There are a number of reasons why buying a Used car makes sense:
• Depreciation – New cars depreciate a lot. Buying a two or three year old car can save anywhere from 20% to 35% off the price of a comparable new one.
• Warranties – New cars often come with transferable warranties. Buying a used car that’s still under its new car warranty can often mean saving money on an extended service contract if it’s purchased from a franchised new car dealer.
• Certified Used Cars – Most manufacturers offer certified used cars that, while more expensive, come with extended service contracts that offer peace of mind and can be worth the cost difference.
• Quality – Today’s used cars offer the highest quality in history.
With that being said, here are some tips on what to look for:
Pricing. Prices on most used cars have leveled off and even dropped recently from historic high prices. Visit third-party pricing sites to get retail book values and use their shopping tools to adjust those values based on their condition.
Certified Pre-Owned (CPO). Certified used cars are the closest thing to new at higher used car prices. Most manufacturer programs, such as Honda, GM and Toyota include a Vehicle History Report (from AutoCheck or Carfax) and thorough mechanical inspection.
Cars sold online. Sites like AutoTrader.com and Cars.com let you compare vehicles to give you a better idea of what a fair selling price might be.
Paperwork. Review as much documentation as possible including title documents and service records and receipts.
Open recalls. According to Carfax, estimates are that 30% of all recalled cars go unfixed. Franchised new car dealers for that brand will fix any open recalls for free.
Odometer issues. Digital odometer tampering is often difficult to detect. Be sure the interior and exterior wear and tear correspond to what the odometer displays.
Flood damage. Check for any odors, corrosion, mud and dirt – especially in those hard to clean areas. Also be sure all warning lights and electrical components are working properly.
Curbstoners. Illegal dealers posing as private sellers peddle cars on the internet, along roadsides and through classified ads. These cars often have hidden problems and the seller typically cannot be found after the sale.
Professional inspection. Not something to look for but what you should have performed by both a certified master mechanic and a body and frame specialist prior to signing any sale documents.