Beware frequent changes in ownership
Why would anyone spend thousands of dollars to buy a car, only to unload it within one year? What if two, three, or four people did the very same thing to the same car? If you look at the bottom of a Carfax report and see that multiple owners have bought and sold the car within a short span of time, you're dealing with what's known in the industry as a "hot potato."
A hot potato almost always has some type of expensive or challenging repair issue. Stay away from these vehicles as if they have a red hot tailpipe spewing out oil and smoke.
Make sure the car recently passed emissions testing
In metropolitan areas that require emissions testing, a significant portion of trade-ins can't pass the test. That's where things start to get dicey. Nearly everywhere in the US, it's 100% illegal for a dealer to sell you a car that doesn’t have a current emissions record -- but that doesn't always hold true for owners. If you see multiple failed emissions tests on a Carfax report, or if the most recent emission test is well over a year old, make sure you ask about this before you waste any more time.
Surprisingly, this red flag can also be a bright green flag if you live in a place that doesn’t require emissions testing. In some rural counties, these cars can and often are bought at a substantial discount. Keep that in mind if you live in an area where emissions tests aren’t needed.