline/brakes/wheels/optional extras
Cars come with lots of different parts and optional extras, even in the same model. For example the R33 Skyline can have an RB20 motor in it which in my opinion is underpowered and crap, I owned one for a few months and hated the motor. I loved the look and feel of the car but the motor was shockingly slow and boring. I picked it up for $3000 thinking it was a steal because all the other R33′s were $6000+. I later found out that the R33 also came with an RB25, Turbo RB25 and either a Twin Turbo RB26 or Single Turbo RB28 in the two and four door GT-R, along with a load of performance upgrades to the brakes, suspension and also optional extras such as a sunroof. So if you’re looking at getting a car that has multiple models, make sure you know what model your buying and do the research on that specific model so you don’t end up paying GT-R money for a standard R33 because that would be unfortunate.
3. Service history and mechanical condition
If the car has been well kept and serviced often, the previous owner may have spent a lot of money keeping the car in such good condition. A cost that will be passed down to the next buyer in the asking price. For example someone that has recently done a major service or changed a rather expensive part will more than likely ask for more than someone who has never serviced the car. That’s not to say that if a car is expensive that means it has no problems because it’s been serviced. You should always try and get some form of logbook or service history when buying a car so that you can know if parts such as timing belts, clutches, brakes and tyres have been replaced at the right times to minimize the risk of any nasty surprises. If you’re looking at a car that’s near 100,000/200,000k’s and the owner can’t provide a service history you may want to reconsider making your offer or at least get a mechanic to look it over before making the payment.
4. Registration/pink slip/blue slip/custom number plates
A car that is registered will always be more valuable than an equivalent car that isn’t. Re-registering a car can be a pain in the ass, especially if it has to go over the “pits” which is basically just a very thorough inspection which is required after a car has been unregistered for a certain amount of time. It’s always best to try and buy a car with registration because it means that someone made something of an effort to keep the car on the road. Usually a car that has been left long enough to run out of rego and then not re-registered means that the person didn’t have the money (perhaps to fix issues then as well?) or just didn’t care enough about the car, either way that’s a bit of a red flag to me. While I know that “mint and unthrashed” R32 Skyline that’s been sitting in some dudes farmhouse for 11 months without rego and “only needs a left blinker and new battery” may be appealing for $2500, you can almost guarantee you will be getting yourself into a world of hurt if you want to get it back on the road legally. Of course there’s always the budget track car project which that car may be suited for perfectly because it doesn’t matter if it’s missing an exhaust pipe or a door. On the road however, you don’t want to be dealing with getting pulled over every five minutes for defects, make sure you know what to look for when buying a car that’s out of rego or even try and get it to a mechanic to confirm. I’ll just quickly touch on custom number plates as well because some people will expect extra for a certain number plate, especially if it’s an expensive one which they paid for. Custom plates are somewhat pointless to me but that’s because I’d prefer to put $500 a year into the car rather than spend it on pieces of aluminum that say “BRO OOM” that will most likely get stolen every time I go to the shops. Nevertheless it is something to consider when buying a used car.
These four things are what I think are the key elements in pricing a used car and should be considered accordingly, if a car seems a bit higher in price than that of others on the market, try and find out why. It might just be a loony toon asking for way too much but it might also be because it’s just been registered after having 4 new tyres and a major service which can be proven by the logbook which has been filled out since new. These are all things you will need to fork out for in the future so if you have the money you should definitely go for the best possible car. At the end of the day the initial outlay of the car determines the quality, if you make smart choices and know what to look for that is. There is always the other option of doing what I do which is buying a cheaper car and fixing it up over time, while this has backfired (pun intended) on me before, there is nothing more satisfying to me than grabbing a dodgy car for $2000 and giving it a new lease on life by fixing it up into something special. That only works if you have realistic expectations about buying a second hand car though and I hope this article helps you understand about what I think about that.
Summary
If you take into account all the things about a particular car and compare it to similar cars, with a bit of research you can usually tell if it’s overpriced or not. I always say buy whatever car you will feel good about having broken in the garage because that’s how you know if you really like it or not. So if the car you really want is in a bit worse condition than the car you kind of want, go for the car you really want. You can always try negotiate a bit to leave you some emergency money. In fact, I think most people price their cars with the intention of negotiating but be reasonable and don’t over do it, you may risk offending the seller. When looking for a car, knowing what to expect and knowing what to look for within your budget is extremely valuable.
Do you have anything you want to add? Any experiences with little old ladies handing out mint condition JDM classics for next to nothing? Let me know in the comments!
– L
Photo Credit: Garth Ivers