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Buyer's Alert: Was Your Used Car Recalled & Never Fixed?

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Used car salesman

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Buying a used car can be a very smart move. In fact, financial advisors like Suze Orman claim it's one of the best things you can do with your money.

But compared to buying new, purchasing a used car carries added risks. Case in point: Carfax found that over 2.7 million of the used cars advertised online in 2011 had been recalled for  problems that were never fixed. We're guessing that many of those vehicles were being sold by individual owners, but some invariably came from dealerships, too.

The situation was worst in California, Florida, and Texas. Over 100,000 vehicles for sale in each of those states had been recalled but not repaired. Yikes.

Of course, it bears mentioning that Carfax has a not-so-hidden agenda here: Carfax sells used-car reports that list all related recalls, as well as accidents and repairs tied to the car's VIN. In other words, it only makes sens that Carfax would want to remind shoppers about the hidden dangers of used vehicles, since it's those shoppers that keep the company afloat.

Tips for used-car buyers

Orman is right: a used car can be a very smart investment. However, buying one requires more diligence and research than if you were buying new.

1. Before setting out on your first test drive, visit the National Highway Traffic Safety Administration's website. There, you can search for recalls on your prospective ride and even check to see if consumers have complained about it. Those complaints might not turn into a full-scale recall, but it's always good to hear about others' experiences with a particular vehicle.

2. When you've found the right car for you, buy it through a dealership, if you can -- but not just any old dealer you find on the side of the road. Try to purchase it from an authorized dealer who offers "certified" used vehicles. Should you have a problem with the vehicle, you can always go back to the shop -- and chances are good that they'll still be in business.

3. Whether you're buying from a dealer or an individual, do your homework: ask for a report on the vehicle. The owner should be willing to provide one, either from Carfax or from a similar service like AutoCheck. If he's not, he's either (a) a cheapskate or (b) hiding something. Neither bodes well for the car's condition.

4. Before you sign on the dotted line, take the car to a garage and have them give it the once-over. Most garages offer this service nowadays -- some for free, some for a fee. Either way, it's worth your time and money.

Last but not least: remember that used car prices are higher than normal now, but they should begin slipping downward by June. If you're in the market for a used car, use the next couple of months to do your research so you can spring into action once summer arrives.

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