With the average price of used cars at a four-year low and the proliferation of certified preowned programs offered by car makers, this is a great time to be shopping for a used car. But you need to be well-prepared to get your money’s worth when you drive off the lot.
Some of the best news for used-car shoppers is that pent-up demand is driving up sales of new cars. New-car sales are rebounding strongly and Edmunds.com experts say that trend will continue next year. Plus, the number of expiring leases also is increasing. All this points to a bigger inventory of used cars.
It also means some models are sitting on the lots a bit longer, and the prices are going down. According to Edmunds.com, the average price for used cars in the third quarter was $15,617, the lowest it has been in four years.
If you’re after a Volvo, GMC or Chevrolet, then you’re in luck. According to Edmunds.com, those three brands sat on lots longer than others and therefore typically carried a lower price. But if you’re after a Honda, Toyota or Lexus, you may find an above-average price. These cars were most popular in the third quarter.
While timing and prices are important, there is also work to be done before you buy a used car, whether it’s from a dealer or an individual. Don’t just drive the car around the block. Give the car a thorough test drive on highways and hills.
Look for an inspection checklist like this used-car work sheet from DMV.org. It reminds you of all the things you need to do, like bringing a CD to test the car stereo, checking the windshield wipers, and making sure the car manual is in the glove department.
Research before you shop. Use a site like Edmunds.com, Kelley Blue Book’s KBB.com orTrueCar.com to estimate the value of the car. This will help you determine a fair price before you go into negotiations.
You may also want to research typical repair and maintenance costs for the vehicle you’re interested.
Some cars are far more expensive to fix and maintain than others, so even if you get a low price, you might still be paying big bucks in the long run. You can use calculators like Edmunds.com’s True Cost to Own feature. It calculates a variety of factors including maintenance and repairs to determine how much your vehicle will actually cost you. Also, check with your insurance company to see if your insurance will go up.
The Federal Trade Commission recommends checking an independent database service to review a vehicle’s history. They suggest the Justice Department’s National Motor Vehicle Title Information System. There is a small fee to receive a report, ranging from about $2.95 to $12.99. per report.
This service is good for more than just cars. You can find reports on buses, trucks, motorcycle, RVs, motor homes—even tractors. The report covers information about the vehicle’s title, odometer, and some damage history.
The National Insurance Crime Bureau has a free database where you enter a car’s vehicle identification number, or VIN, and can access a car’s history to see if it has been reported as a stolen but not recovered car, or a salvage vehicle. According to the NICB, the vehicles stolen the most often in 2012 were the Honda Accord, Honda Civic, Ford full-size pickup, Chevrolet full-size pickup, and Toyota Camry.
The FTC also suggests checking with a local consumer protection agency or your state’s attorney general’s office to find out if a dealer has any unresolved complaints.
The so-called Used Car Rule requires dealers to post a buyer’s guide in each used car (with the exception of dealers in Maine and Wisconsin). It must state whether a vehicle is being sold “as is” or under warranty, including how much of the repairs a dealer will cover under that warranty. Among other things, it will also tell you to have the car inspected by an independent mechanic before you purchase it. This is advice you should definitely take.
And finally, in many states you can purchase the right to a “cooling-off period.” You pay a fee based on the purchase price and if for any reason you change your mind, you have the right to bring the car back within a specified time period. Alternately, some states don’t have cooling-off periods, so check with your state’s motor vehicle department.
Emmy Award-winning broadcast journalist, documentarian and author Jeanette Pavini covers consumer and investigative news for numerous publications, radio and television. Jeanette is based in the San Francisco Bay Area.