When buying a new vehicle is too expensive or the prospect of significant depreciation is too much to stomach, the vast used-car market is the best place to turn. Just because a pre-owned car, truck, or SUV isn't brand-spanking new doesn't mean it's without its own set of advantages. They're almost always more affordable, some come with a warranty, and many allow shoppers to get exactly what they want. Research is an important part of any vehicle purchase; buying used, whether from a dealership or a private party, requires extra investigation to ensure your prospective purchase is reliable. We've assembled this guide to help you navigate the process by identifying the pros and cons of purchasing a pre-owned vehicle and answering the questions that will inevitably arise along the way.
Is a Used Car Right For Me?
The decision to buy a used car versus a new car usually comes down to cost. Since pre-owned vehicles are cheaper than new ones, comparatively speaking, they make more sense for shoppers on a budget as well as people who are simply shrewd spenders. For instance, "nearly new" vehicles–as in pre-owned vehicles from the previous model year–typically provide several thousand dollars of savings versus an identical version from the current model year. Buying used at this point in time is particularly challenging, though, because the worldwide chip shortage has caused dealers' new-car inventories to dwindle and used-car prices to skyrocket. Still, the basics of careful shopping remain the same.
Many people who want to buy used can't afford a "nearly new" or certified pre-owned (CPO) vehicle. Luckily, there are a variety of alternatives for people who can't go either of those two routes. Not only is buying an older used car a good way to save money, but it's also a way for discerning shoppers to find a better equipped or a fancier model for less than it would've cost them new.
Certified Pre-Owned: Real or Rip-Off?
Buying a certified pre-owned (CPO) vehicle, which typically ranges between two and three years old and has relatively low mileage, is considerably more affordable than buying a brand-new version of the same model. Since CPOs come with a manufacturer-backed warranty and a thorough inspection by a factory-trained mechanic, they can provide similar peace of mind and protection from catastrophic issues as vehicles fresh off of the assembly line. CPOs are also often the only type of used vehicle that can be leased.
Most automakers have a CPO program, which means that buyers have a wide selection of models to chose from, depending on local inventory. While a CPO vehicle is more expensive than buying an equivalent non-CPO model, the added costs offset the risks, especially since some include a vehicle-return policy. However, always make sure to understand the terms as CPO programs vary among brands.
Where is Best to Buy a Used Car?
With the proliferation of used-car shopping sites–of varying quality and credibility, mind you–there are more ways than ever to buy a pre-owned vehicle. Traditionalists can always stroll into a dealership and make a purchase face-to-face if that's what they prefer. Simply put, choosing the best place to buy a used car comes down to personal preference, and that often includes the advantages and disadvantages to both buying online or in-person.
Shoppers looking to buy certified pre-owned (CPO) can visit their local dealership or the dealer's website. Online-only used-car retailers let you shop from the comfort of your home while still enjoying the benefits of their financing and trade-in offers. Less risk-averse shoppers can peruse websites such as Craigslist for a used vehicle of their liking, but this route typically requires the most research.
Choosing the Right Used Car
Once the decision to buy a used vehicle is made, your attention should turn to choosing the right one. Most importantly, the list of candidates and the final choice should be determined based on your budget. After finding a comfortably affordable price range, the search can begin by identifying the type of vehicle or focusing on specific makes and models.
The risks associated with buying a used vehicle can scare people off. And buyers with bad credit or past financial troubles can be taken advantage of. However, by avoiding predatory buy-here, pay-here (BHPH) dealers as well as understanding and preparing for the work that's involved with buying a pre-owned vehicle, the experience can be a positive one, albeit it one with varying levels of risk.
Selling Your Own Car: Trade-in Vs. Selling it Yourself
While some people are searching the used-car market for their first vehicle, many are also shopping for a replacement or an upgrade from their current wheels. Depending on the condition and value of that vehicle, dealers will allow shoppers to trade it in and apply the credit to the next vehicle purchase.
This method is often easier than selling it yourself, but it's not uncommon for used cars to sell privately for more money than they'll earn as a trade-in. It just depends on how much work the seller is willing to put in to maximize the vehicle's desirability and worth.