Buying a pre-owned vehicle can be a cost-effective way to get a reliable, affordable car or truck. The moment a new car leaves a lot, it starts to depreciate in value, according to U.S. News & World Report. After the first few years of ownership, the vehicle has lost a significant amount of its value. By buying used, consumers avoid that steep depreciation.
Pre-owned vehicle ownership is popular, as Americans buy 50 million used cars a year, according to Paul Taylor, the chief economist for the National Automobile Dealers Association. Buying a pre-owned vehicle takes a little more research and work than buying new, but that time spent can be worth it. Here’s how to navigate purchasing a used car or truck.
Check vehicle value. Utilize a car pricing tool such as Kelley Blue Book or Edmunds to gauge the value of a used vehicle. This way you’ll have an understanding of the range of prices that are acceptable for a vehicle of a certain age, make and condition.
Consider ‘certified’ pre-owned vehicles. Many dealerships stand behind vehicles of a certain age and condition. Often called certified pre-owned vehicles, these tend to be leased turn-ins that are between three and four years of age and may still be under full or partial warranties. Certified pre-owned vehicles remove some of the worry associated with buying used, since warranties will cover the repair costs of certain parts, such as the engine and drivetrain. Plus, the dealerships’ mechanics have given the vehicles health checks before listing them for sale, certifying their condition and mileage.
Confirm financing rates. Many manufacturers are offering financing for certified pre-owned vehicles that are as competitive as those for new cars. Shopping around for rates, both at dealerships and other lenders, can make pre-owned vehicles even more affordable.
Exercise caution with private sellers. Buying from a private seller is a bit riskier than utilizing a dealership. That’s because the due diligence falls on you as the buyer. Ask for a vehicle history report (commonly known as the CARFAX) for any vehicle you’re considering, even if it means paying for the report. The report will list any accidents and other red flags. If a seller refuses to offer the report, pass on the deal.
Bring a mechanic. Another safeguard is to have your own mechanic look over the vehicle before purchase. A professional will know what to look for in terms of unusual wear and tear on a vehicle that may not be evident to drivers.
Budget for all costs. Before making any decisions, develop a used car budget that takes into consideration the total cost of owning the vehicle. This can include the monthly payment, interest, insurance, maintenance costs, and fuel costs.
Pre-owned vehicles can be great bargains, especially in an era when supply shortages are making new vehicles even more costly.
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