My very first car was pre-owned. It lasted me a long time even though it was old when I got it. Since then, I have bought three new cars. Two of the cars were fabulous, and one I had to turn back in under the Lemon Law. Thanks to these experiences, today I know a lot more about the merits of buying new versus used. Read on to discover what to consider before making this important decision for yourself!
Choosing your next vehicle
Many editorials about how to choose a car seem to revolve around resale value—the value of a vehicle at the time it is resold. If you plan to keep your car only a short amount of time (5 years or less), this will be an important factor in your decision.
However, nationwide surveys show more Americans are holding on to their vehicles for 10 years or longer—a result of the ongoing economic fluctuations. The New York Times reported that, as of 2011, the average age of American vehicles is 11.1.
So looking at your next vehicle's potential resale value is good research to do. But even more important in this changing global economy may be the following:
- Gas mileage (and make sure the vehicle takes regular unleaded).
- Carbon footprint (emissions, hybrid lifespan).
- Expected lifetime mileage (look for 200,000+).
- Prior repair, maintenance, accident records (especially important for used cars!).
- Anti-rust and anti-corrosion ratings (especially important for used cars!).
- Cost of later-life, major expected maintenance and repairs (ex: transmission, belts).
New versus used: what’s better?
To hear the rich tell it, the only way to buy a "new" car is to buy one that is used.
Their reasons for this include:
- Give any new car about six months and it will become "used."
- You can skip the automatic drastic drop in value when you drive it off the lot.
- Your expenses (insurance, sales tax) will be lower.
- With most pre-owned cars today, you still get a warranty (at least from a dealership).
- You get more car for less money (luxury used is still less expensive than new economy!).
However, buying a used car does place the burden of research firmly in your court. You need to put on your Private Investigator hat to find out everything you can about the vehicle before you buy.
Here’s what to look for:
- Find out the Kelley Blue Book value of the car (make, model, year, mileage, etc.). This tells you where your negotiating room lies.
- Run your own Carfax report. You use the VIN number of the vehicle to pull up its history. This way, you can learn about prior accidents, find out if the car's title is clean and clear, discover if the car has been salvaged or totaled, if the car has ever been flooded, and other critical information.
- Hire your own trusted mechanic to inspect the car. Don't trust the seller's word—or their mechanic. Hire your own to be sure there are no unpleasant surprises waiting.
- DON'T get too attached! Until you have done your homework, stay emotionally objective and keep shopping for cars. Best case scenario: you will find another car that is even better!
- Search online. Do an Internet search of the car's specifics (make/model/year/mileage) and find out if other drivers report specific problems or issues. Also check to see if there have been any safety recalls for that particular vehicle.
3 Different ways to buy used cars
If you opt to shop for a used car, these are the three best-known ways to find one either in-person or by shopping online.
- Buy from a dealership. Dealership pre-owned vehicles typically come with a few "new car" perks, including some level of warranty, a Carfax report, and trade-in options for your former vehicle.
- Buy from a private owner. When you buy a single car directly from its previous owner, you may get a better deal on price, but you may sacrifice on warranty (depending on whether there is any remaining time on the original warranty or if the seller has bought an extended warranty that is still active).
- Buy from a fleet lot or at auction. These cars include used rental cars, fleet cars, police vehicles, and repossessed vehicles. Here you will find a special set of pros and cons. Rental and fleet cars are typically well-maintained, and many have some warranty left. However, because rental and fleet cars are often covered under company insurance, there may not be an accident and service history available. Your best bet is to do all of the same research as you would do when buying a vehicle from a private dealer.
Shopping online vs. in person
Finally, the Internet offers many more vehicle options than you could access just by going through your local paper's classifieds. But is it safe to buy a vehicle online?
Ultimately, experts say "yes"—so long as you keep these important safety tips in mind:
- Verify the company's authenticity (whoishostingthis is a good resource).
- Beware of any price that sounds "too good to be true" (it probably is!).
- Do not submit your payment information unless you’re sure it’s secure (look for a small padlock to the left of the URL or an https:// in the browser bar).
- Be sure you can do a physical inspection with your own mechanic before purchase.