Getting a pre-purchase inspection (PPI) is the most critical AND overlooked step of buying a car. Why are PPIs important, and how can they save you thousands?

You’ve done your car-buying research. You’ve found the model you like, the best model year, and the right price. You also know how much it will be to insure. The test drive goes well, and the seller is willing to let it go for a great price. 

Time to pull the trigger? Pump the brakes. 

What comes next is the most essential step of the car buying process, and ironically, also the most overlooked. Although you’ve done your due diligence to find the right model, there are still hundreds of unknowns about this particular car:

  • Does it have hidden frame damage?
  • Are there signs of rust on the chassis?
  • Did the car miss any recalls? 
  • When were the cabin air filters last replaced?
  • How much life is left on the brake pads? 

And so on. The danger is this: even a car that looks and drives perfectly could be a total lemon underneath. That’s why you should always get a pre-purchase inspection before buying a used car. 

What is a pre-purchase inspection (PPI)? 

Buying A Used Car? Getting A Pre-Purchase Inspection Could Save You Thousands - What is a pre-purchase inspection (PPI)? 

A pre-purchase inspection is when you get an independent mechanic to inspect a car or truck before committing to a purchase. The purpose is to reveal the true condition of the vehicle and its components. 

PPIs are extremely thorough, and a good mechanic will check over 100 points of the car’s condition, including:

  • Electrical systems.
  • Security systems.
  • Engine health.
  • Exhaust.
  • Ride quality.
  • Suspension condition.
  • Onboard computer systems.
  • Hidden damage from floods, road salt, etc.

At the conclusion of the inspection, the mechanic will issue you and the seller a detailed report of what they found. PPIs don’t just point out what’s broken, but also which parts need replacement soon, such as tires, brake rotors, and suspension bushings. 

What do PPIs cost?

PPIs generally cost in the range of $100 to $250, depending on your state and the complexity of a vehicle. Inspecting a Mercedes in California will cost more than inspecting a Toyota in Georgia. 

Where can I get a PPI? 

I have never found a mechanic who would not do a PPI. Generally speaking, they’re a good investment for the mechanic because they often serve to build a new relationship with a customer. 

That being said, cars are becoming more complex. Many green and luxury cars require special tools to accurately diagnose certain systems, such as hybrid powertrains and onboard computers. Not all mechanics will have these tools, but a local dealer typically will (just don’t get a PPI from the seller!). 

Can I perform a PPI myself?

A PPI involves checking hundreds of points and requires special tools and training. Still, you can perform a basic inspection yourself to look for red flags that could save you from needing a PPI in the first place. 

Allstate offers a thorough onsite inspection checklist you can perform without an engineering degree. Bald or mismatched tires, a jerky transmission, and fluids leaking underneath are all strong signs that you should just walk away. 

Why is it important to get a PPI before buying a car? 

Again, a car that looks and drives perfectly might be hiding thousands of dollars of overdue or impending repairs. A beautiful, freshly-waxed Audi A4 may have irreversible frame damage, brake rotors that need to be replaced, or most notoriously, flood damage that cut its lifespan by 90%. 

A pre-purchase inspection is essentially car buyers’ insurance. For $200, it either gives you peace of mind that you’re buying a safe and healthy car, or it gives you a list of needed repairs that you can use to negotiate or simply walk away. 

Frankly speaking, I would recommend that all of my clients get PPIs even if they were $500. 

Isn’t it illegal for a dealer to sell me a bad car? 

Technically speaking, yes. Each state has its own “Lemon Laws” designed to protect consumers from cars that are sold in a condition worse than advertised. 

However, lemon laws vary wildly by state, and the qualifications for a true lemon are ambiguous, providing dealers with gray areas in which to legally defend themselves.  

For example, New York State will only consider your car to be a lemon once you’ve unsuccessfully tried to repair one specific problem four times. Even then, the seller can refuse to issue a refund if they deem the cause to be “abuse, neglect, or unauthorized alteration.” 

Even if you do successfully sue for a lemon purchase, it may take months, even years of court battles, and thousands in attorneys’ fees. Dealers are extremely protective of their reputation and have the experience and resources to defend themselves. 

To summarize, there are very few consumer protection laws in the used car world, and those that exist are nearly impossible to invoke. That’s why the Federal Trade Commission insists that “it’s best to have any used car inspected by an independent mechanic before you buy it.”

“Not only are you allowed to take the car to your mechanic before the sale is final but you should,” writes the American Bar Association

What if I’m buying a new car?

Most factory-new cars are sold with at least three years of warranty coverage, so in the case, something breaks down you’re already covered. They also won’t exhibit the wear and tear that a PPI is designed to catch, so there wouldn’t be much for a mechanic to inspect. 

For those reasons, a PPI is not really necessary for a brand new car. 

What if the car I’m buying is Certified Pre-Owned?

Buying A Used Car? Getting A Pre-Purchase Inspection Could Save You Thousands - What if the car I’m buying is Certified Pre-Owned?

“Certified Pre-Owned” is an unregulated marketing term used to denote “superior” used cars. CPO cars are typically under six years old, have fewer than 80,000 miles on the odometer, and come with extended warranties. Some CPO cars or trucks may even include roadside assistance or free tune-ups. 

Most notably, however, CPO cars have typically passed a “200-point inspection.” Naturally, CPO cars cost around $1,500 more than their used equivalents. Is it worth it? 

Well, minor extras aside, Certified Pre-Owned just means a used car with a basic warranty and a PPI… performed by the seller. Unsurprisingly, a conflict of interest arises when the seller “certifies” a car. 

Plus, as Edmunds puts it, “it may have gone through a 200-point inspection, but that doesn’t mean that 200 parts were replaced.”

I once had a client take a CPO Honda Pilot in for a PPI. The seller was resistant and incredulous that she and I wouldn’t trust “our CPO process.” Within 30 seconds, her mechanic found signs of deep rust all over the chassis. Apparently the dealer’s “178-point inspection” didn’t include the bottom of the car. 

Still, a seller’s “XYZ-point inspection” isn’t entirely useless. You can request a printout of their inspection results and later compare them to your independent PPI results. Any discrepancies will serve as powerful ammunition for negotiation. 

What if the car I’m buying is known to be extremely reliable? 

Reliable cars fail. Toyotas built between 2007 and 2009 had so many issues with excessive oil consumption that consumers filed a class-action lawsuit against the company in 2014. Although the case was voluntarily dismissed and Toyotas have been ruggedly reliable since, the episode serves to remind car buyers that no used car is perfect. 

Plus, reliability doesn’t mean that parts last forever. My Mazda Miata is widely considered to be one of the most reliable sports cars of all time. Even still, my PPI revealed that it was overdue for an oil change and needed new brakes. 

To recap, 100% of used and certified pre-owned cars should have a PPI before you consider a purchase. There are no exceptions.

How to get a pre-purchase inspection

Buying A Used Car? Getting A Pre-Purchase Inspection Could Save You Thousands - How to get a pre-purchase inspection

Once you’ve found a vehicle that you like, tell the seller that you’d like to have the car inspected by an outside mechanic. This is usually best done over the phone since there will be questions and logistics to iron out.

After you notify the seller that you’d like to have a PPI performed, one of four things will happen:

  • The seller will be amenable to it and will even coordinate delivery to your mechanic so you can both inspect the car (keep in mind that the buyer always pays for PPI). This is an uncommon, best-case scenario.
  • The seller will be amenable to a PPI, but say that it must be performed onsite at their lot, typically for their own convenience. Tell them that you will not purchase a vehicle without a PPI by your chosen mechanic offsite, and you’re willing to take the necessary steps to get it there. If they’re still hesitant, you can either work with an onsite PPI service or walk away.
  • The seller will tell you that you need to purchase the car to have it inspected, but that you have seven or 30 days to return the car for a full refund. Again, insist that you will not purchase a car without a PPI, and the seller may give in to keep the sale alive. 

If they still refuse, and you really want the car, secure the terms of the refund and a copy of the seller’s quality assurance checklist. Then, if your mechanic finds any discrepancies, you should return the car and ask for them to make repairs and bring it up to the advertised condition. If they refuse, return the vehicle.

The seller will act defensively and say that a PPI is not necessary or allowed. This either means that they’re hiding something or that they’re unprofessional. In either case, walk away. 

Thankfully, upon polite insistence, most reputable sellers and dealers will not get in the way of you getting a PPI. After all, they typically get a copy of the results too so they can learn which cars need help (and which of their mechanics might be slacking off). 

Summary

There are very few laws protecting you from buying a car that secretly needs work, but thankfully, a pre-purchase inspection aka “lemon insurance” is cheap. 

Unless you’re buying a factory-new car, you should always get a PPI done on a used car you’re close to purchasing. Doing so could save you thousands in repairs, give you ammunition to negotiate a lower price, or save you from a clunker.

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About the author

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Chris helps people under 30 build better lives. In addition to publishing financial advice, he speaks to college students on the topics of happiness and leadership through CAMPUSPEAK.

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