What is a PPI for a Used Car?
A pre-purchase inspection or PPI is recommended for any new car purchase. The only time that I would forgo a PPI is if the car is brand new or CPO'd, where you would be covered by an extended warranty.
In fact, according to the National Highway Traffic Safety Administration (NHTSA), approximately 40 percent of cars sold in America today are bought without ever going through a pre-purchase inspection.
My general rule of thumb is that if a car's price is more than $10,000, then it would merit a professional PPI. Anything that is priced under $10,000, I'm willing to roll the dice on it after I have a chance to personally test drive the car, scan the car using an OBD scanner and speak with the owner.
If it's a car that you are financing for more that $10,000 and without a warranty, I definitely would recommend a PPI. Most sellers would be ok if you made the process as easy for them to do.
During a PPI, the auto shop or dealership would run a full gamut of diagnostics as well as look at the engine and undercarriage for any issues. In my case, I had my PPI done at my local Mercedes Benz dealership. This was to ensure that all possible repairs would be identified.
In this article, we will cover the most common questions people ask about PPI and how best to approach the seller.
Just a quick note, a PPI is different from a DMV basic inspection like an annual car inspection which is required for the state.
What Is a Pre-Purchase Car Inspection?
A car pre-purchase inspection is a comprehensive look at how well a vehicle runs. You want to make sure it doesn't cost you money later. This is an investment to avoid possible headaches later. The technician will provide a detailed assessment of the condition of the car.
Before you order a PPI, you should have already reviewed the vehicle history report and seen the car. If the history report looks good and the car seems like a decent buy, a PPI will help uncover any other potential issues. They will scan the car, put it on a lift and check for leaks. It is a very comprehensive vehicle inspection that offers some protection from hidden damage or repairs.
The pre-purchase vehicle inspection should take a day or so. When I scouted around, some shops said it would take a few hours while the dealership informed me that it would take a day or so.
Not all PPIs are the same, you will need to speak to the auto shop and ask them if they offer PPI services.
How to Choose an Auto Shop for a PPI?
There are several factors to take into account when choosing a pre-purchase car inspection shop. Here are some questions you should ask yourself about every one.
1. How long has the company been around?
2. What do the customer reviews say?
3. What do they charge per PPI?
4. Do they specialize with the manufacturer or handle all types of brands?
5. How long does the PPI take?
When shopping around for a PPI, do a quick search for PPI "name brand"? Depending on your location, you might be better off with an indie shop. I'm located in a metropolitan area and I was able to select a dealership.
I would typically have my local indie shop review the car but cost wise, the difference in PPI prices was only $100+ or so. Thus I opted for a dealership to perform the PPI.
A PPI is a good way to make sure your car is running smoothly before buying it. But what exactly goes into one? There are many different types of inspections out there, and some are better than others. Here’s what you need to know about a PPI.
Various Aspects of a PPI
There are several different areas looked at during a PPIs, including:
- Visual inspection – During a visual inspection, mechanics look over the exterior of the car, checking for dents, scratches, rust, etc. This type of inspection usually takes less than 15 minutes.
- Mechanical inspection – Mechanics take a closer look inside the car, looking for problems that aren’t visible during a visual inspection. These include things like fluid leaks, broken parts, worn tires, faulty wiring, etc. Depending on the situation, mechanical inspections can last anywhere from 30 minutes to several hours.
- Road Test - The technician should road test the car to get a better idea on how the car accelerates, drives, stops and steers. This will help reveal any issues and safety conditions that are not covered under the Visual or mechanical inspection.
How much does a PPI inspection cost, and who usually pays?
A safety inspection costs money, and buyers should cover the costs. Note, I would only move forward with a PPI if you already agreed on the price and are 85% sure that you are willing to purchase the vehicle.
The agreed price stipulates that the car will come back with a clean PPI.
You can shop around for prices but expect to pay from $150 - $500 for vehicles. However, you might experience upwards of $1,000+ if you have a high performance exotic car but shop around.
Buyers should always ask what type of inspection is required before signing off on an agreement.
Indie Shop vs Dealership PPI
An independent auto repair shop or dealership can offer a PPI. They typically charge per hour.
As of 2022, the average rate in my area in Northern NJ is $125 per hour. The dealership quoted me 3 hours where it would end up at $400 with taxes.
The indie shop quoted $275 - $300. I opted for the dealership since it's an official technician but I am confident that an indie shop can do the same and if not better job of reviewing the report.
Pre-Purchase Inspection Report
The inspection report I received was ok. Some companies assign a mobile inspector like LemonSquad.com to offer written reports with images. However, I opted for my local Mercedes Benz dealership. They provided me updates via SMS and text.
Overall, they found some suspension issues and overall clean bill of health. This helped put my mind at rest for a non-CPO Mercedes Benz I just purchased. I was provided a video report of the technician's findings. There was no major mechanical issue ,frame damage, or flood damage.
Other shops would have provided a written report but this was fine since I was able to get first hand visuals on the findings.
Like I said, pre-purchase inspection is an essential step in buying any type of vehicle over $10,000. It helps protect yourself against potential problems down the road.
Ask yourself, how important is your peace of mind?
How to Negotiate the Price after the PPI Report
Negotiating the price of a vehicle is a complex process. You want to make sure you're getting what you paid for and at a fair price.
At this stage, you should have already agreed to the price of the car. If the car was agreed at $50,000 but the PPI finds issues with the suspension rack, and the cost to repair is $800, then you can ask the seller to reduce the price to cover these repairs or have them repaired for the agreed price.
In fact, if you are already saving money and negotiating the price, it's really up to you to negotiate the price. If the seller doesn't accept that, perhaps you can split the cost for $400 to cover half of the repair.
Either way, you want to be understanding and not negotiate too hard and lose the sale.
If you do end up walking away, you are only out the cost of the PPI Report and you have some experience in dealing with the shop for future inspections.
Final Thoughts on a PPI
In conclusion, a pre-purchase vehicle inspection is a service that helps you determine whether or not a used car is safe to buy. This type of inspection is especially useful for people who want to avoid buying a lemon. By performing a thorough checkup on their potential purchase, these buyers can save themselves from having to pay thousands of dollars later on.
A pre-purchase inspection is performed by a mechanic who looks over the car's exterior and interior components. They look for signs of damage such as dents, scratches, rust, leaks, and cracks. They also inspect the engine, transmission, brakes, suspension system, steering wheel, and tires. Finally, they test the gas tank and battery to ensure that they are working properly.
The results of the inspection help the buyer decide whether or not he or she wants to continue with the deal. If the seller agrees to repair any issues found during the inspection, the buyer has the option to either accept the repairs or walk away. However, if the seller refuses to fix anything, the buyer can choose to cancel the sale and move on to another vehicle.
This process is designed to protect consumers from purchasing vehicles that aren't in perfect condition.
While pre-purchase inspections are helpful for protecting consumers, they aren't always necessary. Instead, the buyer must rely on his or her own judgment to determine whether or not the vehicle is safe to drive. Good luck!