We’ve looked at tips for car shopping and warned about games dealers play, but what about something more fundamental, like how to know whether a used car lot is legitimate or not? The car can be clean and the customer service stellar, but if a dealer fails on these counts, you could have little recourse if you run into problems down the road.
License. Anyone with inventory, signage and space can call his setup a used car lot. It’s not legit unless there’s a license to back it up, though. And yet we assume everything is in order without thinking twice. With so much on the line, research your state DMV website to confirm status. If nothing else, give them a call to verify.
Consumer websites. The Internet has made opinion sharing exceptionally easy, to be diplomatic. There’s a difference, though, between knee-jerk reactions and experiential feedback. Consumer-oriented websites run the gamut between the two, but there’s always a chance of getting insight from others who’ve dealt with the used car lot in question. In fairness, take the comments with a grain of salt, however glowing or scathing.
Paperwork. It should hopefully start with one of the first things visible on the car: the window sticker. Read it fully for operational disclosure, plus see that it’s dated and signed. And of course, you can’t get far without a car title. You shouldn’t even negotiate a deal if the used car lot doesn’t have it on hand and ready for you to view. Everything should be written clearly by the previous owner and dealer, including mileage and date. No active liens should be present, and if there was one, a lien release should accompany the title confirming the loan was paid in full.
Lender recognition. Dealers and financial institutions do business with each other constantly. Outside of the unlikely event you’re working with either on their first day of operation, your lender will be an excellent resource. They don’t want a customer to lose money on a bad car deal, especially if they have skin in the game as a party in the transaction.