Safely Buying a Used Car

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See my multiple series about buying a car here.  Then remember that new cars aren’t your only choice and frequently aren’t your best choice.  As soon as you drive your new car off the lot, it becomes a used car and loses value.  Prices of used cars depend not only upon depreciation, but also “supply and demand” so prices depend upon such factors as the availability of models, what’s hot, the economy, gas prices, and aggressive pricing of new cars.  Used cars not only are more affordable, but may have the best value.  Buying a pre-owned vehicle may be the best way to step up a level of luxury and still remain within your budget.  Consumer Reports magazine recommends buying a used car 1-3 years old, and notes that many recent model cars can get up to 200,000 miles without major problems.  However, buying used vehicles does require a few extra steps to increase the chance you are not getting a lemon or even worse – a car that has previously been in an accident or natural disaster.

Start Your Research

Start your search at one of these websites:

See average prices for dealers, private sales, and certified pre-owned:

These provide the average prices and enable you to start hunting for your best deal which is not only the lowest price, but also the best options, lowest mileage, and best condition.  Low mileage vehicles are usually best, but you can get a lower price on high mileage cars, and newer cars are more reliable than ever.  Most powertrain warrantees, for example, cover up to 100,000 miles.  After getting the “average” price from a website, start your bargaining 10% below that.  Bargain harder for cars that have been on the dealer’s lot for more than 30 days.  (Carfax.com and cargurus.com should show this.)

You have many places to shop for used cars including local automobile dealers and many websites.  If you want to cut out the middleman, try these:

  • http://www.craigslist.org – Craigslist is more likely to list vehicles from individual, local owners.
  • http://www.ebay.com/motors – Buying a car on eBay can require some faith and extra delivery charges, but tens of thousands of people do it successfully every year.
  • Rental car companies websites – They sell their cars after about a year, usually in the fall. They have many miles, but are generally well maintained.

Certified Pre-Owned

There is even a premium class of used cars called “certified pre-owned” which are late-model cars with low mileage that have been inspected by factory technicians and include extended warrantees.  Each automaker’s certified program is different, so you can find the details here:  http://www.autotrader.com/research/certified-cars/compare.jsp

The cost of certified cars can be $500-$3000 higher, but in addition to peace of mind and extended warrantees, you might get extras such as special financing from the dealer or lower interest rates from a bank.  Verify that you are getting a certified car from the manufacturer’s program rather than the dealer’s which may only have an extended warrantee and little inspection.  Note that sometimes one year old, used cars can be more expensive than new cars if the new car has lower interest rates to finance it, so here is another example where it pays to do your research.

Reduce Your Risks

If you are not buying a certified pre-owned car, then you should reduce your risk by taking the following actions.

These vehicle history reports aren’t perfect and certainly do not mean that the vehicle is without any damage or defects, but it is an easy, inexpensive, and reassuring step.  Most dealers provide them.  Always ask for them, even from private sellers.