Good Info, repped.
Let me add.
If the oil is milky in colour the headgasket needs replacement.
Once car is warmed get someone to rev the car.
White smoke means there is coolant in the combustion chamber - headgasket needs replacing
Blue smoke - Oil is in the combustion chamber, piston rings are worn
Black smoke - Ok. Just its running very rich, it still shouldnt be though.
Jack it up and inspect for any oil residue. you are looking for oil leaks. If there is an oil leak, then there will be a drop in oil pressure, if there is a drop in oil pressure then that means the engine internals wont be properly lubricated, if your going 4000rpm and something isnt lubed up properly there will be metal on metal contact. Your engine will break. And your wallet will hurt.
There shouldnt be oil residue ANYWHERE. Dont listen to whatever the seller says. Oil goes in the engine not outside it. Look at where its usually parked for oil stains.
Keep this in perspective. You will near impossible to find an awesome fault free car. And if you do it wont be cheap.
The trick to buying USED car's is to find one with the LEAST repair bills in your price range.
Bookmarks