How to Buy Used Cars – A Simple But Comprehensive Guide
Buying used cars or second-hand cars will be more challenging than buying brand new vehicles, but the rewards can also be significant. The biggest advantage is price. Cars depreciate fastest during their first few years, so one year old used cars could be as much as 25% cheaper than their siblings straight out of the dealership, even though the cars haven't refreshed yet – meaning, you’d get exactly the same features as if you were buying brand-new. With this guide, Automart.PH arms you with knowledge and tips to make sure you get your dream used car or pre-owned car while also avoiding the most common risks and pitfalls. Read this guide to buying a used car before scheduling your test-drives or depositing your down.
How to Buy a Used Car
There's a lot to think about and consider first before even going to the used car lot.
Set your expectations and mindset when buying used cars
Buying used cars, as mentioned, will not be as simple as buying brand-new. Knowing this, and setting your expectations accordingly could spell the difference between being extremely happy or being disappointed with your purchased used car. Think about it – you won’t go into a tiangge thinking you’ll buy an original, brand new italian designer dress, but you would be extremely happy buying a rare, used bauble or antique furniture. The same philosophy applies for used cars.
Before you even do your research, online or offline, it’s a worthwhile first step to set the mindset that: “You’re not buying a brand new, blemish free car. You’re buying a used car. Second-hand. Segunda mano.”
The term “like new” is a myth. The moment the first owner of the car drives it out of the dealership, life happens. The car’s engine combusts the fuel. The oil, brake fluid, automatic transmission fluid, coolant, all start churning around doing what they’re supposed to do, and they get spent. Tires hit the pavement, brake pads get used up. Someone with a heavy trolley in the supermarket parking lot was careless? There’s a small scratch on the fender. Pebble on the highway? Dimples on the used car, through no fault of the owner. You get the picture. The only time that the car is ever “like new” is when it is new.
Choose your car type
Different people will need different things from a car. Cars vary in shapes and sizes nowadays. Over the past few decades, the distinctions have become even more blurred, with the introduction of new car sub-categories, like crossovers (cross between sedans and SUVs) like the Subaru XV or Toyota Corolla Cross, or the sub-compact SUVs like the Honda HR-V. There isn’t a right or wrong choice here – an AUV, such as a Toyota Innova could be the perfect fit for people with a modest budget and who regularly ferry a large family or have a business that occasionally requires hauling of inventory. A subcompact sedan is good for a smaller family that needs to navigate the smaller eskinitas of Manila and needs just enough trunk space for groceries or small bags, strollers, etc. As a bonus, the fuel efficiencies on these things are now pretty good too. Look to the Toyota Wigo for the ultimate in no-frills, cheap and cheerful car. There are a lot of different vehicle sizes to choose from too – you’ve got the very big Hyundai Starex’s or the very small and fuel-efficient Toyota Wigos and hundreds of used cars in between.
Pick a car you need most of the time. We recognize that your needs may change occasionally, but don’t buy the big AUV for your once-a-year family road trip when you really most need a daily driver to ferry one person to and from work. All the initial cost, fuel and maintenance savings you get from buying the smaller car would allow you to rent that comfortable van once a year, with more money left in the bank.
Determine your budget
One major selling point of buying used is that you’ve got a lot more choices! The older the used car, the cheaper it is, so it’s possible that your X hundred thousand pesos can buy you a 2-year old Vios, or a 6 year old Accord, or a 10 year old Mercedes. That opens up your choices to a whole slew of possibilities not available when purchasing a brand new car where you’re generally more limited in brand and model choices.
That said, know that most used cars (with exceptions) have no warranty anymore, so do factor in all costs as soon as you buy it.
Budget for initial used car purchase
This is the easiest to know, and most in-your-face: how much will you pay the seller. That said, don’t forget to bargain – there may be a few thousand Pesos worth of savings still there, especially if the seller is highly incentivized to sell. Incidentally, at Automart.PH we practice lowest-prices always. This means, there's no need to bargain anymore since the prices we quote are always the lowest possible pricing.
Budget for maintenance and consumables
This is probably one of the bigger risks when buying a used car – it’s a bit more likely to break than a new car, and there’s no more warranty to shield you from expenses. Make sure you have some money tucked away, or you’ll have a very expensive ornament in your driveway.
Generally speaking, Asian used cars have cheaper and more readily available parts and services, especially Toyota. European used cars are generally more expensive to maintain both parts, labor and time-wise. Some European parts are, believe it or not, ten times more expensive than the same part for a Japanese car. Also remember that if they’re old enough, they become harder to find parts and items for.
So you’ve got some money tucked away in case the car breaks down, but don’t forget that vehicles also need regular maintenance, and the bigger the car, the more expensive it is to maintain. Tires on an SUV can easily be 2-3x the price on a small sedan. The brake pads to get those things to stop are also more expensive. An 8 cylinder engine will consume about twice the oil every time you do your regular change oil.
Budget for fuel
Car manufacturers have done wonders in improving fuel efficiency in the past few decades, thanks in part to very stringent emissions laws in other countries, like the progressive Euro standards (now at Euro 6). Fuel efficiency and emissions are of course, highly correlated. As a general rule, an older car with the same brand and model will consume more fuel than its newer counterpart. Manufacturers are putting smaller engines in cars and adding turbo, adding variable cylinder usage tech, putting lighter materials, etc., because the pressure is on them to produce fuel efficient cars.
Be sure to do your calculations, to see how much you’ll really be saving after factoring in fuel consumptions for cars.
Remember also that diesel vehicles generally save you money on fuel and that more expensive cars, need higher octane levels to run smoothly (and you should put in the recommended minimum octane level!).
Budget for registration and other paperwork
Perhaps lastly, the bigger and more expensive the car when it was bought brand new, the more expensive their yearly registration tends to be, because it’s based on the size of the engine. So yes, that same priced 10 year old V12 Mercedes SUV will cost you more yearly than the 5 year old 4 cylinder Toyota subcompact when it comes to registration renewal.
To give you an idea, here’s how much passenger cars and SUVs cost to register yearly:
- Light – Gross Vehicle Weight (GVW) <1600kg – P1,600
- Medium – GVW = 1,601 kg – 2,300 kg – P3,600
- Heavy – GVW >2,301 kg – P8,000
- SUV – GVW >2,700 kg – P2,300
- SUV – GVW 2,701 kg – 4,500 kg – P2,300 + (0.46 x GVW in excess of 2,700 kg)
For more information, please see the LTO’s Motor Vehicle Registration Page.
Assess your needs and wants
Let’s face it, cars are always going to be a mix of needs and wants. You may “need” a vehicle to get from point A to B, but you may “want” the car’s badge to have the three letters B, M and W because it promises “joy” in driving. At the end of the day, no one really needs a V12 engine that gets to 100kph in (place your magic number here) seconds, but everyone knows a few dozen people who’d want it. We don’t judge. The important thing is that you can be happy with the decision you make!
There really isn’t a one-size-fits-all recommendation here, but let’s examine some common features that differentiate one car–or even one model–from another: safety, transmission type, trim level, diesel vs. gas, entertainment and interior amenities.
First, it’s fair to say that the safety standards by which cars are judged today are very high, so any car you’d buy now will have tons of safety features built-in. Beyond that though, it becomes your and your loved ones’ decision to answer the question: “how safe is safe?” For this guide, we’ll explain a few of the most common safety features that could swing the vote for or against a car.
Are there ABS or Anti-lock Brake System? These are used for when you need to brake quickly while steering your car to safety. Without ABS, your wheels would just lock-up when you brake hard, making your car skid and prevent you from steering it to safety. ABS applies and releases the brakes in rapid succession to prevent the wheel from locking up and allowing you to steer and brake better.
Are there Airbags? These will rapidly inflate once the car detects impact, cushioning the blow. It’s a good idea to check how many airbags a car has, and where they’re located.
Adaptive Cruise Control – While standard cruise control maintains a fixed speed, Adaptive Cruise Control can be set to automatically maintain a certain distance from the car in front. If the car you're following slows down, so will you. While this sounds purely like a convenience feature, it helps a lot when you get distracted, and also lessens driver fatigue.
Autonomous Emergency Braking – automatically applies the brakes when the system detects an impending collision. These aren't made equal, with some versions able to detect motorcycles and pedestrians.
Lane Departure Assist – automatically nudges the car back into lane when it detects that the car is swaying away. This is a relatively new tech, but an increasing number of vehicles models are coming with it as an option.
ISOFIX – If you have a baby and you’ve ever tried installing a car seat using the seatbelt, you’ll want ISOFIX. It’s safer than the more common seatbelt method, and easier to install. They’re just metal rods hidden in the backseat of your car, and you would (easily) clip on ISOFIX compliant car seats to them.
Back-up camera and back-up sensors – This is partly safety and partly convenience – after all, you probably won’t bump into something or someone if you can easily see them with your camera. An improved version of this technology, often called the 360 degree view camera is also increasing in popularity.
Automatic vs Manual Transmission
Car purists, race car drivers or those that really want to save on maintenance costs will want manual cars. If you aren’t any of the above, an automatic transmission car is probably better to navigate Philippine traffic.
Do also note that modern automatic transmissions are now more fuel efficient and often shift faster than manual transmissions, so the old "mabagal at matakaw ang automatic" saying, no longer applies.
Most car models are sold with multiple different trims, from basic to luxurious or sporty models. The difference in features and functionality (and price) can be quite stark, so make sure you do your research well. With some cars, the base model won’t have ABS and only one or two airbags, while the higher end trim will have ABS and up to seven to ten airbags, for an extra few hundred thousand more. Some cars will give you a choice of different engines. Make sure that you research which exact trim you are buying.
Gasoline vs Diesel
These are the two most common fuel types in the Philippines and they’ll have their pros and cons. Diesel engine vehicles are generally more expensive out of the dealership than their gasoline counterparts. They’re also generally more expensive to maintain. They make up for it in better cost per kilometer traveled (diesel prices are now at par with gasoline, but one liter of it generally gets you farther). Diesel cars vibrate more than gasoline, which some people dislike. Gasoline cars generally accelerate faster but diesels can pull heavier. Diesel technology has improved a lot over the years though, with most having a turbo to speed up the car.
When you’re stuck in traffic for hours on end in one of the Philippines’ biggest cities, you learn to appreciate good entertainment – good sounding speakers, big screens, Apple CarPlay and Android Auto, bluetooth connectivity, and AUX playback are just some of the things you might want to look for in an entertainment system.
Fabric vs Leather seats
Both these options have their supporters and detractors. Pro-leather folks say it’s easier to clean, feels better to the touch and more luxurious. Anti-leather folks will complain about how hot they get in the Philippine summers, how expensive they are or how they don’t age very well.
Do basic internet research
Speaking from experience, unfortunately, there are some used car dealers in the Philippines that don’t really know what they’re selling and so you might leave a dealership knowing as little about the car as when you came in (except maybe to know that it’s there for sale).
If you really want to know the features and specifications of a car, it’s probably more effective and efficient to sit your butt on a chair, grab a coffee and look for the information online.
Automart.PH is a great source of pricing, features and review information.
You can shortlist the cars that you want by using the comparison tool and know what you’re looking for, even before stepping out of the house.
Know the questions to ask when buying second hand
Go past the typical classified ad motherhood statements like “lady-driven”, “casa-maintained”, “weekend car”. It’s very easy to dig a bit deeper, and the exercise will provide a lot of useful information. The proper questions can reveal a lot about the car you're looking at. Just ask and look because understanding how the used car was used by the former owner/s will give you a lot of insight into its present condition. Here are some useful questions:
Who were the main users of the vehicle? What was the vehicle used for?
Was the car used as TNVS (Grab or Uber), taxi, work shuttle, or for personal use only? Was it used by a medrep or sales agent to go from hospital to hospital all around the country, or just home to office and back? Was it used to haul wares and/or other heavy items? These will give you insight into how the car likely aged.
Was it a family car?
Kids are wonderful and a joy to have – but trust us, they increase the likelihood of food stains and smells 10x, especially in the back seat fabric. Also, don’t forget that kids need to get potty trained, and sometimes “accidents” happen, especially in cars stuck in traffic. If the car has seat covers, it’s a good idea to remove them to check the upholstery the car came in.
Did the owners have pets?
Pets will have a lot of the same watchouts as the kids above, except maybe with more hair.
Does the former owner smoke inside the car?
Cigarette smells are pretty hard to remove, even with (expensive) detailing. Cigarette burns on the door, seat or ceiling are also par for the course, more often than not.
Where was the car normally parked?
This will immediately tell you how much exposure to the sun the car has while idle. If the car is driven to and from work, is the car parked in the basement (where there is no sunlight), or in an open parking area with no trees? Over a few days, sun exposure doesn’t matter to a used car since they are built to withstand sunlight, but after 4 years, 1460 days of sunlight exposure, it will have an effect on the fading of the paint and the brittleness of the plastics especially the dashboard, headlights/ tail lights, etc. Some cars that were built for colder climates will also see their upholstery noticeably peeling.
Cars parked under trees should also be inspected. Falling branches, tree sap, and bird droppings greatly damage a car's paint. This could be costly to repair/repaint.
Pro-tip: Answers to the above shouldn’t immediately stop you from considering the car further. Sometimes it’s a good idea to consider the cost to repair these things or add missing features, then factor that into the price by asking for a discount. For example, if a good cleaning and detailing to remove/minimize the smell or stains, costs P7,000 and the owner is willing to give a discount for that amount, it could push the deal further along.
Get the service records
This is where you can easily separate the wheat from the chaff. Anyone who tells you that their used car is only ever “casa maintained” should be able to prove it with records, receipts and dates of servicing. Be wary of sellers telling you that they’ve “thrown away the records” or they’ll send it “to follow”.
Speaking of “casa-maintained”, while it’s certainly a good thing, it isn’t absolutely necessary for a well-maintained used car. In an extreme example, a car that’s had its oil religiously changed as instructed in the car manual (normally every 5,000 km, non-synthetic oil) at the streetside talyer is probably in better shape than a similar one that went to the casa once in 30,000km. One thing going for you with real “casa-maintained” cars is that the parts in the car are likely genuine, OEM parts rather than replacement parts.
In sum, ask for the records – receipts and all – if the seller has it. Not having service records is probably not enough reason to abandon the used car entirely, but you probably should not pay a premium for a used car without them.
Know how the mileage was accumulated
The odometer (mileage) reading of a car is a good but flawed data point. It’s best to dig a bit deeper: how were the kilometers hit? How did that 1-year old car rack up 30,000km that quickly? Does the owner live in Batangas and work in Makati? That tells you the kilometers are “highway kilometers”: the used car likely uses all its gears, brakes are gently applied, etc. Highway kilometers are better than “City kilometers” or when the kilometers were racked up because the car was a rideshare spending 12 hours daily in start-stop Metro Manila traffic, probably getting only as high as 3rd gear, rarely.
Ensure there’s correct paperwork
Papers, paperwork, notarized documents – these are all part and parcel of buying and selling used cars. It’s not that difficult to comply, but not complying could mean a lot of headaches in the future. Here are all the relevant forms you need to ask for.
Unencumbered Original Certificate of Registration
In simple terms, unencumbered means that the loans on the used car have been paid, and so the seller is free to sell the used cars to you. To know that it’s unencumbered, the CR will not have the word “encumbered” in it.
If the word “encumbered” is on it, it means that the named bank is still owed money for the purchase of the used car or used cars. This isn’t a deal breaker (and in fact could be the reason why the car is being sold), but make sure you make appropriate arrangements with the bank and not just the seller. Learn more about fixing or unencumbering a car here: Fix Encumbered Cars.
Registration Official Receipt
Do ask the seller for the Registration OR to make sure that the car is registered. Of course, make sure that the OR is current by checking the date on the OR. It isn't the end of the world if it's not registered, just be aware that you'll be liable for the fees and penalties if you choose to buy this car and that can add up depending on how long ago it was last registered.
Deed of Sale
When you pay for the car, ensure that you are given three copies of a deed of absolute sale so you have proof that you bought the car from its current owner. Ensure that these deeds have:
- the date of sale
- sale price of vehicle
- vehicle year, brand and model
- vehicle plate number/conduction sticker number
- name and contact info of buyer and seller
- attached two valid IDs of the seller
Here's a Sample Deed of Absolute Sale for Cars or DOAS to make your life easier when buying or selling a car.
Ensure that the plate number is attached to the car when you buy it. In the Philippines, cars don’t change plate numbers when they are sold (as opposed to some other countries where the seller is obligated to return their plates to their version of the LTO).
HPG Motor Vehicle Clearance
This is a clearance form by the PNP Highway Patrol Group certifying that the used cars weren't involved in crimes, and were obtained legally by the current owner. It makes perfect sense to ensure that the used cars are “safe”, so be sure to ask for this.
Maintenance and Repair Records
Granted, some people aren’t very good at record keeping, but if this is available, best ask for it. See above for more information
Insurance Company Endorsement
Much like transferring the title of the used cars, it’d make sense to transfer insurance of the car from seller to you. Make sure the seller has these documents ready.
Finally, if you want to purchase a used car for an affordable price, but don't want to go through the uncertainties listed above, then Automart Certified Vehicles are the way to go.
These vehicles have undergone a 176-point checklist to restore them to the mythical "like-new" condition. They also come with a 1 year, or 10,000 Km warranty, and a 5-day, money back guarantee.
If you found this article on buying used cars useful, please do share it on Facebook, email, smoke signals, your blog or just by telling them to go to Automart.PH. Happy buying! Do check back often!