Now is a great time to buy a used car, but getting a quality pre-owned model can be a daunting process compared to shopping for a new one. There are a lot more factors to consider to get the right car at the right price. Here are some of the most common mistakes used car shoppers make.
We have seen this time and again: a person buys a car that your average gearhead knows to avoid, and that car has some catastrophic failure which costs the buyer a lot of money to get back on the road.
People will spend hours figuring out which smartphone to buy, but won’t put in the same amount of time when selecting a car. Since pre-owned cars are often out of warranty and have some miles on them, it is even more crucial to read up on what models are known for their reliability and which cars could be major headaches down the road.
This doesn’t take a lot of work. Resources like Consumer Reports, TrueDelta, and the Long Term Quality Index all have tons of data that can tell you which cars are worth buying and which ones are likely to be money pits.
Research is especially key if you’re the adventurous type who fancies themselves a well-depreciated luxury or exotic car. Go on the forums, talk to owners, maybe even chat up some technicians that work on these rides every day. In order to avoid very troublesome and expensive repairs, buyers of specialty cars really need to know what they are getting into.
Ask anyone off the street what a good used car is and they will probably say “A Honda or Toyota.” And they would be right. But a lot of people think that the Asian brands are automatically a more reliable purchase than an American car, which is not the case.
By ignoring domestic models, used car buyers could be missing out on a very reliable car that will often be newer and will have fewer miles than a similarly priced import. For example, if someone was shopping for a sedan for around $8,000, your average Accord at that price will have around 80,000 to 100,000 miles. While that is really nothing to worry about for a Honda, that same buyer could have the very durable Chevrolet Impala with 50,000 to 70,000 miles for the same price.
Again, this comes back to research, but often the best values in the used segment for shoppers on a tight budget are what I call “old people specials.” These are often near-luxury domestics like Buicks and Lincolns driven gently be retirees.
They might not be the most stylish rides, but they can often be had for cheap and will often run for a long time.
While buying a car from a dealer may be more convenient in terms of selection and getting financing, there is no real evidence to suggest that the pre-owned cars found on a dealer lot are of a significantly higher quality than a similar car for sale from a private seller—even though people often think so.
In fact, buyers shopping on the lower end of the price spectrum will find that they will get a little more for their money by searching private sale listings over their local dealerships. Dealerships buy cars and have to make a profit off them, therefore they need to sell the vehicle for more than they bought it for.
A private seller often isn’t looking to make a profit—they just want to get a fair market price for what they have.
Even if you narrow the field down to the most reliable cars within a certain price range, reliability is only as good as the maintenance. It doesn’t matter if a Toyota Corolla can run for 300,000 miles if the previous owner neglected it or if the car was damaged, the car may not hold up to your expectations.
This is why it is crucial to have any pre-owned car inspected by an independent and trusted mechanic. Not only will a good inspection reveal any major flaws and red flags, it could also give you information on minor issues to take back to the buyer and leverage a lower price.
For example, if the car you are looking at is in good working condition, but the inspection reveals that it will need new brakes soon, that isn’t a deal killer, but you might be able to use that knowledge to have the seller take a few hundred dollars off.
There are some people out there who have the philosophy of “never buy a new car.” While this makes sense on the surface, once you hit a specific price point with certain high-value, brands it’s often smarter to buy new.
Many buyers still assume that a two-year-old used car is going to save them a significant amount of money over a new model. While this is generally true for luxury cars, mainstream brands like Honda and Toyota, that as I mentioned above are often the go-to used cars, have higher resale values that narrow the gap between the used and new prices.
This is especially true right now with slow sedan sales. Rebates and dealer discounts on four-door models are steep, so by the time you haggle down the price of a brand new car you might be close to or even cheaper than a used model.
Obviously, if you are shopping for $10,000 cars this won’t be the case, but buyers in the $20,000 range will probably find a better buy with a new car over a used one.
There are two approaches to finding the right car for the right price, and it really depends on your price point. For cheaper stuff, say under $10,000, it is usually best to search in a relatively local area, unless you are looking for a rare or vintage car in which case you may need to spread the net wider.
However, if you have a bigger budget it could be worth your while to be willing to travel or perhaps even ship a car from far away.
I had a recent case where a client of mine was looking for a used 2016 Mazda Miata. There were not a ton of them in her area with the options she wanted, but a dealer out of state had a great price on a certified pre-owned model with less than 7,000 miles.
Even with the transport charges, the value ended up in her favor.
Sometimes the quality of the cars in your local area isn’t all that great. Not long ago I had a gentleman in the NYC metro looking for a used Mercedes-Benz E-Class. Most of the cars nearby had quite a bit of wear on them, having being driven in the city. But a trip out to the suburbs of Pennsylvania got him a lightly used, and well cared for example in his budget.
Purchasing a pre-owned car is risky, but it doesn’t have to be stressful. All it takes is some willingness to put in some research, legwork and diligence to know when to make the offer and when to walk away.