Many used cars bought from a dealer have been "remarketed"
by James M. Flammang
Making decisions in a matter of seconds isn't easy. Yet, that's what buyers at the nation's wholesale used-car auctions do every day. At the auctions, which normally are open only to dealer representatives, the action is fast and the rewards are risky. Pay too much for a tempting car that's going through the line, and you might not make any money on it. Bid too little and you won't get the car at all, giving your dealership one less vehicle to sell at a profit.
To an uninitiated observer, the ceaseless, rapid-fire cries of the used-car auctioneer sound like gibberish. But to each of the hundreds of buyers attending a typical big auction, those pleas for bids are an endless flow of opportunity.
Buyer Beware?
In the consumer's eyes, auctions still suffer from a serious image problem. The best used car, we've been told repeatedly, is the one that comes directly from a private seller: a one-owner, seldom-driven, nearly spotless vehicle that the owner is willing to part with for a pittance. Cars that went through an auction have been viewed as the dregs of the business—the vehicles that should be avoided at all costs.
Auctions, in effect, were held responsible for the sins committed by unscrupulous used-car dealers, who marketed shoddy products at high prices. That sort of stigma persists today, even though the auction business is booming and its practitioners have been striving for years to change people's perceptions of how auctions work.
Odometer Rollbacks
Although dishonest used-car dealers have not disappeared, their numbers have been diminishing—due in part to policing of the business by the large auction groups. In the mid-1980s, for instance, ADT Automotive—then a top auction chain—played a role in making odometer "rollbacks" a federal crime.
Protecting consumers wasn't their sole reason for wanting to crack down on odometer "spinners." Dealers, too, can be victimized when odometers are set back to display lower figures. If a bidding dealer thinks a car has lower mileage than it actually has, and therefore pays more than the car is worth, potential profit can disappear if the inaccuracy is discovered.
Late in the 1990s, ADT also initiated a program for certifying vehicles that go through the auctions, following the theme of used-car certification programs that had been introduced by many automakers. Vehicles are carefully inspected before sale to dealers, who can then point to that process as a selling point on their retail lots. Certification remained active when ADT Automotive was bought by Manheim Auctions in 2000. Even when full certification is not offered, auctions often offer reconditioning and detailing services.
Manheim and ADESA are the leading auction chains, providing what are called "remarketing" services. In business for 55 years, Manheim alone operates 83 auction facilities in the U.S.
During 2000, new-vehicle sales set a record at 17.4 million units—15.1 million of them sold to private individuals. At the same time, dealers, according to Tom Webb, Mahheim's chief economist, sold 41.7 million used vehicles. Private transactions added another 10.5 million secondhand units to the mix.
Auctions handled nine million of those used vehicles. Nearly half had been consigned by dealers, while two million were consumer-leased vehicles being remarketed after their lease terms ended. The remaining 3 million came directly from manufacturers, offered at sales limited to franchised new-car dealers, or from daily rental companies and fleet organizations.
Of all the vehicles that go off-lease each year, about 62% are remarketed through auctions, according to research by CNW Marketing and Manheim. They wind up in the front lines at both new-car and independent used-car dealerships. During 2000, the National Automobile Dealers Association (NADA) reports that franchised new-car dealers obtained 32% of their used vehicles from an auction, versus 40% that were traded in on a new model and 22% traded on a newer used car. A title search should reveal if the vehicle was ever on the auction block.
Recession-Resistant
Auctions "have increased their acceptance in the marketplace," said Thomas Kontos, vice president of industry relations & analytical services at ADESA Corporation, who considers the business to be "recession-resistant." If the economic downturn continues through 2001, new-car sales are sure to suffer. "During a recession," Kontos explained, "consumers are less likely to sell their vehicles," preferring to hang onto them a while longer. At the same time, though, the demand for secondhand vehicles escalates—and the auctions are happy to comply.
While it always pays to be wary when shopping for a used car, the mere fact that a prospective purchase went through an auction at some point doesn't automatically consign it to the also-ran category. After all, the car could have been returned from lease by your neighbor, then remarketed via an auction. And who knows, you might even be able to buy it for less than your neighbor would have wanted for
Showing posts with label used cars. Show all posts
Showing posts with label used cars. Show all posts
Thursday, July 5, 2007
Thursday, May 24, 2007
Keep Your Old Clunker or Buy a New Car?
It may clang and bang, but your despised old car may be the best bargain around.
By Des Toups
Let's divide the car-buying universe into two camps: those who keep a car until it drops, and those who think a new car will change their lives.
To the first, a round of applause. There's nothing short of the bus that's cheaper than keeping a car until it crumbles into a pile of rust. Almost any car can be nursed to 200,000 miles without endangering your life, and even a new engine is cheaper than all but the cheapest used cars.
To the second, another round of applause, because the 16 million or so new cars they buy every year instantly become used cars soon available at a considerable discount to those in Camp 1. And a moment of silence, because a new car will change their lives in ways they never foresaw on the dealer's lot.
If you're in a drive-until-the-muffler-is-dragging wannabe, read on. We'll look at ways to keep your car on the road longer and realistically weigh the costs of upgrading.
I'd love to keep my old car, but …
It no longer fits my life. You may have taken up gardening in a big way but still own a Corvette. You may feel nervous about taking your '78 Ford on a trip to Colorado. Your little Accord may be a tight squeeze when family comes to town. The answer to all: Rent. Why buy a gas-sucking pickup because you visit Home Depot twice a year or a $30,000 sport-utility because you take the kids skiing for a week at Easter? Even at $100 a weekend, renting is far cheaper than a car payment. Plus you get to drive the very latest without worrying about insurance, license tags, maintenance or depreciation. Or try swapping cars with a friend, returning it gassed-up and clean (with the oil changed, too, if the loan was more than a day or two. You want to be able to ask again next year.).
Those repair bills are really adding up. Then do the math. Does the cost of repairs exceed the cost of a new car? A typical new car is $21,000, about $350 a month for five years after 20% down. A rebuilt transmission might run $1,500, a huge outlay in one chunk, but far less than the $4,200 a year you'd spend on new-car payments alone. If you can't afford repairs twice a year, it's unlikely you can afford a new car payment every month. In any case, anybody with a car older than three years should be tucking aside $50 a month for repairs and maintenance. If the gods smile, you'll never use most of it and you'll have a tidy sum to blow on your next car.
I'm nervous driving an older car. Maybe little things are beginning to go: a new thermostat one month, a starter the next. You might simply spend $50 on a AAA membership and carry a cell phone, reminding yourself that even new cars aren't immune to mechanical failure. The upside of frequent breakdowns is that you'll get to know mechanics quite well. Find one you like. Flatter him. Pay your bills on time. And the next time he fixes your car, ask him to take a few minutes to see what else will need repair soon.
The repair costs more than the car is worth. A $1,500 engine rebuild that keeps your '83 Toyota on the road still makes good financial sense. It's at this point, however, that all but the flintiest drivers begin to think about upgrading.
Which brings us to our next question:
Am I ready for a newer car?
Your first step is to do nothing except write a check to yourself in the amount you're thinking you can afford every month. Put aside a car payment every month for three months (long enough for at least one of life's little emergencies to crop up).
To pass the time, make three phone calls: one to your bank, to find out what kind of rates they charge on loans to people with your credit history; one to your insurer, to ask the rates for comprehensive insurance on a model you think you'd like to buy; and one to your local DMV, to see what registration and licensing would cost.
At the end of three months, ask yourself these questions:
How much did it hurt? If you skimped at all on other bills or shorted the amount of the payment, you're not ready.
Would I have enough left over to pay for insurance and licensing fees each year?
Would I pay this much every month for the car that's in my driveway already? Sooner or later, every new car becomes an old car, and you'll feel about the next car just the way you do about your old clunker.
Would I rather have the cash? Our typical car payment, $350, adds up to more than $1,000 in just three short months. Perhaps you'd prefer to get a tan in Mexico and limp along with ol' Betsy another year.
Could I continue to save for another year and simply pay cash? Five grand would buy any of hundreds of reliable used models. Save for two years and you're in new-car territory, if your old car will fetch a few thousand.
If the craving for a shinier car hasn't passed in three months, at least you begin the shopping process with a few months' worth of car payments and a more realistic idea of the hit your wallet will take.
Side note: Never skimp on maintenance
Pay special attention to the things that will cost you a fortune if they break. That means regular oil changes, tire rotations and transmission tune-ups, even if the car is running fine. Timing belts, for example, are spendy at as much as $600, and replacing one for no other reason than that the odometer has turned 90,000 miles might seem wasteful. But let one break and you'll find that repairing bent valves could cost you three times that. Replacing torn CV boots, those plastic housings that keep grime and grit out of the car's constant-velocity joints, costs about a third as much as a CV joint repair. (If your owner's manual is long gone, MSN Autos has a free online service, My Car, that tracks your car's service schedule.)
Des Toups is senior editor at MSN Money in Seattle.
By Des Toups
Let's divide the car-buying universe into two camps: those who keep a car until it drops, and those who think a new car will change their lives.
To the first, a round of applause. There's nothing short of the bus that's cheaper than keeping a car until it crumbles into a pile of rust. Almost any car can be nursed to 200,000 miles without endangering your life, and even a new engine is cheaper than all but the cheapest used cars.
To the second, another round of applause, because the 16 million or so new cars they buy every year instantly become used cars soon available at a considerable discount to those in Camp 1. And a moment of silence, because a new car will change their lives in ways they never foresaw on the dealer's lot.
If you're in a drive-until-the-muffler-is-dragging wannabe, read on. We'll look at ways to keep your car on the road longer and realistically weigh the costs of upgrading.
I'd love to keep my old car, but …
It no longer fits my life. You may have taken up gardening in a big way but still own a Corvette. You may feel nervous about taking your '78 Ford on a trip to Colorado. Your little Accord may be a tight squeeze when family comes to town. The answer to all: Rent. Why buy a gas-sucking pickup because you visit Home Depot twice a year or a $30,000 sport-utility because you take the kids skiing for a week at Easter? Even at $100 a weekend, renting is far cheaper than a car payment. Plus you get to drive the very latest without worrying about insurance, license tags, maintenance or depreciation. Or try swapping cars with a friend, returning it gassed-up and clean (with the oil changed, too, if the loan was more than a day or two. You want to be able to ask again next year.).
Those repair bills are really adding up. Then do the math. Does the cost of repairs exceed the cost of a new car? A typical new car is $21,000, about $350 a month for five years after 20% down. A rebuilt transmission might run $1,500, a huge outlay in one chunk, but far less than the $4,200 a year you'd spend on new-car payments alone. If you can't afford repairs twice a year, it's unlikely you can afford a new car payment every month. In any case, anybody with a car older than three years should be tucking aside $50 a month for repairs and maintenance. If the gods smile, you'll never use most of it and you'll have a tidy sum to blow on your next car.
I'm nervous driving an older car. Maybe little things are beginning to go: a new thermostat one month, a starter the next. You might simply spend $50 on a AAA membership and carry a cell phone, reminding yourself that even new cars aren't immune to mechanical failure. The upside of frequent breakdowns is that you'll get to know mechanics quite well. Find one you like. Flatter him. Pay your bills on time. And the next time he fixes your car, ask him to take a few minutes to see what else will need repair soon.
The repair costs more than the car is worth. A $1,500 engine rebuild that keeps your '83 Toyota on the road still makes good financial sense. It's at this point, however, that all but the flintiest drivers begin to think about upgrading.
Which brings us to our next question:
Am I ready for a newer car?
Your first step is to do nothing except write a check to yourself in the amount you're thinking you can afford every month. Put aside a car payment every month for three months (long enough for at least one of life's little emergencies to crop up).
To pass the time, make three phone calls: one to your bank, to find out what kind of rates they charge on loans to people with your credit history; one to your insurer, to ask the rates for comprehensive insurance on a model you think you'd like to buy; and one to your local DMV, to see what registration and licensing would cost.
At the end of three months, ask yourself these questions:
How much did it hurt? If you skimped at all on other bills or shorted the amount of the payment, you're not ready.
Would I have enough left over to pay for insurance and licensing fees each year?
Would I pay this much every month for the car that's in my driveway already? Sooner or later, every new car becomes an old car, and you'll feel about the next car just the way you do about your old clunker.
Would I rather have the cash? Our typical car payment, $350, adds up to more than $1,000 in just three short months. Perhaps you'd prefer to get a tan in Mexico and limp along with ol' Betsy another year.
Could I continue to save for another year and simply pay cash? Five grand would buy any of hundreds of reliable used models. Save for two years and you're in new-car territory, if your old car will fetch a few thousand.
If the craving for a shinier car hasn't passed in three months, at least you begin the shopping process with a few months' worth of car payments and a more realistic idea of the hit your wallet will take.
Side note: Never skimp on maintenance
Pay special attention to the things that will cost you a fortune if they break. That means regular oil changes, tire rotations and transmission tune-ups, even if the car is running fine. Timing belts, for example, are spendy at as much as $600, and replacing one for no other reason than that the odometer has turned 90,000 miles might seem wasteful. But let one break and you'll find that repairing bent valves could cost you three times that. Replacing torn CV boots, those plastic housings that keep grime and grit out of the car's constant-velocity joints, costs about a third as much as a CV joint repair. (If your owner's manual is long gone, MSN Autos has a free online service, My Car, that tracks your car's service schedule.)
Des Toups is senior editor at MSN Money in Seattle.
20 Ways You Waste Money on Your Car!
Don't spend a nickel without a darned good reason. Bone up, wise up and don't let anyone lead you astray.
By Des Toups
Cars make us irrational. We call them our babies and lovingly wax them every Saturday -- or we turn up the radio to drown out the sound of a dragging muffler. Either mindset will cost you money, sometimes a lot of it.
Walking the line between obsession and neglect means you never spend a nickel without a good reason -- and good reasons can include spending money on something that’s not broken.
Here, then, are 20 ways you waste money on your car.
Premium gas instead of regular. Buy the cheapest gasoline that doesn’t make your car engine knock. All octane does is prevent knock; a grade higher than the maker of your car recommends is not a “treat.”
3,000-mile oil changes. Manufacturers typically suggest 5,000 miles, 7,500 miles or even longer intervals between oil changes (many car markers now include oil-life monitors that tell you when the oil is dirty -- sometimes as long as 15,000 miles.) There may be two recommendations for oil-change intervals: one for normal driving and one for hard use. If you live in a cold climate, take mostly very short trips, tow a trailer or have a high-revving, high-performance engine, use the more aggressive schedule. If you seldom drive your car, go by the calendar rather than your odometer. Twice a year changes are the minimum.
Taking false economies. Better to replace a timing belt on the manufacturer’s schedule than to have it break somewhere in western Nebraska. Better to pop for snow tires than to ride that low-profile rubber right into a tree.
Using the dealer’s maintenance schedule instead of the factory’s. Of course he thinks you should have a major tune-up every 30,000 miles. Most of the tasks that we generally think of under the heading of “tune-up” are now handled electronically. Stick to the manufacturer’s schedule unless your car is not running well. If your engine doesn't "miss" -- skip a beat or make other odd noises -- don’t change the spark plugs or wires until the manufacturer says so.
Using a dealer for major services. Independent shops almost always will do the same work much cheaper. Call around, owner’s manual in hand, to find out, mindful that the quality of the work is more of a question mark. Some dealers may tell you using outside garages violates the car’s warranty. This is a lie.
Using a dealer for oil changes. Dealers sometimes run dirt-cheap specials, but otherwise you’ll usually find changes cheaper elsewhere. If you’re using an independent shop for the first time, you might inconspicuously mark your old oil filter to make sure it has indeed been changed. And don’t let them talk you into new wiper blades, new air filters or high-priced synthetic oil, unless your car is one of the few high-performance machines built for it.
Not replacing your air filter and wiper blades yourself. Buy them on sale at a discount auto-parts store rather than having a garage or dealer replace them. Replacement is simple for either part, a 5-minute job. A good schedule for new air filters is every other oil change in a dusty climate; elsewhere at least once every 20,000 miles. Treat yourself to new wipers (it’s easiest to buy the whole blade, not the refill) once a year.
Going to any old repair shop. At the very least, make sure it’s ASE-certified (a good housekeeping seal of approval from the nonprofit National Institute for Automotive Service Excellence). From there, look for a well-kept shop with someone who’s willing to answer all your questions. Estimates must include a provision that no extra work will be done without your approval. Drive your car to make sure the problem is fixed before you pay. Pay with a credit card in case there’s a dispute later. Be courteous and pay attention. A good mechanic is hard to find.
Changing your antifreeze every winter. Change it only when a hydrometer suggests it will no longer withstand temperatures 30 degrees below the coldest your area sees in winter. Your dealer or oil-change shop should be happy to check it for free. Every two years is about right. But you also should keep your cooling system happy by running the air conditioner every few weeks in winter to keep it lubricated, checking for puddles underneath the car and replacing belts and hoses before they dry and crack.
Replacing tires when you should be replacing shocks. If your tires are wearing unevenly or peculiarly, your car may be out of alignment or your shocks or struts worn out.
Letting a brake squeal turn into a brake job. Squeal doesn’t necessarily mean you need new rotors or pads; mostly, it’s just annoying. Your first check -- you can probably see your front brakes through the wheels on your car -- is to look at the thickness of the pads. Pads thicker than a quarter-inch are probably fine. If your brakes emit a constant, high-pitched whine and the pads are thinner than a quarter-inch, replace them. If your car shimmies or you feel grinding through the pedal, then your brake rotors need to be turned or replaced.
Not complaining when your warranty claim is rejected. Check Alldata and the National Highway Transportation Safety Administration (NHTSA) to see if a technical service bulletin (TSB) has been issued about the component in question. Manufacturers often will repair known defects outside the warranty period (sometimes called a secret warranty). It helps if you’ve done your homework and haven’t been a jerk.
Not keeping records. A logbook of every repair done to your car can help you decide if something’s seriously out of whack. Didn’t I just buy new brake pads? With a log and an envelope stuffed with receipts, you’ll know who did the work and when, and whether or not there’s a warranty on the repair. And a service logbook helps at resale time, too.
Buying an extended warranty. Most manufacturers allow you to wait until just before the regular warranty expires to decide. By then you should know whether your car is troublesome enough to require the extended warranty. Most of them aren’t worth the price.
Overinsuring. Never skimp on liability, but why buy collision and comprehensive insurance on a junker you can probably afford to replace? Add your deductible to your yearly bill for collision and comprehensive coverage, then compare that total with the wholesale value of the car. If it’s more than half, reconsider.
Assuming the problem is major. If your car is overheating but you don’t see a busted hose or lots of steam, it might be the $5 thermostat, not your radiator. Or it may be that ominous “check engine” light itself that’s failed, not your alternator.
Not changing the fuel filter. Have it replaced as a part of your maintenance -- every two years or according to the manufacturer’s schedule -- rather than when it becomes clogged with grit, leaving you at the mercy of the nearest garage.
Not knowing how to change a tire. Have you even looked at your spare? Make sure it’s up to snuff and all the parts of your jack are there. Changing a flat yourself is not only cheaper, it’s faster, too.
Not keeping your tires properly inflated. Check them once a month; otherwise, you’re wasting gasoline, risking a blowout and wearing them out more quickly.
Car washes. Ten bucks for long lines and gray water? Nothing shows you care like doing it yourself.
By Des Toups
Cars make us irrational. We call them our babies and lovingly wax them every Saturday -- or we turn up the radio to drown out the sound of a dragging muffler. Either mindset will cost you money, sometimes a lot of it.
Walking the line between obsession and neglect means you never spend a nickel without a good reason -- and good reasons can include spending money on something that’s not broken.
Here, then, are 20 ways you waste money on your car.
Premium gas instead of regular. Buy the cheapest gasoline that doesn’t make your car engine knock. All octane does is prevent knock; a grade higher than the maker of your car recommends is not a “treat.”
3,000-mile oil changes. Manufacturers typically suggest 5,000 miles, 7,500 miles or even longer intervals between oil changes (many car markers now include oil-life monitors that tell you when the oil is dirty -- sometimes as long as 15,000 miles.) There may be two recommendations for oil-change intervals: one for normal driving and one for hard use. If you live in a cold climate, take mostly very short trips, tow a trailer or have a high-revving, high-performance engine, use the more aggressive schedule. If you seldom drive your car, go by the calendar rather than your odometer. Twice a year changes are the minimum.
Taking false economies. Better to replace a timing belt on the manufacturer’s schedule than to have it break somewhere in western Nebraska. Better to pop for snow tires than to ride that low-profile rubber right into a tree.
Using the dealer’s maintenance schedule instead of the factory’s. Of course he thinks you should have a major tune-up every 30,000 miles. Most of the tasks that we generally think of under the heading of “tune-up” are now handled electronically. Stick to the manufacturer’s schedule unless your car is not running well. If your engine doesn't "miss" -- skip a beat or make other odd noises -- don’t change the spark plugs or wires until the manufacturer says so.
Using a dealer for major services. Independent shops almost always will do the same work much cheaper. Call around, owner’s manual in hand, to find out, mindful that the quality of the work is more of a question mark. Some dealers may tell you using outside garages violates the car’s warranty. This is a lie.
Using a dealer for oil changes. Dealers sometimes run dirt-cheap specials, but otherwise you’ll usually find changes cheaper elsewhere. If you’re using an independent shop for the first time, you might inconspicuously mark your old oil filter to make sure it has indeed been changed. And don’t let them talk you into new wiper blades, new air filters or high-priced synthetic oil, unless your car is one of the few high-performance machines built for it.
Not replacing your air filter and wiper blades yourself. Buy them on sale at a discount auto-parts store rather than having a garage or dealer replace them. Replacement is simple for either part, a 5-minute job. A good schedule for new air filters is every other oil change in a dusty climate; elsewhere at least once every 20,000 miles. Treat yourself to new wipers (it’s easiest to buy the whole blade, not the refill) once a year.
Going to any old repair shop. At the very least, make sure it’s ASE-certified (a good housekeeping seal of approval from the nonprofit National Institute for Automotive Service Excellence). From there, look for a well-kept shop with someone who’s willing to answer all your questions. Estimates must include a provision that no extra work will be done without your approval. Drive your car to make sure the problem is fixed before you pay. Pay with a credit card in case there’s a dispute later. Be courteous and pay attention. A good mechanic is hard to find.
Changing your antifreeze every winter. Change it only when a hydrometer suggests it will no longer withstand temperatures 30 degrees below the coldest your area sees in winter. Your dealer or oil-change shop should be happy to check it for free. Every two years is about right. But you also should keep your cooling system happy by running the air conditioner every few weeks in winter to keep it lubricated, checking for puddles underneath the car and replacing belts and hoses before they dry and crack.
Replacing tires when you should be replacing shocks. If your tires are wearing unevenly or peculiarly, your car may be out of alignment or your shocks or struts worn out.
Letting a brake squeal turn into a brake job. Squeal doesn’t necessarily mean you need new rotors or pads; mostly, it’s just annoying. Your first check -- you can probably see your front brakes through the wheels on your car -- is to look at the thickness of the pads. Pads thicker than a quarter-inch are probably fine. If your brakes emit a constant, high-pitched whine and the pads are thinner than a quarter-inch, replace them. If your car shimmies or you feel grinding through the pedal, then your brake rotors need to be turned or replaced.
Not complaining when your warranty claim is rejected. Check Alldata and the National Highway Transportation Safety Administration (NHTSA) to see if a technical service bulletin (TSB) has been issued about the component in question. Manufacturers often will repair known defects outside the warranty period (sometimes called a secret warranty). It helps if you’ve done your homework and haven’t been a jerk.
Not keeping records. A logbook of every repair done to your car can help you decide if something’s seriously out of whack. Didn’t I just buy new brake pads? With a log and an envelope stuffed with receipts, you’ll know who did the work and when, and whether or not there’s a warranty on the repair. And a service logbook helps at resale time, too.
Buying an extended warranty. Most manufacturers allow you to wait until just before the regular warranty expires to decide. By then you should know whether your car is troublesome enough to require the extended warranty. Most of them aren’t worth the price.
Overinsuring. Never skimp on liability, but why buy collision and comprehensive insurance on a junker you can probably afford to replace? Add your deductible to your yearly bill for collision and comprehensive coverage, then compare that total with the wholesale value of the car. If it’s more than half, reconsider.
Assuming the problem is major. If your car is overheating but you don’t see a busted hose or lots of steam, it might be the $5 thermostat, not your radiator. Or it may be that ominous “check engine” light itself that’s failed, not your alternator.
Not changing the fuel filter. Have it replaced as a part of your maintenance -- every two years or according to the manufacturer’s schedule -- rather than when it becomes clogged with grit, leaving you at the mercy of the nearest garage.
Not knowing how to change a tire. Have you even looked at your spare? Make sure it’s up to snuff and all the parts of your jack are there. Changing a flat yourself is not only cheaper, it’s faster, too.
Not keeping your tires properly inflated. Check them once a month; otherwise, you’re wasting gasoline, risking a blowout and wearing them out more quickly.
Car washes. Ten bucks for long lines and gray water? Nothing shows you care like doing it yourself.
Thursday, May 17, 2007
Are Pre-Owned Certified Vehicles Worth It?
By NADAguides.com
When you're looking for a pre-owned car, it can be difficult to know what the difference is between buying a certified or standard used vehicle. Our helpful tips can help ensure that you make the right decision!
Do your homework first
- See what you can afford -Sure that Italian speedster might look nice parked in your driveway, but is it really worth it? Before you waste any time looking at the wrong vehicles, determine what you can afford.
It's also a good idea to check your credit report. This will ensure there aren't any mistakes or other surprises that can negatively affect what type of loan you qualify for.
- Determine your needs - Decide what vehicle best fits your needs, along with your preferred options. These might include color, transmission type (manual or automatic), leather seats and more.
· Check out what others have to say - Sites such as NADAguides.com allow you to compare models, read reviews and much more. It's also a wise idea to check out the vehicle's repair history and see if it has had any recalls. The U.S. Department of Transportation's Auto Safety Hotline (1-800-424-9393) can help you.
Now that you're satisfied on your choice, another question needs to be addressed: Should you buy a new or certified pre-owned automobile? Let's explore this.
What is a certified pre-owned (CPO) automobile? Even though there are many used cars on the road, not every one of them qualifies for certification. Typically, a CPO vehicle is a used car that has gone through a rigorous inspection process and has an extended warranty beyond the car's existing warranty. The best way to describe a CPO car: One that needs very little reconditioning or was reconditioned to original factory specifications.
As a result of stringent guidelines and strict criteria associated with the CPO qualification process, certified pre-owned vehicles are guaranteed, or certified, by the manufacturer. For added peace of mind, virtually every certified pre-owned vehicle sold today comes with a comprehensive vehicle history report as back-up documentation in addition to comprehensive inspections and warranties.
What's involved with a typical certified pre-owned inspection process? Typically, cars that are newer than five years old with fewer than 50,000-60,000 miles and solid title histories are the only vehicles considered for certification. Once a car passes this initial test phase, it's put through a series of evaluations (further defined as the inspection process) to see if it meets the manufacturer's stringent guidelines for certification.
Most manufacturers offer anywhere from 100-point to 300-point inspections. We've organized these detailed inspections into six separate criteria.
· General evaluation: including safety systems, mirrors, lights, braking, steering, shifting and overall engine operation.
· Under hood evaluation: including the electrical system, engine cooling system, brake and ignition systems, belts, air conditioning and power steering.
· Exterior assessment: such as bumpers, front grill, doors, fenders, glass and wheels.
· Interior evaluation: including the instrument panel, seats, carpet, floor mats, headliner and general upholstery.
· Required service and maintenance assessment: such as lube, oil, filters, tire pressure and emissions.
· Exterior detailing analysis: including surface scratch reconditioning, tar and road oil removal, general washing and waxing, and engine compartment cleanliness.
Do certified pre-owned vehicles cost more? Yes, CPO vehicles typically cost more money than non-certified vehicles. They may be as little as $400 more than a non-certified used vehicle or as much as $2,800 more, depending on the brand and model. For some people, paying more money for a manufacturer-guaranteed vehicle is worth the extra cost.
For others, it's better to take the chance and purchase a non-certified used car for less money since there are a wealth of good-quality, mechanically-sound used cars on the road today that don't carry certifications
Is certified pre-owned right for me? Buying a certified pre-owned vehicle is purely a personal decision. As we've outlined in this section, pre-owned vehicles go through a stringent evaluation process and carry comprehensive warranties not typically offered with non-certified used cars.
While certification brings with it guarantees not commonly associated with pre-owned vehicles, it's not a surefire guarantee that something won't go wrong with the used car you're buying. However, consumers appreciate, and in most cases are willing to pay more for, a car that has been rigorously inspected and guaranteed by the manufacturer
When you're looking for a pre-owned car, it can be difficult to know what the difference is between buying a certified or standard used vehicle. Our helpful tips can help ensure that you make the right decision!
Do your homework first
- See what you can afford -Sure that Italian speedster might look nice parked in your driveway, but is it really worth it? Before you waste any time looking at the wrong vehicles, determine what you can afford.
It's also a good idea to check your credit report. This will ensure there aren't any mistakes or other surprises that can negatively affect what type of loan you qualify for.
- Determine your needs - Decide what vehicle best fits your needs, along with your preferred options. These might include color, transmission type (manual or automatic), leather seats and more.
· Check out what others have to say - Sites such as NADAguides.com allow you to compare models, read reviews and much more. It's also a wise idea to check out the vehicle's repair history and see if it has had any recalls. The U.S. Department of Transportation's Auto Safety Hotline (1-800-424-9393) can help you.
Now that you're satisfied on your choice, another question needs to be addressed: Should you buy a new or certified pre-owned automobile? Let's explore this.
What is a certified pre-owned (CPO) automobile? Even though there are many used cars on the road, not every one of them qualifies for certification. Typically, a CPO vehicle is a used car that has gone through a rigorous inspection process and has an extended warranty beyond the car's existing warranty. The best way to describe a CPO car: One that needs very little reconditioning or was reconditioned to original factory specifications.
As a result of stringent guidelines and strict criteria associated with the CPO qualification process, certified pre-owned vehicles are guaranteed, or certified, by the manufacturer. For added peace of mind, virtually every certified pre-owned vehicle sold today comes with a comprehensive vehicle history report as back-up documentation in addition to comprehensive inspections and warranties.
What's involved with a typical certified pre-owned inspection process? Typically, cars that are newer than five years old with fewer than 50,000-60,000 miles and solid title histories are the only vehicles considered for certification. Once a car passes this initial test phase, it's put through a series of evaluations (further defined as the inspection process) to see if it meets the manufacturer's stringent guidelines for certification.
Most manufacturers offer anywhere from 100-point to 300-point inspections. We've organized these detailed inspections into six separate criteria.
· General evaluation: including safety systems, mirrors, lights, braking, steering, shifting and overall engine operation.
· Under hood evaluation: including the electrical system, engine cooling system, brake and ignition systems, belts, air conditioning and power steering.
· Exterior assessment: such as bumpers, front grill, doors, fenders, glass and wheels.
· Interior evaluation: including the instrument panel, seats, carpet, floor mats, headliner and general upholstery.
· Required service and maintenance assessment: such as lube, oil, filters, tire pressure and emissions.
· Exterior detailing analysis: including surface scratch reconditioning, tar and road oil removal, general washing and waxing, and engine compartment cleanliness.
Do certified pre-owned vehicles cost more? Yes, CPO vehicles typically cost more money than non-certified vehicles. They may be as little as $400 more than a non-certified used vehicle or as much as $2,800 more, depending on the brand and model. For some people, paying more money for a manufacturer-guaranteed vehicle is worth the extra cost.
For others, it's better to take the chance and purchase a non-certified used car for less money since there are a wealth of good-quality, mechanically-sound used cars on the road today that don't carry certifications
Is certified pre-owned right for me? Buying a certified pre-owned vehicle is purely a personal decision. As we've outlined in this section, pre-owned vehicles go through a stringent evaluation process and carry comprehensive warranties not typically offered with non-certified used cars.
While certification brings with it guarantees not commonly associated with pre-owned vehicles, it's not a surefire guarantee that something won't go wrong with the used car you're buying. However, consumers appreciate, and in most cases are willing to pay more for, a car that has been rigorously inspected and guaranteed by the manufacturer
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