The Most Common Mistakes People Ask About How To Buy A Used Car From The OwnerNovember 12, 2021
Buying used cars can be a great way to save money, but one must do it carefully. One doesn’t want to end up in a situation where the car has many problems, the seller doesn’t have good intentions, or anything else goes wrong. This article will give tips for avoiding these issues and help answer the widely asked question: how to buy a used car from the owner.
Look at the car, not the owner
If one is buying a used car, don’t look at the owner. Look at the car. Why is one buying the car? Because one wants to, presumably, drive it around. Driving around is what a car does. And if one wants to drive it around, it won’t do any good to look at the owner.
On the other hand, if the owner is rich and drives around in an expensive car, it makes him look expensive. And in general, rich people like their cars to look expensive. And when one is shopping for a car, one will look mainly at cars that other people like.
This is called the halo effect because, in the cosmology of the ancient Greeks, the sun’s halo was a sign of divinity. In modern economics, the halo effect means that among people who like a particular thing, people who like other things tend to like it, too. So, if one is interested in buying a car, don’t look at the owner. Look at the car. If the car looks too expensive, then it probably is. And if it is too expensive, one might want to look for something else.
On the other hand, if the car looks too cheap, then it probably isn’t. And if it isn’t too cheap, one might want to look for something else. In general, then, if one looks around long enough, one should find a car one likes. If it’s something else, then ask them why. Then ask what one would be doing if one weren’t trying to impress people, save money, or whatever. And also ask whether one would be doing it better if one were.
Not all used cars are the same.
A used car is a car one previously owned. Most people think of used cars as vehicles bought, driven for a short time, and then sold to somebody else. But used-car buyers make two major mistakes. First, they assume that all used vehicles have the same value. Second, they assume that all used vehicles have the same utility. Some used vehicles have substantially different utilities than new ones.
If one buys a used car, one should first figure out what utility the car has to one personally and then select that car based not on its price but on how much utility it has to one personally. For example, an old Honda Civic has substantially lower utility to me than a new Honda Civic, even though the new Civic costs $2,000 more. Suppose one wants a car that’s comfortable, reliable, cheap to repair, and simple to fix. The Honda Fit might be a good choice, but the Honda Civic is not. Because one doesn’t need or want a car with the technology of a jet fighter, the Honda Fit is the wrong car for me.