Used cars vs. certified pre-owned
When it comes to shopping for a used car, are certified pre-owned (CPO) examples better than non-CPO? As always, your mileage may vary. CPO cars are subject to a more thorough inspection by the dealer and often offer an extended warranty period. They may also come with special incentives, attractive financing and even roadside assistance. On the other hand, CPO cars are typically more expensive than non-CPO cars, and dealers may be loath to negotiate.
By comparison, non-CPO cars tend to be abundant and less expensive, with more room to negotiate on price. The caveat here, of course, is that these cars are likely to be older and have more miles. Conditions will range from "great" to "fair," the car comes "as-is," and you may even consider spending money on a pre-purchase inspection to guard against short-term surprises.
Dealership or private party
When shopping for a used car, is it better to buy from a dealer? A Craigslist stranger? The proverbial little old lady whose 20-year-old sedan is in pristine shape after only being driven 2,500 miles a year? Buying from a dealer often means a wider selection, a free history report and easier financing. It's also more straightforward to resolve potential problems by following the dealer's chain of command.
On the other hand, you'll tend to pay more at the dealership, and independent dealers can also be hit-or-miss when it comes to follow-up service. You'll probably find it easier to negotiate with a private seller, who can also discuss the car's history and who won't need to factor business costs into the transaction. But the buyer must verify the condition of the car because there's no warranty in this arrangement. Since there's also no financing, you'll also need to come up with the full price unless you can secure third-party financing. Furthermore, you'll need to beware of scams and sellers just looking to flip cars quickly.
Tips for buying a used car
Buying a used car needn't be confusing or intimidating. Here are some helpful tips if you're considering taking the plunge.
• Before committing to buying a lightly used car, compare its price to that of a brand-new version. Rebates or end-of-season deals may reduce the price of a new car to an irresistibly low level.
• The "asking price" is just that: the amount the seller asks for the car, knowing that it might not be the full price that's eventually paid. That goes for dealerships, too. If your research suggests that a dealer is asking too much for a car, then, by all means, make a substantially lower offer and see what happens. It could be the start of a profitable conversation for you.
• When car salespeople negotiate price, they don't typically include sales tax or various dealer fees. Before agreeing to a deal, ask for the "out-the-door" price so you know exactly what additional fees you will have to pay.
• Factor in extended warranty costs, interest costs and maintenance costs to the total cost of your car.
• Get a vehicle history report for any car you're seriously interested in buying.
• Ask a dealership service department or a trusted independent mechanic if service visits will be expensive for the car you want to buy. Also, consider downloading a service manual for the car to price out recommended services.
• Conventional wisdom says that buyers should avoid used rental cars because they've been abused by drivers, which may be true in many cases. But our used-car experts on staff suggest considering them anyway. You might find a diamond in the rough for a great price.