New Cars vs Used Cars
Benefits of 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.
- the car is new and free of problems.
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. Many personal finance experts recommend used cars over new cars for this reason.
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 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 - Many times 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 1000,000'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 to $4, 000 profit into each used car, bringing it up to retail price. This means that there is $2,000 to $4,000 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.