Vehicles are considerable investments. According to Kelley Blue Book, the estimated average transaction price for light vehicles in early 2018 was $36,270.
Perhaps because of that price tag, many people in the market for cars and trucks shop for preowned vehicles, which statistics indicate are considerably less expensive than new automobiles. Edmunds.com notes that the average transaction price for a used vehicle purchased in the first quarter of 2018 was $19,700.
Of course, preowned vehicles carry more risk than new cars. That said, car buyers in the market for preowned vehicles can take steps to protect themselves against the risks associated with buying used cars.
- Shop for certified preowned vehicles. Certified preowned vehicles, or CPOs, typically come with an inspection and extended warranty. That can ease the concerns of buyers worried about buying a lemon. Many CPOs are recently returned off-lease vehicles that tend to have low mileage. Lessees are obligated to return leased vehicles in good condition or suffer financial penalties, meaning most off-lease vehicles will be well-maintained.
- Recognize “certified” and “CPO” are not the same thing. Edmunds.com notes that there’s sometimes a difference between vehicles that are characterized as “certified” and “certified preowned.” The CPO designation typically means the vehicle manufacturer stands behind the vehicle and its warranty. A vehicle described as “certified” many only be backed by the dealership itself. That’s an important distinction for buyers who may travel a lot or those who plan to move, as a manufacturer-backed warranty should allow them to take the vehicle to any of the manufacturer’s dealerships for repairs, regardless of where those dealerships are located. Drivers of vehicles that are only certified by a dealership may only be able to take their cars in for repairs at that particular dealership.
- Get a vehicle history report. Some sellers, whether it’s dealerships or private citizens, may provide vehicle history reports. But even if they don’t, the cost of such reports is negligible compared to the value of the information they provide. These reports indicate if a vehicle has been in any serious accidents and indicate mileage that can alert buyers to illegal odometer adjustments, and some may even indicate if maintenance was performed at manufacturer-recommended intervals. If sellers are reluctant to provide reports or the VIN numbers of a vehicle necessary to order them, then walk away.
- Take a long test drive. A long test drive through various conditions (hills, curvy roads, highways, etc.) can give buyers a feel of how a preowned vehicle handles. Don’t succumb to pressure to cut test drives short, and be wary of sellers who want to keep test drives to a minimum.
Preowned vehicles can be great investments, especially when buyers take steps to make the most informed decisions possible.