Did you know that, on average, over 17 million brand new vehicles are sold in the U.S.A. each year?
For a country with over 325 million inhabitants, that is merely a drop in the bucket. It is because there are a lot more automobiles on the road than the 17 million figure states that the used car business in this country amounts to half of the revenue and volume of the total automotive retail industry. The number of used car sales in the U.S.A. alone is substantially larger than other retail sectors.
In Lavender Magazine‘s primary readership market, it is a known fact that consumers will most likely buy a pre-owned automobile than a new one. This is why this is an important subject that we should be discussing with you.
There are many ways to buy a used car, more so than new vehicles. It is most likely we will see a used car for sale than a new one, due to the many ways these vehicles are sold.
How do we look for a used car to buy? Why do we want a used vehicle rather than a new one?
With so much information to decipher, it is best to break this down into two parts: the kinds of used car sales that are out there and what to look for in a used car. Do not think of this in terms of specific kinds of vehicles, as we address in our reviews. Many of us will buy a mainstream vehicle—a typical sedan, SUV, or pickup truck from a popular brand. From that perspective, let us go through what kind of used cars sales types are out there.
CERTIFIED PRE-OWNED: Most manufacturers and brands offer this program for low-to-average mileage pre-owned vehicles up to a certain age. The key component is to offer extra warranty and additional services to be included at a higher price than a similar pre-owned vehicle without the extra coverage. If you calculate the cost of owning a pre-owned car to one from a Certified program, you will find that the extra cost is indeed justified. Most likely, you will find these Certified Pre-Owned cars at their particular new car dealerships.
“PROGRAM CARS”: A dealer’s used car buyer will go to auctions or other similar sales to get their inventory. When a rental car fleet removes vehicles from their fleet, a service loaner fleet has changed over, or when a lease is up and the vehicle is returned to the dealer, they become “program cars” where they are only offered a standard used car warranty—or the balance of the warranties still on the vehicle—but could qualify for extra cost items, such as an extended warranty and roadside assistance among others.
USED CARS BOUGHT AT DEALERSHIPS: Auctions and trade-ins provide the remainder of the used car inventory. They are usually vehicles that are ineligible for certification or other programs. All of the independent car lots get vehicles that are considered “leftover” by the larger dealers, though some lots can get lucky and have something very special to sell in their inventory. Buying from a dealer offers plenty of advantages, such as financing options and extra services for warranties and coverage.
PRIVATE PARTY SALES: A lot of consumers opt to look for vehicles via Craigslist or other online resources for their next car. These used cars are sold in transactions independent of the dealer network. Therefore, financing is up to the buyer rather than the seller. The choice of used cars sold by a private party could range in age, mileage, and condition.
Once you understand the various ways used cars are sold, what happens when you find one? What do you look for before you sign any paperwork or give any money away for one?
CHECK OUT THE VEHICLE THOROUGHLY: While dealers are required to inspect each vehicle they sell to consumers, a good walk-around is a start. Look for body condition: rust, dents, and other abnormalities you may find. Look at interior condition: aging materials, seat condition, instrumentation, and control operations. Look inside the engine bay for cracks, possible leaks, and the aging of materials and components. You may want to look underneath the car for rust and other issues with components. If you really like this vehicle, you should have the option to take it to your mechanic for another inspection. If you don’t have a mechanic, check out one of Lavender’s advertisers to assist you before you buy.
KEEPING RECORDS: The biggest bonus of any used car is whether the previous owner kept up their vehicle according to the maintenance schedule. If those records are available, read through them! That way, you will know what was done by the previous owner(s) and what to expect further down the line. Plus, it also helps to get more information on the vehicle—CARFAX reports and dealer records, for example—to get a further sense of the intended purchase before signing anything. Accident records do show up on CARFAX reports, as do the sales and transfer histories.
DRIVE IT! The proof of any vehicle’s worthiness is apparent when you drive it. It has to drive the way you want a vehicle to drive. When you drive your next vehicle, listen to it, feel it, and look for anything out of the ordinary. A simple loop around the block might not be enough to see if you will be happy with how it drives. Get it on the highway, around the bend, and so forth. In other words, don’t buy any vehicle without driving it!
AT WHAT PRICE SHOULD YOU BUY? The negotiation between buyer and seller is always the hardest part of the process. There are a few resources to know what kind of pricing is out there. Kelley Blue Book is one. Plus, Edmunds, Autotrader, and other online resources can help guide the kind of pricing for certain automobiles, right down to the type of sale they would go through. For older cars, Hagerty Insurance offers their Valuation Tools to determine a car’s actual value on the market. If you have a set of numbers, bring them to the table and see if you can get a good deal between what you’re offering and what they’re offering.
SHOULD YOU GET ANY EXTRA COVERAGE? If you are not buying a Certified Pre-Owned vehicle, that decision is entirely up to you. A little peace of mind will go a long way, but the buyer must be aware of what programs are being offered and their stipulations under their coverage. Extended warranties come in various ways, so please review the fine print before you commit to one. If you already have AAA or another great roadside assistance program, you do not really want to add theirs to the extra cost of your transaction.
We can dig deeper to specifics about used cars, but the basics are what every consumer needs. Knowing that your next vehicle purchase will be one that has been owned or leased by another motorist, it is always good to be prepared, even for the worst.
However, used car ownership has its rewards. The lower rate of investment—based on annual registration fees, insurance, and maintenance—helps to keep costs down in both the short and long term. It also helps to know whether it was well loved before you take delivery of that vehicle.
A used car should be a good value to own and buy. But, buyer beware if it does not turn out the way you wanted it to be. Your experiences will vary, but please make it worth the money you save on a new vehicle.