6 Smart Reasons Why You Should Buy a Used Car
Go to a local car dealership, enter the showroom, open the
door to one of the vehicles on display, and breathe deeply. Ahhhh, new car
smell. Intoxicating, isn’t it? Alluring to the point that you’ll spend, on
average, about $13,500 in order to obtain it.
That’s right. According to Kelley Blue Book, in 2015, Americans
spent, on average, more than $33,500 on new vehicles. Meanwhile, J.D. Power
reported that in the 2015, the average used vehicle cost just over $20,000.
That new-car smell sure is an expensive air freshener.
Of course, there are other reasons to buy a new car. At the
same time, it makes plenty of sense to buy a used car, and not something
vintage like that cool Volkswagen Thing pictured above. We’re talking about
lightly used vehicles, the type J.D. Power describes when it claims that in
2015 the average used vehicle was 4.3 years old and had 51,554 miles on the
First up on our list of the 6 best reasons to buy a used car
is the most obvious one: saving money.
1.) Save Money
You will save thousands of dollars by purchasing a used car.
In fact, based on the data cited above, you’ll spend $13,500 less by choosing
the average used car instead of the average new car. Why is this? New cars
depreciate, and fast.
Sign the paperwork for a brand-new car, drive it off the
lot, take a ride around town, and then return the car to the dealership. It
isn’t a new car anymore. It is a used car. And because it is a used car, it is
worth substantially less than you paid for it just an hour prior. After three
years, Consumer Reports says your new car will be worth just 54 percent of what
you paid for it, on average.
This is not true of all vehicles. For example, as this
article is written, used Toyota FJ Cruisers are worth a far greater percentage
of their original value than the typical used car. At the opposite end of the
spectrum, in a nation awash in cheap gas, used Nissan Leaf electric cars might
as well be free.
Beyond the issue of depreciation, you’ll pay less sales tax
on a used car, insurance for a used car costs less, and in many states it is
cheaper to register a used car than it is a new car. The thing to remember is
that these savings will ultimately be spent on a used car’s higher maintenance
Remember the 1970s, when cars like this old Ford LTD rusted
apart within a decade? For something like that to happen to a modern automobile
would require monumental abuse by a vehicle’s original owner.
Today’s cars, trucks, SUVs and vans simply last longer. By
the middle of the summer of 2015, according to IHS Automotive, the average car
driving on American roads had reached a record high of 11.5 years of age. The
auto industry think tank also predicts that by 2020, the number of 12-year-old
vehicles still in operation will rise by 15 percent.
Clearly, modern vehicles are built to last longer than ever,
which means you can save thousands and expect a long service life from a used
3.) CPO Programs
Thanks to low payments, leasing is increasingly popular with
new car “buyers.” Experian Automotive reported that during the first part of
2015, more than 30 percent of new vehicles were leased rather than purchased.
Most leases are written for 3-year terms, and include
restrictions related to mileage, vehicle maintenance, and condition. Due to
these restrictions, people must take good care of the vehicle or face expensive
fines at the end of the lease. When the lease term is up, the car is returned,
and the returned vehicle must find a home. Typically, that car’s new home is
the dealership’s certified pre-owned (CPO) lot.
Off-lease vehicles are usually perfect for CPO programs,
which essentially guarantee a used car buyer a vehicle in “like new” condition.
Cars sold through CPO programs have low mileage, they’re well cared for, and
all maintenance is up to date.
However, some vehicles that find their way into CPO programs
are not off-lease vehicles, and they’re not lightly used trade-in models.
Rather, they’re pulled out of daily rental car fleets. You’ve rented a car
before. You know how they’re treated. You don’t want one of those.
Good thing you can always run Vehicle Identification Number
(VIN) check to obtain a vehicle history report.
4.) Vehicle History Reports
Carfax and AutoCheck are the two biggest providers of
vehicle history reports, and it is absolutely essential to obtain one when
buying a used car. Using the vehicle’s VIN, either company can obtain a
substantial amount of information on a used vehicle. Highlights of the kinds of
information contained within a vehicle history report include:
• Number of previous owners
• Previous registration status (lease, personal, fleet,
• Accident, flood, repair, Lemon Law history
• Mileage validation
While a vehicle history report cannot identify every
possible cause for concern associated with a particular used car, easy access
to them certainly adds significant peace of mind when buying one.
Also, note that one of the many perks associated with most
automaker CPO programs is a free vehicle history report for the vehicle you’re
5.) Favorable Financing Rates and Terms
While it is true that you will typically pay a higher
interest rate on a loan for a used vehicle than you will on a loan for a new
vehicle, historically low rates mean that many automakers can offer attractive
financing options for their CPO vehicles.
For example, as this article is written, Volkswagen is
providing 2.49-percent financing for 60 months on CPO vehicles sold through its
World Auto program. According to Bankrate, this rate is competitive for my
area, matching the best 60-month used car loan that I could obtain on my own.
My local dealership has a 2013 Jetta GLI with Autobahn trim
in stock, one with just 27,700 miles on it. Through the World Auto financing
offer, I’d put $550 down, pay the sales tax and any associated fees, and
finance $20,000 for 60 months, getting a German sport sedan for $355 per month.
And that’s before price negotiation.
6.) Drive a “Better” Car
Check out this 2014 Audi A4. Sitting on a lot just a few
blocks away from the Jetta GLI described in the previous section, this CPO A4
is equipped with Premium Plus trim and Quattro all-wheel drive, and has fewer
than 30,000 miles on it. The price is discounted to $27,994, about $12,000 less
than a new 2016 would cost.
Not only that, but this Audi is basically priced the same as
a fully loaded 2017 Hyundai Elantra Limited or a brand-new Chevy Malibu LT with
a leather package. Is the Audi the “better” car? Well, that all depends on how
you define “better.” It would certainly be the more “impressive” car as far as
what other people think when they see you behind the wheel.
Even if you’re not looking to move up to a premium brand and
dealership experience, choosing a used vehicle opens a world of possibilities.
Using AutoTrader and its search tool, which provides a number of useful
filters, I discovered that there are 4,093 used cars within 50 miles of my
house, all priced at less than $20,000 and with fewer than 30,000 miles showing
on the odometer.
Buying a used car is riskier than buying a new car, because
you don’t know with 100-percent surety where that car has been and how it was
treated, and there are no guarantees that significant problems won’t arise
before you’ve got it paid off.
What’s that old saying? You don’t get something for nothing?
That’s true when you decide to save thousands by choosing a used rather than a
new car. In exchange for a healthier bank account, you assume some risk, and
perhaps lose a little peace-of-mind.
The good news is that today’s vehicles are better than ever,
vehicle history reports can reveal important details about a car’s past, and
automaker CPO programs offer a nominal guarantee that you’re getting the cream
of the used car crop.
NEW YORK DAILY NEWS
Wednesday, February 24, 2016, 3:29 PM