The Right Car For You Could Be Right Next Door

In the past couple of weeks, I've had two calls on my radio show that were remarkably similar, and in both cases, I gave the callers advice that probably surprised them. In fact, I didn't even want them to stay on the phone with me any longer than necessary. I wanted them to go buy the cars they were calling about before somebody else did.

Both callers had an opportunity to buy a vehicle from a neighbor. Both vehicles had been well maintained, garage kept, and the buyers knew the history of the cars and how they had been treated. Even better, the asking prices were below what they could expect to pay for comparable vehicles at a dealership. They called me to make sure they weren't overlooking something and to ask whether I thought they were getting good deals.

My response to both was pretty much the same: HANG UP THIS PHONE AND GO BUY THE CAR!

Now, if you've listened to me for any length of time, you know I don't give that advice lightly. I'm usually the guy telling people to slow down, do their homework, get the vehicle inspected, check the history and make absolutely certain they're buying the right automobile. I still believe in all those things, but I also believe there are times when an opportunity presents itself that is simply too good to pass up, and if you spend too much time analyzing it, somebody else is going to beat you to it.

That's what I want to talk about this week, because some of the best used-car deals you'll ever find aren't sitting on a dealership lot or advertised on one of the big automotive websites. Sometimes they're parked in the garage next door.

Think about what you're getting when you buy a used vehicle from somebody you've known for years. You've probably seen the car coming and going. You know whether the owner takes care of things. You may know that it has been serviced regularly, that it hasn't been in an accident, and that it hasn't been abused. You might even know the exact reason the owner is selling it.

Compare that with shopping for a used vehicle from a stranger. You can get a vehicle-history report, and I strongly recommend doing so, but those reports don't tell you everything. Not every repair or accident gets reported, and a vehicle-history report certainly can't tell you whether somebody changed the oil on time unless those services were recorded. It can't tell you whether the previous owner routinely ignored warning lights or drove the vehicle hard before the engine warmed up.

When you're buying from a neighbor or longtime friend, you may have something that's difficult to put a price on: firsthand knowledge of the vehicle's history.

There's another advantage, and it's a big one. In a private-party transaction, there's an opportunity for both the buyer and seller to come out ahead financially. A dealer has expenses associated with acquiring and selling a used vehicle. There's reconditioning, inspections, advertising, employees, facilities, insurance and the cost of keeping inventory on the lot. Naturally, those expenses have to be covered.

A private seller doesn't have those same expenses. If a dealership would offer your neighbor $18,000 for a vehicle and a comparable one is selling on dealer lots for $23,000, there may be an opportunity for you to buy it for $20,000. The seller gets $2,000 more than the trade-in offer, and you pay $3,000 less than the dealer's asking price. Everybody wins.

Those numbers are just an example, of course, but that's the beauty of a good private-party transaction. There can be room between wholesale and retail value for both people to benefit.

I also think there's something to be said for buying a vehicle that hasn't been passed from one unknown owner to another. A one-owner vehicle with a documented service history, especially one that's been cared for by somebody you trust, can be a real find. If the owner has kept maintenance receipts, followed the manufacturer's service schedule and addressed problems as they arose, that's even better.

And don't overlook the fact that a neighbor may simply want an easy transaction. Some people don't want to advertise a vehicle, answer dozens of phone calls, meet strangers for test drives or deal with the paperwork and uncertainty that can accompany a private sale. They may be perfectly happy to accept a fair price from somebody they know, especially if it means the vehicle will go to a good home.

That's when opportunity knocks.

But before you start knocking on every garage door in the neighborhood, let me offer a few words of caution. Just because you know the seller doesn't automatically make the vehicle a good buy. Good people can own bad cars, and even the most conscientious owner can have a mechanical problem developing that nobody knows about.

You still need to verify the important things. Make sure the title is clear and the person selling the vehicle has the legal right to sell it. If there's an outstanding loan, understand exactly how the lien will be paid off and released before money changes hands. Check the VIN for open safety recalls, review whatever service records are available and make sure the vehicle hasn't suffered damage you don't know about.

I still recommend a pre-purchase inspection by a qualified mechanic, particularly on an older vehicle or one that's no longer covered by a factory warranty. Even a beautifully maintained car can have worn suspension components, aging tires, fluid leaks or other problems that aren't obvious during a short test drive. A good inspection can help you distinguish between normal wear and an expensive problem waiting to happen.

And yes, I would still check the market value. Don't assume you're getting a bargain simply because the seller is a friend or neighbor. Compare the asking price with similar vehicles of the same year, make, model, trim, mileage and condition. Remember that dealer retail prices and private-party values aren't the same thing, and account for any taxes, registration fees or immediate repairs you'll need to pay.

One thing I would be especially careful about is allowing a friendship to replace good business practices. Put the transaction in writing, complete the title transfer properly and follow your state's requirements for registration, taxes and any necessary disclosures. Never assume a handshake is all you need just because you've known somebody for 20 years. Good paperwork protects both parties and helps keep a good relationship from turning into a bad one.

Now, having said all that, I don't want you to miss the larger point. There is a difference between being careful and being so cautious that you talk yourself out of a terrific opportunity.

I've seen people spend weeks researching a vehicle, finally find exactly what they want at an excellent price, and then keep looking because they're convinced something even better must be out there. Sometimes they're right, but many times they discover the car they should have bought is gone, and the next one costs thousands more.

The used-car market doesn't wait for anybody. A desirable, well-maintained vehicle that's priced below comparable alternatives can sell quickly, particularly when the seller isn't asking full retail money. When you find one, you need to be prepared to act.

That doesn't mean skipping the inspection or ignoring warning signs. It means doing your homework ahead of time so you can make a confident decision when the opportunity appears. Know what you're looking for, understand what it's worth, have your financing arranged if necessary and be ready to complete the transaction properly.

There's another point I want to make. Don't become so obsessed with finding the perfect color, every possible option or the exact model year you originally had in mind that you overlook a genuinely exceptional vehicle. If you've been searching for a reliable, well-maintained used SUV and your neighbor offers you one that meets your needs at a terrific price, it might be worth compromising on the color or a feature you can live without.

You can spend a lot of money chasing perfection when a really good automobile is sitting right in front of you.

I spent decades buying and selling vehicles, and I can tell you that the history and condition of a used car often mean more to me than a shiny paint job or an impressive advertisement. A car that's been cared for properly, has a known history and is offered at a fair price is exactly the kind of vehicle I like to see people buy.

That's why those two recent phone calls were so easy for me. The callers had done much of the homework already. They knew the sellers, knew the vehicles, knew how they had been maintained and understood that the prices were attractive. They weren't calling about some mystery vehicle they found online with a suspiciously low asking price. They were calling about legitimate opportunities that had practically landed in their laps.

And sometimes, after you've verified the important details, the smartest thing you can do is stop looking for reasons not to buy.

I love helping people find the right vehicle, and I certainly appreciate every call I get on the radio show. But if you call me with an opportunity like those two callers had, don't be surprised if I cut our conversation a little short.

Because there are times when the best advice I can give you isn't to keep shopping, keep negotiating or keep researching.

It's simply this:

HANG UP THIS PHONE AND GO BUY THE CAR!

Photo: Gleb Usovich/Shutterstock.com.