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IF YOU'RE in the market for a used car, a budget of at least $10,000 can help you avoid a lot of lemons.

Those words of wisdom come from Bob Knoll, head of the Consumer Union's Auto Test Division, the folks behind Consumer Reports magazine's annual review of the best and worst vehicles.

Knoll, who spends his days driving and scrutinizing new and used cars at CU's East Haddam, Conn., auto center, said a budget of $10,000 opens the door to a wide variety of nearly new vehicle choices.

"We use the $10,000 figure because it's about the lowest price you can spend on a new car," Knoll said. "But if you take that same $10,000 and shop for a late-model used car, you'll probably get a more comfortable, better engineered car you'll really like."

Keep in mind that cars and trucks lose a lot of their value in the first couple of years on the road, with the average car's value depreciating by one-third in the first two years.

But while these pre-owned cars wear considerably smaller price tags than their new counterparts, they still have a lot of life left in them. If the car was well maintained, there's little perceptible driving difference between a two-year-old car and a brand new car, according to Knoll.

"If you're going to spend $10,000, would you rather be driving around in a tiny 1995 Hyundai Accent with vinyl seats, or a well equiped 1992 Honda Accord?," he asked.

And in the $10,000 range, you increase your likelihood of ending up with a vehicle you can drive worry-free for five or more years.

"The best way to save money is to find a car you can drive for five to 10 years, basically until you've used it up, and then find another one and do the same thing," Knoll advises. "There are much better ways to spend money than on car repairs."

Sounds pretty good doesn't it? Find a sound, attractive used car and drive happily into the sunset.

Unfortunately, the road to the ideal used car tends to be riddled with potholes. Expect to spend some time and money to reach your destination.

Gerry Smith, owner of Towne Motor Car in Buffalo, has seen a parade of what seemed to be perfectly wonderful used cars limp, or worse, be towed into his shop.

Smith's advice: Find out everything you can about the car. Your car-buying homework list should include the following:

Review the service records (if there aren't any, be suspicious).

When you go to see the car, look for oil and other fluids on the ground under the vehicle. Pay close attention to the body and paint job. You don't have to be a mechanic to notice leaks or spot evidence the car has been involved in a wreck.

Have your mechanic look at the car, even if you're buying from a dealer. The cost of a thorough inspection and a compression test could save you thousands of dollars later.

Check resources such as the Blue Book and local newspaper ads to determine a price range for the make and model you're considering.

Check with the Better Business Bureau if you're unfamiliar with the dealer.

Basic common sense can save used-car buyers a lot of trouble and money, according to Smith.

"Never buy a car you've only seen at night. That sounds obvious, but people do it," he said. "Always drive the car. Always. And make sure it's a cold start. Open the hood and feel the engine. If it's warm, come back at another time."

He's also a stickler for oil changes. If service records indicate an uneven pattern of oil changes, walk away.

"Oil is the lifeblood of the engine. It doesn't matter if you're going to be meticulous about changing the oil. If they didn't, the damage is done and you're going to pay for it," Smith said.

Another key piece of advice is to check with a reputable dealer who sells the make of car you're considering and find out about manufacturer warranties and recalls.

Sammy Buscarino, owner of Sammy's Auto Repair in Buffalo, said he recently had a customer bring in a used Saab with serious steering problems for a second opinion.

While Buscarino agreed the vehicle needed more than $1,000 worth of rack and pinion work, a call to a local Saab dealership found the problems were subject of a manufacturer's recall and Saab would pick up the tab.

"If he'd checked with a dealer, he would have known from the start the car had been recalled. It might have made a difference in his decision to buy the car, and definitely would have saved him time and trouble getting repair estimates," Buscarino said.

The repair shop owner said it pays to be a skeptic about used cars. Looking back at the number of problems he's detected when looking them over for potential buyers, he's seen many more bad deals than good.

"I'd say 60 percent of the time I tell them not to buy the car. I've seen a lot of cars that look great and are nothing but junk," Buscarino said.

In its April issue, Consumer Reports lists its Top 10 picks for used car buyers with a budget of $10,000 or less. The alphabetic rundown includes the following: 1991 Acura Integra, '92 Geo Prizm, '90 Honda Accord, '92 Honda Civic, '91 Mitsubishi Galant, '90 Nissan Maxima, '93 Saturn SL and SW, '91 Toyota Camry, '92 Toyota Corolla and the '90 Volvo 240.

Based on local cars Smith has worked on, he'd add late-model Ford Taurus and Crown Victoria models to the list, along with the Mercury Sable and Marquis.

On his "what to avoid" list, Smith includes all Chevrolet cars with 2.8-liter engines; Celebrity, Corsica and Beretta models top that list.

"These are nice cars with bad engines. They have a record of cracking and it's a chance you shouldn't take," he added.

Where you buy the car also is an important consideration.

Knoll suggests buying from a registered dealer who can warranty what he sells. A dealership with an on-premises service department also offers the added benefit of being able to fix any problems the buyer detects.

"Let's say your mechanic says the car needs new brakes or a new exhaust system. You can go back to the dealer and make them do the work to close the deal," Knoll said.

Another advantage is that a new-car dealership is more likely to have service records on the vehicle and may have performed all prior work. If the former owner was a satisfied customer, they'll have no concerns about putting you in contact with them to ask direct questions about their experience with the vehicle.

One disadvantage of dealing with a dealer versus a private seller is that you might pay more.

If you choose a private seller, you may find the more casual sales approach will lead to a better price. You also might feel less pressured to close the deal and be able to take more time researching the car.

But remember, if you end up with a lemon, you may have no recourse. Just because they seemed like nice people, who even plied you with coffee and homemade cookies, there's probably a good reason why they're selling their beloved car.

Also make sure it was their car. There are lots of folks out there who sell cars on the side to make an extra buck. By asking the right questions, you might find out that sweet car in Cheektowaga, actually came from a car auction in New Jersey.

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