Roseann Freitas, PR & Communications Manager for the Better Business Bureau Great West & Pacific, joins producer/host Coralie Chun Matayoshi to discuss different options for purchasing a used car, information required to be listed on the vehicle, tyes of warranties, Hawaii law warranty requirements, and tips for buying a used car.

October is when the new car models hit the showroom and while some will swoop in to buy the newest models, others will need to settle for a used car.  Gallup polls rank used car salesmen at the bottom of the list in terms of honesty and ethics, so who can you trust? 

  • Where can people buy a used car?

In Hawaii, dealerships and salespeople selling motor vehicles must be licensed.  Tips on buying a used car: (https://www.bbb.org/article/tips/14088-bbb-tip-buying-a-used-car)

  • New and used car dealers
    Both new and used car dealers can be excellent sources for finding a quality used vehicle. They provide you with carefully inspected vehicles and may include warranties. Check out your dealer’s reputation and reliability first. Ask friends for recommendations, read business profiles at https://www.bbb.org/search and search online for complaints or reviews of the dealer you are considering.

Dealers may also offer a “certified” used car program. These feature vehicles that have been previously leased or traded in. Different dealerships offer different certification programs with different qualifications and details about inspection and other steps they take. You can learn more by contacting your local dealerships.

  • Superstores
    Superstores offer a high-tech, no-haggling way of buying used cars with in-store computers and websites.
  • Car rental agencies
    Car rental companies will often sell cars from their fleets. They often provide the car’s maintenance and repair records and offer limited warranties. Mileage on rental cars is often high on a per-year basis, and the cars may suffer from the wear and tear that comes from the use of a variety of drivers. On the other hand, car rental companies are diligent about the upkeep of the cars in their fleet, so you may find a good deal on a recent model.
  • Banks and loan companies
    Banks and loan companies sometimes sell repossessed cars to pay off defaulted loans. Quality varies from car to car, but because the vehicle is being sold to recover the amount due on a loan, you may get a good deal.
  • Vehicle auctions
    Government, private, and online vehicle auctions are becoming increasingly popular. If you are buying at auction, remember that you may need on-the-spot payment, warranties are rare, and you probably will not be able to take the car for inspection before you buy it.
  • Private Owners
    Private owners sell their used cars through websites, newspaper classifieds, and word-of-mouth. You may find a well-maintained car selling for less money than you would pay a dealer. You may also face less pressure than you would from a dealership salesperson. If you buy a used car from a private owner, ask for the car’s maintenance and repair records. If the seller is the first owner, you should also ask for records of the original purchase. Check the title to make sure the person selling the car is the legal owner.

You also need to be extra careful when dealing with a personal seller, as it may be easier for an individual to be running a con. Fraudulent dealers may disguise themselves as individual sellers and offer cars that are stolen or damaged or have had their odometers rolled back to hide mileage.

  • What information is required to be listed on the vehicle?

The Federal Trade Commission requires dealers to post a Buyer’s Guide for every used car sale (https://www.ftc.gov/business-guidance/resources/dealers-guide-used-car-rule#guide.  Also, sellers who sell more than five used cars in a year must provide the Buyer’s Guide, but banks, financial institutions, and company vehicles sold to employees are exempt from this requirement.  Dealerships must provide a written disclosure of all material mechanical defects known to the dealer, any inspections conducted, and a written warranty on covered major mechanical parts during the warranty period.

  • What kind of warranties are offered?
  • Some used cars might still be under the vehicle’s manufacturer’s warranty.
  • Car sold “as is” is not covered by any warranty. However, Hawaii has requirements for certain used car sales.
  • Factory certified – pre-owned are inspected by the manufacturer and come with their warranty.
  • Dealer certified – pre-owned and certified by the dealership, may not come with manufacturer’s warranty.
  • What warranty requirements does Hawaii law have concerning used cars?

Written warranty must be given by the dealership if the car is less than five years old, costs over $1,500, has between 12,000 to 75,000 miles, is not custom-built or modified for show or racing purposes, and is not inoperable or deemed a total loss.  If the care meets these criteria and the dealership can’t fix the car after a reasonable time, the dealer must refund the money or replace the car.  Warranty periods:  less than 25,000 miles (warranty period is 90 days or 5,000 miles); 25,000 to 49,000 miles (warranty period is 60 days or 3,000 miles); 50,000 to 74,999 miles (warranty period is 30 days or 1,000 miles).

Only specified major mechanical parts are covered (not parts that are cosmetic):  Engine (including all lubricated parts, water pump, fuel pump, manifolds, engine block, cylinder head, rotary engine housings, flywheel gaskets, and seals); Transmission (including the transmission case, internal parts, torque converter, gaskets, and seals, except four-wheel drive vehicles are excluded from coverage as provided for in this paragraph); Drive axle (including front and rear drive axle housings and internal parts, axle shafts, propeller shafts, and universal joints, except four-wheel drive vehicles are excluded from coverage as provided in this paragraph); Brakes (including master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings, and disc brake calipers; Radiator; Steering (including the steering gear housing and all internal parts, power steering pump, valve body, piston, and rack); and Alternator, generator, starter, and ignition system, excluding the battery.

You must provide written notice to the dealership before the warranty expires.

Q.  What are some tips that BBB has for buying a used car? 

Do your homework:

  • Research average retail prices of makes and models and factoring in age and mileage use.
  • Inspect and test drive vehicle.
  • Pay special attention to the odometer – do the math. If an average vehicle in Hawaii accumulates 11,688 miles, check to see if the mileage is excessively high or low and find out why.
  • Ask for maintenance records of the car.
  • Examine the vehicle to see the wear and tear on pedals, tires, seat, etc. and are consistent with the miles listed.
  • Have a mechanic check the vehicle before purchasing.
  • Use the VIN number to research the car’s history at the U.S. Department of Justice’s National Motor Title Information System at https://vehiclehistory.bja.ojp.gov/#:~:text=The%20National%20Motor%20Vehicle%20Title,title%20fraud%20and%20other%20crimes.  For a fee, it lists the title owner, odometer data and some damage history.
  • National Insurance Crime Bureau (NICB) has a free database that includes flood damage and other vehicular information. https://www.nicb.org/vincheck.
  • Get the agreement in writing.
  • Search company at BBB.org
  • Verify licensing:  https://mypvl.dcca.hawaii.gov/public-license-search/

To learn more about this subject, tune into this video podcast.

Disclaimer:  this material is intended for informational purposes only and does not constitute legal advice.  The law varies by jurisdiction and is constantly changing.  For legal advice, you should consult a lawyer that can apply the appropriate law to the facts in your case.