There are four basic sources of used cars, each with advantages and drawbacks: new car dealers, used car dealers, rental car companies and private individuals. While there may be slight variations on these, you are probably going to go to one of these three places to make your purchase.

Buying from a new car dealer.
A new car dealer nearly always has a used car lot. There the dealers sells off his better quality trade-ins. The poorer ones will usually be "wholesaled"--sold to independent used car dealers for resale or disposed of at used car auctions. Some of the more aggressive new car dealers may also buy good used cars at auctions to fill out his used car inventory with desirable models. There are many advantages to buying from a new car dealer:

• You can be fairly comfortable that the car will be in good shape.
• You can usually get a good warranty on the car from the dealer.
• You can be fairly sure of responsive treatment if something goes wrong, because the dealer has a reputation to uphold.
  

There is, however, one important drawback to buying from a new car dealer: You will probably pay a premium price for what you buy. That's partly because the dealer has a higher overhead (staff, facilities, etc.), and partly because he knows he's selling and backing higher quality cars that can command higher prices. On the other hand, in used cars as in most everything else, you generally get what you pay for. Higher quality usually costs more.

Buying from a new car dealer doesn't mean you can let your guard down, though. Even a new car dealer can be fooled with a trade-in, and could have a lemon on his lot that he honestly believes to be a cream puff. And, as we have noted, some of these dealers sell used vehicles they purchased at the auto auctions, which means that the car is to a certain extent an unknown quantity to them, as well, so you still should always check the car carefully.

Buying from a used car dealer.
The true independent used car dealers sell cars that are usually a little older than those the new car dealers offer. Iin fact, they frequently buy the older cars that new dealers take in trade but choose not to sell themselves. Many of the better independents offer some of the same services as new dealers: bank financing, some type of warranty coverage and, in some cases, even some repair facilities.

You really need to watch out for the "sleaze merchants." These dealers tend to sell poor quality cars to people who don't have a lot of money to spend or who are poor credit risks. Some of these dealers work right at the fringe of the law, sometimes trading in stolen cars that they may or may not know are "hot," sometimes misrepresenting that they offer a "warranty" that really doesn't cost them anything (more on that in used car warranties). Our advice is to steer away from any from any dealers offering to finance people with bad credit or no credit and who advertise "weekly payments" in big letters on the windshields. The cars these guys sell are usually one step away from the junkyard and may have trouble passing a state inspection, a police "hot sheet," or another car on the road. (Speaking of state inspections, some states require inspections for used cars before they can be officially titled and put on the road. If a seller will not guarantee--as a bare minimum--that his cars will pass these inspections or be brought up to standard at no charge to the purchaser, look elsewhere for a car.)

Buying from the rental car comapnies.
One of the best places to pick up a good quality late model used car is the sales outlet of one of the major car rental companies, such as Hertz or Avis. The retired fleet cars they sell are normally one or two years old and, while high in mileage, have usually been reconditioned to look like new. Another advantage is that they are in most cases offered with an unusually comprehensive warranty, virtually akin to a new car. The rental company lots also contain a high percentage of the most popular models. Indeed, they buy them that way to maximize resale value. Of course, because these cars are in such good shape, are the most popular models and are warranted so well, they are often sold for a bit higher price than you would expect--especially considering that they are high mileage and have been driven by numerous people who knew it wasn't their car. This is, in fact, the reason most people shy away from shopping the rental car companies. The rental companies, on the other hand, contend that their cars are more meticulously maintained than the typical used car, are therefore likely to be in better shape and they back their words with comprehensive warranties.

Buying from a private seller.
Probably the biggest source of used cars is the private seller. This is also the source that offers both the greatest chance of a good buy and greatest risk of getting stung. A private individual usually does not warrant the condition of the car. In legalese, private sales are normally made "as is." In other words, once the car changes hands, the seller's legal responsibility ends. Sometimes a privately sold used car will carry the balance of a warranty (from a new car manufacture or a used car dealer) that is transferable. Be meticulous about ascertaining the coverage and restrictions of any such warranties. Some are transferrable and some are not. Nor is a private seller, in most states, under any legal obligation to disclose anything wrong with the car, or liable for anything should the car break, even if it's still within sight of his house after you've bought it. There are two exceptions. If you should discover--and can prove--that the seller tampered with the odometer, he can be prosecuted for violating federal law. If you can prove that the seller willfully misrepresented the considtion of the car, the seller can possibly be held liable for damages or even forced to rescind the sale. In either case, however, you would be involved in a legal quagmire that would consume time and money. Some states have lemon laws that would cover private sales; you should call your local consumer affairs office to determine what protection you have in your locality. In the case of a private sale, however, it is doubly important to inspect the car prior to purchase, including an examination by an independent mechanic of your choosing. A seller unwilling to let you do that should be avoided.

Despite the negatives, buying from an individual offers perhaps the best opportunity to get a good deal, because the individual may be more willing to negotiate price. Private sales usually command less money than dealer sales, for all of the reasons noted above. Where a dealer may have a certain "floor" price, based on how much capital he has invested, the private individual may be open to a very low offer. One word of caution; These days, some dealers post ads in the papers that seem like private citizen sales, and the cars may even be shown at a private home to enhance the illusion. Many states have laws prohibiting these types of activity, but you should always be on the look-out for deceptions of this sort.

Summary.
In summation, where you buy your used car will depend on the type of car you want, how much you want to spend, and your spirit of adventure and willingness to gamble. Remember, there are good cars available from every source--even the sleaze merchants--if you know what to look out for and are prepared to take appropriate precautions.