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Used Cars: Where the Bargains Are

September 20, 2017 by admin 3 Comments

Bargains on used cars are available if you know where to look.

2015 Dodge Charger SE.
2015 Dodge Charger SE.

The average price of a new car is approximately $35,000 according to Kelley Blue Book, a price point that’s well beyond the reach of many car shoppers. One way to avoid that high cost is to settle for a lower-priced model, but that may mean making sacrifices on vehicle size, quality, and comfort. Another way to avoid the high cost of a new car is to buy used, particularly cars that are two to three years old, bargains that can be found by weighing the following several important considerations.

Consideration No. 1 — Initial Depreciation

The major drawback of buying any new car is that first-year depreciation can lop 20 to 30 percent off of its vehicle’s value. That means a $36,000 new car may be worth just $25,200 after the first year, a loss that the original owner must take.

That loss should be viewed as an opportunity for used car buyers. While most owners will hold on to their cars for a few years, cars that are leased are typically returned after just two or three years. Leased cars are sometimes resold at auction, but they’re also available for sale through new car dealers to help bolster inventories.

2017 Toyota Tacoma TRD Pro.
2017 Toyota Tacoma TRD Pro.

Consideration No. 2 — Larger or Less Popular

Depreciation for more popular models comes in lower than the industry average. That means if you are looking for a bargain, you should turn your eyes elsewhere.

Elsewhere includes models that consume more fuel such as big SUVs or ones that are simply not that popular including vehicles from discontinued brands or models.

Suzuki quit selling its vehicles in the United States in 2012. The company was never a big player on the market, but it did offer several smaller models such as the SX4 that were good on gas.

You can check the market value of any used car for free by visiting Kelley Blue Book. Suzuki may no longer sell its cars in America, but it still is available to service your vehicle and to handle warranty concerns.

2015 Chevrolet Colorado.
2015 Chevrolet Colorado.

Consideration No. 3 — Wear and Tear

If you find a used car that is still under the manufacturer’s new car warranty, then you have a bonus in your hands. However, you must ensure that the warranty transfers to you and at no cost.

Other warranties that may still be in effect include rust and powertrain, the latter sometimes good for up to 100,000 miles. If you are shopping for a used hybrid vehicle, the typical warranty is for eight years or 100,000 miles on your hybrid battery system.

One model, the Hyundai Sonata Hybrid, offers a lifetime warranty, but it is not transferable to a new owner. Regardless of warranty considerations, there is a mileage point where buying a used vehicle makes sense. That point is before major repairs or expensive maintenance takes place.

Used cars that have under 50,000 miles on the odometer and have been well maintained, should go another 50,000 miles before more expensive maintenance and repairs become a factor. Still, tires are generally replaced by 50,000 miles and brakes, oil, air filters, batteries, and fluids will have been serviced or replaced. Costlier repairs such as water pumps, hoses, belts, mufflers, suspension system parts and electronic sensors can happen at any time.

Major work such as engine repair, transmission replacement or body work can usually be avoided if a car has been properly maintained. Ask the owner for car maintenance records and obtain a vehicle history report.

2015 Infiniti QX70.
2015 Infiniti QX70.

Consideration No. 4 — Consider the Seller Pool

You can find a bargain on a used car by careful shopping. Know that if you choose to buy from a dealer, you will pay the customary mark up to cover the dealer’s expenses and profits. However, you may also receive a limited warranty, something that a private seller may not be able to offer.

New car dealers stock their inventories with newer used cars to supplement their new car inventories. Used car dealers may feature newer cars to much older models. Either way, you will face the dealer’s mark up.

You can also consider a car from a rental car company. Enterprise, Hertz, and Budget are among the companies that sell off their fleets to private buyers, cars that typically have 12,000 to 50,000 miles on the odometer. You will find, however, that there is little room to negotiate on price. What you will receive is a vehicle that has been well maintained. Thus, your bargain may not be on price, but on care.

The best bargains on used cars are typically through private party sellers. These individuals are simply seeking to sell a car they no longer want or need and will price their cars accordingly. You can verify what any vehicle should fetch by checking its private party value through Kelley Blue Book or NADAGuides.com.

2016 Ford Mustang GT Convertible.
2016 Ford Mustang GT Convertible.

Used Cars: The Art of Negotiation

Your best deal on any used car can be had by negotiating the vehicle’s price. With the information you have on hand about its value, you have a good starting point for your negotiation.

Present your best offer, await the seller’s counter offer, then find a middle ground that will satisfy both parties.


See Also — 8 Steps to Buying a Used Car

Photos copyrights Auto Trends Magazine. All rights reserved.

Filed Under: Car Tips Tagged With: CHEVROLET COLORADO, Dodge Charger, Ford Mustang GT Convertible, INFINITI QX70, KBB, KELLEY BLUE BOOK, NADAGUIDES.COM, SUZUKI, Toyota Tacoma TRD Pro, USED CAR

KBB Forecasts Used Car Price Bubble

August 10, 2009 by admin 1 Comment

Used car prices will often fluctuate depending on the popularity of the vehicle as well as other factors including the price of gasoline. Indeed, in 2008 owners of compact cars saw their prices increase as gasoline topped four dollars a gallon. Getting 30 mpg on the highway is certainly advantageous when pump prices are high resulting in an increase in used car values.

Fewer Used Cars Available

cash for clunkersKelley Blue Book (KBB) is seeing another factor play in with the used car market and that factor is the federal government’s car scrappage program. Called “cash for clunkers” by consumers, the Car Allowance Rebate System (CARS) program has already removed about 250,000 used cars from the market, with an additional 500,000 slated for scrappage as the program is extended thanks to two billion dollars in additional funding.

KBB says that the clunkers program is removing used car inventory at a faster rate which means that dealers are stocking up on used car inventory while they can. This quest for used cars is pushing up prices, creating a bubble scenario.

“Dealerships have reported increased foot traffic, creating a false sense of automotive market recovery,” said Alec Gutierrez, senior analyst of vehicle valuation for Kelley Blue Book. “As a result, dealers are going to auction to restock inventory, driving up used-car values. However, the effect of a supply reduction of this magnitude could have an immense impact on these values in the short-term, exacerbating the already-limited supply at auction. If this bubble comes to pass, dealerships will end up with excess inventory of both new and used vehicles and be forced to offer deep discounts to remove surplus inventory, driving values down. Ultimately, there will be the possibility of a severe contraction in auto sales as soon as the Cash for Clunkers program runs out of funding.”

Most Sought After Brands For New Car Buyers

KBB also found out in a recent survey that one in ten car shoppers have moved up their new car purchase thanks to CARS. The top brands being considered by people turning in their clunkers are Toyota, Ford, and Chevrolet.

The federal government’s program was supposed to end on November 1st or when funds ran out, but with only one billion dollars in initial funding, CARS was quickly overwhelmed by customers thanks to pent-up demand and huge deals on new cars.


See Also — Cash For Clunkers Doesn’t Go Far Enough

Filed Under: Automotive News Tagged With: Alec Gutierrez, CASH FOR CLUNKERS, Chevrolet, Ford, KBB, KELLEY BLUE BOOK

Beware of Flood-Damaged Cars!

September 3, 2008 by admin 1 Comment

Every month, thousands of flood-damaged cars are sold without that information known to the buyer.

Be On The Look Out For Storm-Ravaged Vehicles

In the aftermath of hurricanes Katrina and Rita, tens of thousands of cars were scrapped, as they were deemed damaged beyond repair by flood waters, wind, or other storm-related insults. Some reports put that Ford Fiestanumber at 250,000 vehicles, which represented cars registered to owners in Florida, Alabama, Mississippi, Louisiana, Texas, and the adjoining states.

Flood-Damaged Cars Retitled

Though most of these vehicles were hauled away and the titles changed to reflect that they had been totaled, in some cases these same cars were bought, retitled in other states, and offered for sale.

Unsuspecting buyers who were thinking that they were getting a quality used car, eventually learned that they were storm-ravaged, thanks to rusting body panels, foul odors, malfunctioning components, and a host of other ills that only surfaced after they made their purchase.

It has been several years since America was ravaged by some of these storms, but the warning about flood-damaged cars remains in place. Historic flooding in the Upper Midwest in 2008, in the South in 2010 and along the east coast in 2017 and later has yielded a bumper crop of damaged vehicles. The same post-Katrina scenario is once again rearing its ugly head: cars that were once totaled by insurers are back on the market and available for purchase.

How To Avoid The Scam

Car buyers should be alert to this scam in order to avoid being ripped off.

There are several tools at your disposal to help you avoid being conned, three of which can save you from plenty of grief:

1. Check KBB – Kelley Blue Book at www.kbb.com maintains pricing for thousands of used car models going back for well over a decade. There is one thing common about most flood-damaged cars: they are often priced below market levels. This should be a concern to you as a quality used car should retail close to what KBB says it is worth.

2. Obtain a Vehicle History Report – AutoCheck and Carfax are two of the more noteworthy companies that prepare vehicle-specific history reports. Thus, it is a good idea to buy one related to the vehicle you are considering. Here’s something to keep in mind: although these reports can be helpful, they are not perfect and they do not offer a guarantee for a vehicle’s condition.

3. See Your Mechanic – Always insist on a car inspection from your own mechanic. He’ll know what to look for, including especially troubling signs such as water damage, engine wear, transmission problems, brake and exhaust trouble, as well as electrical and engineering issues.

If It Sounds Too Good To Be True…

With any used car purchase the maxim, “if it sounds too good to be true, then it probably isn’t,” is the best approach when buying any vehicle. Certainly, you want to get the best price for a used car, but not at the expense of your wallet or your safety. Flood-damaged cars have a short lifespan and could put you and your family in harm’s way if an important part suddenly fails.


See Also — How to Check for Flood-Damaged Cars

Filed Under: Automotive News Tagged With: CAR TITLE, Flood, flood-damage cars, hurricanes, KBB

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