Over the years I've had great success purchasing used vehicles, buying over 400 cars in my life, only four of which were new. Barely a handful of the used-car transactions turned out to be disappointments, and that was when emotion and enthusiasm overcame good sense.
In the last dozen years, cars have been so well designed and built that there are few bad cars around. Many remaining on the road are in good to excellent shape. Buying used can make your dollars stretch, winding up with more car for less money than buying new. But the used-car buying process is more complex and requires fortitude, research and negotiation. Examine your needs and the level of effort you can afford to expend to find the right car.
A great place to start is by locating a used car with the support of the automaker behind it. Volvo Certified Pre-Owned Car Program, for instance, offers reconditioned two- to four-year-old Volvos, with under 60,000 miles, which undergo painstakingly thorough inspections and reconditioning. The vehicle then comes with a 24 month/24,000 mile Volvo Certified Limited Warranty with zero deductible; affordable financing options; two seventy-five dollar vouchers for service at a Volvo retailer; 24-hour On-Call Roadside Assistance; and the Tire Protection Plan.
Benefits Of Buying Used
Used cars have always been big business. As many as 45 million used cars will be sold in the United States this year -- that's three times the number of new cars that will be sold. There are some important changes occurring in the used-car marketplace -- the quality of the cars on dealer lots is much better and there are some new, consumer-friendly ways of buying used cars. A growing number of motorists who might normally consider only brand new cars are now thinking twice about buying a "previously-owned" vehicle. There are newer, better products to choose from and, in many cases, good warranties to support them.Sometimes the desired model can no longer be purchased new. With the heavy demand for trucks and SUVs, many automakers have canceled car models that were marginally profitable, even though well built. Today a foreign sports car or fuel-sipping economy car may be available only in used condition. Additionally, used cars provide more flexibility to choose a more expensive vehicle or step up to a better model than could be purchased new. The same money could buy a brand-new Hyundai, a two-year-old Taurus, or four-year-old BMW.
A car bought several years into its life span has stabilized greatly in value because the rate of depreciation flattens out. But the car has not declined significantly in either mechanical reliability or appearance. Insurance costs and other fees are often considerably less than when the car was new. Therefore, if the main goal as a vehicle buyer is obtaining reliable transportation for a good price, the used-car market can be the best place to shop.
The cost of owning and operating a used car will be fifty percent less than that of a new car, primarily because the tremendous depreciation that occurs in the first year of ownership is no longer an issue. Also, the overall cost is much less because there are no financing fees, and operating expenses, often even repair costs and insurance rates are lower. Indeed, price is the primary reason most people consider buying used cars. At the same time, with the increased quality of cars in general, the excellent well-maintained cars coming off leases, and dealer used-car certifications, pre-owned cars are becoming a great value.
It is hard to say when a used car is too old to provide useful service to an owner. With even minimal attention, a modern car should last five years or 60,000 miles. I have my cars lubed and the oil changed at half the recommended interval (or every three months), mainly to make sure all the mechanical details are checked on a regular basis. With similar attention, my mother has a 1979 Toyota Corolla wagon (bought with 90,000 miles but well maintained) which has 280,000 miles on it and has spent two-thirds of its life driving on cobblestone streets in Guatemala. It never has had engine work and never has broken down.
Because leasing demands attention to regular upkeep, off -lease vehicles are a good place to start a used-car search. Near-new cars, two-to-four-years-old, generally are vehicles that have been returned from lease customers. Because of the stringent lease mileage restrictions and maintenance requirements, these vehicles practically qualify as new, even in appearance; and usually are still covered by their original warranties.
Certified used cars have been refurbished to like-new standards and passed a checklist of requirements. It is important to determine whether a used vehicle is dealer-certified or manufacturer-certified, since the standards may differ. The manufacturer standards try to bring cars to like-new condition, since their corporate reputation is tied to the sale. The dealer may be more interested in a quick, cost-effective turnaround. Ask for a copy of the standards and compare them. Nevertheless, certified used cars provide a peace of mind similar to that which traditionally comes only with buying a new car.
It is important to understand the restrictions of any warranty, especially if there are constraints on where work can be performed. Limitations on where repairs can be executed are particularly important. Should the car break down out of town and it is repaired at a shop not authorized by the warranty, the costs may not be reimbursable. Since warranties vary widely, get copies in advance of the sale, ask questions, and compare them if you are shopping different sources. Don't rely on the claims of the dealer. Make sure if an item is purported to be covered, it is in fact listed in the warranty. If not, go ahead and add it in. For more information on warranties, read the article "Used Car Warranties: To Buy Or Not To Buy."
To understand some of the forces at work in the used-car market, consider the trends shaping the new-car business. With the average 1998 model priced above $20,000, motorists are searching for ways to lower their monthly payment. Low-cost leases have become an increasingly popular option to high monthly payments on a purchase. With the large number of cars coming off lease, many manufacturers are reconditioning and re-leasing these used cars.
While folks who buy usually keep their cars five years or more, the average lease runs two to three years. There's a glut of "nearly-new" low-mileage, off-lease vehicles flooding dealer lots. To keep that metal moving, many manufacturers offer special packages designed to enhance the appeal of those vehicles. This began with luxury brands, but now every major automaker has used lease and certification programs.
For example, GM products less than four years old with no more than 60,000 miles on the odometer go through an extensive, 110-point inspection, and worn or broken parts, whether a wiper blade or an air-conditioning condenser, are repaired or replaced. Then the vehicles are backed by extended factory warranties with the same coverage as if they were new. To wrap up the package, GM throws in a three-day, 150-mile, money-back guarantee.
Just about every manufacturer is getting into the act with its own certification program. Volvo Certified Pre-Owned Car Program, for instance, offers reconditioned two- to four-year-old Volvos, with under 60,000 miles, which undergo inspections and reconditioning and are sold with a 24 month/24,000 mile Volvo Certified Limited Warranty with zero deductible; affordable financing options; two seventy-five dollar vouchers for service at a Volvo retailer; 24-hour On-Call Roadside Assistance; and the Tire Protection Plan. The cost of a good warranty is offset by the peace of mind it delivers - exactly what Volvo delivers along with their cars.
The public is fickle and some highly rated cars with excellent maintenance records depreciate more quickly. These vehicles can be far better values used than new. Probably the car that typifies this best is the original Infiniti Q45, which was a top-of-the-line luxury car, backed by a good organization, that fell victim to some poor marketing choices. Despite the highest consumer reviews and a durable reputation, the Q45 sells for about the same price as a Camry or Accord of the same year. Other underrated cars are Nissan Sentras, Maximas and almost anything from Subaru or Mazda. Plenty of other bargains can be found by comparing the depreciation rates and the used-car reviews.
Drawbacks To Buying Used
Used-car supplies are limited to those available in a particular area. It may be necessary to take a chance and travel to examine each prospective vehicle. The older the car, the more the buyer must beware.
Used-car dealers have the reputation of being less than pleasant to deal with -- though the advent of the used car superstores seems to be changing this stereotype. Used cars usually carry poor warranties or none at all. There are few remedies for unsatisfactory operation other than a law suit if the seller does not honor agreements or expectations. For that reason, get everything written document (even hand written) with a signature.
It is easy to be lulled by the quality and reliability of modern cars, but just a few years ago they had complicated carburetors rather than electronic fuel injection, less reliable ignition systems, fewer safety features. All in all, less attention was paid in the past to reliability, engineering and quality. Paying 20% more for a car a couple years newer with better engineering can be repaid many times over in lower repair costs and less frustration.
A serious headache is buying someone else's problem. Research and evaluation come in handy here. Common-sense guidelines and careful inspection help separate the cream puff from someone's cast-off lemon. Information on this subject is found in the article "Evaluating A Used Car: Finding A Sound Vehicle."
When trading in your present vehicle, a used-car dealer will usually give less for it than a dealer selling a brand new car. And, of course, buying from a private individual offers little chance for a trade at all. Still, swapping with a private owner is a possibility, although a far-reaching one. It never hurts to ask, especially if someone is selling a car due to the need to eliminate or decrease monthly car payments. This could cause interest in your less expensive trade.
Benefits Of New Cars
Who doesn't want shiny paint, up-to-the-minute styling, cutting-edge technology, the promise of smooth, quiet, trouble-free operation, and a "new-car smell." The purchasing process is less intimidating when buying a new car. Major assets include the peace of mind provided by a decent warranty and hope for at least a few years of trouble-free driving. New-car warranties are more comprehensive, backed by solid companies, and extend for longer periods of time.
There's also the psychological aspect of owning a vehicle right from the start -- a vehicle that no one else has owned. Owning a car from the beginning is important for the person who prefers hanging on to a vehicle for a longer time period (more than five years). By owning a car or truck from the outset, it can receive the care needed to extend the limits of its life span. The entire history of the vehicle is recorded, and surprises are not likely to be encountered.
New car buyers can get dealers to create a special order from the manufacturer, obtain different models from other dealers or add a variety of attractive features. Buying new gives more control over the choices and optional features that can be added. Used-car buyers are limited to what is available in their area.
Buying new is usually the only way to obtain a car or truck that is both innovative and popular. It will be a long time before any used models of the hippest vehicles hit the market and, with people waiting in line for them, the price won't come down much.
Drawbacks To Buying New
From the moment it is driven away from the dealership, a new car loses value. The largest drop, often as much as 20 percent of the purchase price, occurs immediately, not just during the first year. The rate of depreciation is not uniform, owing to unpredictable changes in the automobile marketplace. As a result, some cars hold their value better than others, but often for different reasons. When a car model is totally revamped, especially if the name is changed, the older version usually drops in value more quickly. Those used cars are generally good buys. Another drawback occurs if a new car is totaled in an accident. Sometimes the insurance is not adequate to replace the car. When buying a car, the interest on the loan is paid off faster than the principal (the vehicle itself). Less money has gone to the reduction of the purchase price and insurance only covers the vehicle value, not the interest, therefore causing a cash shortfall.
In Conclusion
New car prices are high, so the effort involved in buying a used car can result in great savings. It is still possible to enjoy a period of trouble-free ownership when buying used by taking advantage of services such as Volvo Certified Pre-Owned Car Program. In addition, there is a lot of information available on older cars. This ranges from word-of-mouth, used-car surveys such as Autoweek's AutoFiles (check your library), information from specialized magazines, and Intellichoice's data compilations at http://www.intellichoice.com. For the most complete information, buy their publications. Take the time to become informed and enjoy.
