Buying a CAR Used vs. New
Price, quality, cost of ownership, financing, warranty - there are almost as many variables involved in the car buying process as there are cars to buy. The benefits of buying a new vehicle may seem obvious, but it might be time to consider one of the many used vehicles that continue to be turned in from short term lease programs. A quick analysis via our unique Perfect Car Finder will give you a list of both new and used cars that fit in your price range. You can also compare new and used cars side-by-side to further consider your choices objectively.
Consider every avenue of the vehicle purchase process before you sign on the bottom line.
As for new cars, there's the pride of ownership and the new car smell to attract you. But more importantly, by being the sole owner in the vehicle's history, you narrow the field of potential problems. Online pricing information along with details of the new vehicle options and specs let you know exactly what you're getting for the price of the vehicle. Also, there's a wealth of knowledge online and in magazines detailing the attributes of new cars and trucks.
New cars carry lower interest rates in general. Of course, this is not an issue if you plan to pay cash for your next car, otherwise, it's a good idea to watch and compare bank rates for the best possible deal starting with Capital One, the nation's largest online vehicle lender.
Depreciation is another factor to consider. Although both new and used vehicles depreciate, a new vehicle depreciates the minute you buy the car. Most new cars depreciate in value by 40% in their first 3 years.
You know that buying a used car will cost less up front than new, but what's a good price? Check out used car retail pricing to see what you can expect to pay at a dealership. Also, the private party pricing will reflect what you can expect to pay from a private party.
What about financing? It's true that new car financing programs typically have lower interest rates available, but now there are alternative finance programs such as Capital One and their BlankCheck® loan which sends you an actual "blank check" to use on the spot at the dealership or individual's home. This is a personal car loan that can be approved in around an hour and the interest rates are extremely competitive in today's market.
Many factors are involved in buying a used vehicle and there are several channels to consider in finding the right one:
Manufacturers' certified programs have taken much of the risk out of used car shopping by offering excellent warranties on refurbished used vehicles. Only certain vehicles qualify for certification. Typically, the vehicle must be under five years old and have less than 75,000 miles on the odometer.
Manufacturers vary in how many points of the vehicles are reconditioned, but most put the vehicle through a complete check of all major systems. Familiarize yourself with the different certified programs and you will be better able to make a decision. If you want to compare programs, you can visit IntelliChoice for a side-by-side comparison of the various manufacturers' certified programs.
Used Vehicle from a Dealer
If you visit a large, reputable dealer with a brand franchise, they will have a variety of used vehicles for sale on their lot. Although not backed by the manufacturer, these vehicles will usually carry an extended or "after-market" warranty or service program offered by the dealer. Because dealers offer warranties and service programs, the used cars they sell must be carefully refurbished to meet warranty standards. If they receive a car from trade-in that doesn't measure up, they will typically sell that car at auction.
Pricing for retail cars at a dealership will vary, but because of the refurbishing a dealer must do to ready the car or truck, the retail price of the used car will typically be more than a private party price.
It's unfortunate that in this day and age we must be wary of buying from individuals, but this is where the risk of used car buying is at its highest. Before arriving at the home of the private party seller, it is advisable to ask the seller a series of questions about the vehicle in question. Get as much information on ownership history, mileage, maintenance upkeep and especially the condition of the car. Is there any body damage - even dents or dings? Is the exterior paint dull, chipped, scratched or peeling? Is the interior of the car stained, faded, cracked or torn? How does the car drive? Does the steering pull? Are the brakes working well? Do the tires have wear and do they match? Another very important question to ask if you become a potential buyer is, "Are you (the seller) in possession of the title or certificate of ownership?"
The two biggest areas where you could potentially be "scammed" are odometer fraud and damage to the vehicle's frame from a prior accident. These can both be validated by getting a CARFAX vehicle history report. This report, which can be ordered online for a small fee, checks the vehicle's title to see if it was salvaged, flooded or rebuilt. In addition, they'll do an odometer check and you'll find out about the past accident history record of the vehicle. If it was stolen, or was part of a rental or business fleet, chances are it could have been treated pretty poorly.
If you need help assessing the condition of the car, we can help you rate it with the Condition Quiz. By filling out a series of questions, we help you determine whether the car is in excellent, good, fair or poor condition. From the "My Car's Value" page, select year, make and model, then fill in the vehicle mileage and various options. At the bottom of the page there is a section titled "Select Vehicle Condition." Check the box titled "Rate It"; then enter your information into the online form. Kelley will rate the condition of the vehicle based on your input.
Used Online Buying
If you want to buy a used vehicle online , there are many used car buying sites including Kelley Blue Book Classifieds powered by Cars.com where you can search for the car you need and be put in touch with the seller in seconds.
For private party purchases, online classifieds can greatly increase the quality of communication between you and the seller via photos, history, mileage and other vital facts that are clearly displayed on each vehicle entry. You can also apply online for a warranty on your used car for added security.
Whether buying at a dealership or from a private party, the wisest $75 - $150 you can spend is for an independent mechanical inspection by a qualified mechanic. There's no need to squabble over small details unless there are a lot of them. Look for major problems and big services that either haven't been done or are just about due. A good mechanic will uncover prior accident damage that may or may not be severe enough to depreciate the car's value.
In the end, the effort you put into the research process will help increase your confidence in making your next vehicle purchase, whether new or used.