TIPS
Buying a used vehicle can save a lot of money as almost all vehicles depreciate with time and use. Most vehicles lose the greatest value or suffer the highest rate of depreciation after being titled initially by the first individual purchaser. Often vehicles can lose 50% of their original value during the first two years after purchase. As a vehicle loses value due to time and use the rate of depreciation declines.
Many consumers choose to let someone else take the initial depreciation loss and buy only used cars. Doing so, they not only purchase the car a great initial savings but the future rate of depreciation is expected to be less than on newer vehicles.
But there are always trade offs.
Purchasing a used car is always a greater risk for the consumer than purchasing a new vehicle from a franchised representative of the manufacturer. You save money but you assume risks.
You can reduce those risks, save money and get what you want with a little homework.
Over the last ten years, free research information has been made available free on the internet to anyone who will spend just a few hours.
If you don't feel you have the time, interest or ability to understand the process then chose someone you trust to do the research for you. You can always use a PERSONAL SHOPPER but some of the following resources will help you make you an informed and happy owner of a used vehicle at great savings.
Good Basic Advice:
Federal Trade Commission Article
This is a "must read" article giving good basic information about payment options, warranties advice on inspecting a vehicle.
Edmunds
Long considered a leading advice center for researching both new and used vehicles. Remember all commercial websites have a profit motive necessary to keep them in business. Always keep an open mind when a referral is made.
CARFAX
Arguably the best public database available, containing over 3 billion records using the unique 17 digit Vehicle Identification Number to produce a detailed history report for any car or light truck. Never buy a used vehicle without viewing a full CARFAX Vehicle History Report.
Value the car I want to buy or sell
Kelly Blue Book
You have heard the question, "what's the blue book on my car"? Well here it is. Now in electronic form the Kelly Blue Book provides new and used vehicle pricing as well as buying advice and ratings. When valuing a Used Vehicle, prices are expressed as Trade-in, Retail and Private Party values. I find the Trade-in fairly close if not just a little lower than the true value for a vehicle. The Retail value is completely worthless as it is used to solely to justify an astronomically high asking price.
For instance, on the day that I checked the value for a two year old Taurus, Kelly Blue Book said that there was a $4,670 difference between what the average dealer would give for a car on trade and what they would sell it for. This leads the consumer to believe that the average dealer will make between $4,000 and $5,000 profit on a used car! This is not true. Not that a dealer wouldn't mind making that type of profit, but most dealers operate on a much closer margin.
Kelly Blue Book Trade-in and Private Party values should be used only as one guide in your total research.
NADA Guides (National Automobile Dealers Association)
Sometimes a reality check is needed and the yellow book of car values is a good resource. I have often found the average trade-in values of NADA to be slightly higher that the actual wholesale market in this area. So don't be offended if a dealer will not pay you what the NADA book says your vehicle is worth.
The most important aspect of appraisal is to accurately classify a car. If tires are worn, paint is faded and scratched and the windshield is cracked, the car is not in average condition.
Your failure to accurately assess your car does not mean the dealership is trying to "steal" your trade-in. Remember the only true value of a vehicle is what someone will write you a check for, not what a book tells you the car is worth.
Edmunds.com
Long recognized as a leading source of automotive information on the internet, Edmunds offers tremendous advice and reviews in addition to suggested pricing. Interactive forums and ratings from consumers give insight into the reliability of particular models.
The Black Book
In the Midwest, dealers live and die by their little "Black Book" stuffed into their shirt pocket. Available only by paid subscription, the Black Book publishes weekly and uses auction results to anticipate trends in the market. Wholesale values are classified as Extra Clean, Clean, Average and Rough. Considerable skill is required to accurately classify the condition of a used vehicle, estimate reconditioning costs and anticipate weekly market trends.
Results of Wholesale Auctions
Actual sale prices at the weekly Auto Auctions may be an accurate refection of current wholesale price trends but raw data is unavailable to the general public. This data is collected and fuels the various price guides such as the Black Book. Auction prices trend on a weekly basis and can be somewhat misleading due to needs of individual bidders.
Appraisals and Dealer Buy Bids
The most accurate method of ascertaining the true wholesale value of a vehicle is to obtain a "buy bid" from a local dealer. If you have a late model vehicle with less than 100,000 miles simply speak to the used car manager of a dealership representing the make you have or a used car dealer specializing in your type of vehicle. If you have an older, high mileage vehicle, the only buyers might be second-chance or smaller used car lots.
Remember these are "wholesale" or "buy-bid" prices. Dealers will often spend hundreds of dollars reconditioning, cleaning and marketing each vehicle, therefore the "retail" price will be significantly higher that what they will purchase a vehicle.
Sources for finding the right vehicle
Used Car Departments of New Car Dealerships
One of the best places to find a used car is the used department of a franchised new car dealership. Dealers will always keep the best vehicles of their brand that are traded directly by owners. However some dealers also buy vehicles at auction and from independent wholesalers who make a living buying and selling cars between retail dealers.
Many new car dealers often do not keep high mileage or lower valued vehicles on their lot. While this is an excellent source of vehicles, buyers must use the same level of due diligence that they would from any other source.
KCAUTOSOURCE lists the website of every new car dealership in the area. Many of these web site have their inventory with photos listed.
Used Car Dealerships
Used car dealers often specialize in a market segment. Some offer late model vehicles inspected, reconditioned and detailed to near showroom quality at a considerable savings over a new vehicle. Some dealers specialize in credit challenged individuals. As in any business you will find a variety of ethics, concern and professionalism, but for the most part, used car dealers are honest businessmen that cannot remain in business without satisfied customers.
Don't be afraid to walk away from any deal or dealership that you feel uncomfortable with. In the used car market, there is always a "good deal" to be had by a good dealer.
Private Owners
Many people falsely assume that buying a vehicle direct from an individual is safer than purchasing a vehicle from a licensed professional dealership. Actually, unless the individual is a trusted relative (and then you can't be too sure), dealers always have more to lose than an individual who places a car on the curb or buys a one-time newspaper classified.
Use extreme caution when buying a vehicle from an individual.
Auctions
Kansas City Star's online listings on Cars.com
Auto Trader
Hemmings.com
Ebay Motors.com
