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An Introduction to Buying
a Used Car
Purchasing a new vehicle is often an exciting experience,
especially since buying a car is usually the second largest
acquisition one will make in a lifetime next to buying a house.
You can choose exactly what you want, the car is readily available,
the warranty is fresh, and obviously the car is new and free
of problems. These are all reasonable points, but the option
of buying used has many benefits.
Quite obviously, most consumers opt for used cars for financial
reasons. Simply put, the price of a used car may be fifty
percent less than the latest model, even if the used model
year is fairly recent.
Depreciation is the factor behind these savings, as the new
vehicle drops in value the moment it is driven off the dealer's
lot. In fact, during the first year alone a car will depreciate
at least twenty percent, and will continue to drop in decreasing
increments every year thereafter.
The prospective used car buyer can take advantage of a vehicle
that is only a few years old, but is mechanically and physically
sound, still looks terrific, and has a great price tag. With
the incredible savings, you can get practically the same vehicle
as the latest model and save money, or a higher end model
that one could normally not afford can be purchased for much
less.
The latter scenario can often buy a vehicle with more performance,
safety, and luxury features that you might need but would
be out of reach if purchased new.
Of course, the most common concern when buying a used vehicle
is previous ownership and any potential or unknown problems.
In response to higher consumer standards, dealers are now
offering Certified Used Vehicles.
These cars have been received thorough mechanical and physical
inspections and have been upgraded to a checklist of standards
as close to those of a new car as possible. Often, these vehicles
come with a manufacturer's warranty, inspiring further confidence
for buyers. (It is still a must to visit "CarFax.com" to verify if the vehicle was stolen or had
major damage - Manytimes even large dealers get stung!)
In addition to Certified Used Vehicles, another option available
to you is the Off-Lease Vehicle. These used cars are usually
between two and four years old and were driven by the dealer's
customers who originally leased them. Under a lease, owners
are required to keep mileage to a minimum and must service
the vehicle on a scheduled basis. Often, the owner will service
at the dealership from which the car was purchased, making
access to maintenance files quick and easy. Part of the original
lease remains in effect, and further extended warranties may
be added.
Buying a used car through a dealer has become less of a challenge,
although consumers should still educate themselves and arrive
at the dealership armed with information. The used car you
have in mind should be researched online for consumer reports,
manufacturer recalls, and blue book price.
Online services such as AutoTrader.com, UsedCars.com and edmunds.com will display 100,000's of used vehicles as well as ratings and reviews.
An important point to keep in mind is that most dealers have
calculated about $,2000 profit into each used car, bringing
it up to retail price. This means that there is $2,000 to
negotiate with between wholesale and retail price, and you
should start with an offer of five percent below wholesale
price and proceed with the negotiation in full control of
the price.
Using these resources and comparing the information gathered
to local dealer web sites and used vehicle publications will
give you a solid basis for making a reasonable and educated
offer on a used vehicle. These guidelines also apply to private
sales, although you should be aware that most of these vehicles
are sold "as is" and the sale is final. Again, online
research will reveal the vehicle's history. In general, you
should start with an offer at fifteen percent of the wholesale
price to the seller and work from there.
With the progress being made at the dealership level with
used vehicles, buying a "nearly new" car has become
a practical option. Combined with the numerous reputable online
services providing insider information, much of the uncertainty
traditionally associated with used cars has been eliminated.
With patience and thorough research, you can avoid paying
too much and will leave a dealer or private sale with an excellent
vehicle.
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