Car shopping is on your agenda, and you’re second-guessing buying used. You’ve analyzed your budget and made a list of must-haves, and it feels like your new car options are dwindling. Budget constraints and a detailed list of desires can make buying a car feel like solving a Rubik’s Cube, but if you squash some of the myths or misconceptions you have about buying used, you’ll realize there are endless options available to you.
Myth #1 – Used Cars Are Mostly Junk
Pre-owned cars represent a lot of things; trade-ups, completed leases, repossessed property, and more. Not every car you see at the lot is a spit-shined hunk of junk. Before you rule out buying a used car, think of the many reasons someone might trade in their existing vehicle.
Common Reasons To Trade-In
Here are a few common reasons people might decide to trade in their vehicles:
- Growing families may need to trade in their sedan for a bigger car like an SUV or minivan.
- A handyman may trade in their car for a transit van or truck to use for work.
- A young couple has decided to sell everything they own to travel the world on a sailboat.
- An elderly man or woman is no longer comfortable driving.
- A new college grad is in a tight-spot and sells their car to help pay rent or tuition.
You see, there are a variety of scenarios where buying a used car could be a great score! One man’s “trash” is another man’s treasure, but in this day and age, “trash” is trendy and buying used instead of new is good for the planet. Not every used car is a hidden treasure, but they’re not all trash either. Thankfully, you can put your concerns at ease with a handy little tool called a vehicle history report.
Myth #2 – You’ll Pay More Than It’s Worth
You’ve probably heard that a new car drops in value the second it drives off the lot; this is where buying used is a pro for anyone in the market. Whoever purchased the car new, ate this drop in value for you and now all you have to worry about is knowing the true value of what you’re buying. Research is the most important things you can do before test driving a car.
Tips for Estimating the Value of a Used Car
- Google the original MSRP for the car
- Check pricing at different dealerships
- Research recalls on the vehicle
- Visit vehicle valuation sites like Kelly Blue Book
- Get a Vehicle History Report
- Get a Pre-Purchase Inspection done by a professional
Tips for Getting a Great Deal on a Used Car
- Know the true value of the car you’re interested in
- Shop around holidays when dealerships often run specials
- Look for older cars with low miles or newer cars with higher mileage
- Bring your current car to trade-in
- Buy from an owner instead of a dealer
Myth #3 – You Have To Pay Cash
It’s uncertain how this rumor came about, but financing a used car is no different than financing a new one. Paying in cash will keep you out of debt, and making a large down payment will help you save on the monthly payment and interest rate, but unless you have absolutely rotten credit, cash isn’t necessary for buying a car.
If you do come across a dealership that requires cash to buy a car, this could be a red flag. Quality car dealerships will give you a variety of options for financing your car, new or used. In fact, many dealerships will incentivize you to use in-house financing because it’s another way for them to make money.
Myth #4 – Used Cars Aren’t Safe
Not all sellers will honor an original warranty, but you will find many used car dealers will honor manufacturer warranties such as 10-year or 100,000 miles. In addition to researching recalls and pulling a vehicle history report, you can typically have an expert mechanic offer their own report on the health of the car before you purchase.
If premier safety is at the top of your must-have list, there are a variety of companies that do annual safety tests and reviews. J.D. Power releases a highly-reputable annual report with both consumer and expert reviews on cars by make and type. Edmunds is another resource car shoppers can use to research reviews and rankings from industry experts.
Myth #5 – Used Cars Have Poor Resale Value
The value of a new car drops as soon as it’s driven off the lot. For this reason, a used car will already save you some depreciation. Sales are all about supply and demand, so understanding the value of your used car can be a sharp tool for getting more out of your car. For example, hybrid or electric vehicles are trending upwards as environmental awareness grows increasingly popular and the cost of gas continues to climb.
As mentioned in Myth #1, there are many reasons people sell their cars; many want to optimize on the resale value of their vehicle by trading in while its miles are relatively low. Comfort and safety are always desirable qualities. There will always be a need for tucks for hauling and towing. Cars that pair well with unique lifestyles such as mountain biking fans or farmers maintain their value, while growing families care a great deal about third-row seating. So you see, both buying and selling used can prove highly valuable when you match the right buyer with the right car.
Myth #6 – You Can Only Get A Good Deal Online
Shopping for a car online is certainly convenient and can allow buyers to view multiple options from multiple places at once, but buying without a test drive might be best suited for those buying a new car from the manufacture. Perhaps this myth came about as an excuse for buyers to avoid confronting ambitious sales people, but it’s important to know that there are more benefits to meeting with a dealer than hiding behind a screen. For example, there could be some choices dealerships haven’t yet been listed online and you can’t “get a feel” for a digital car.