8 Things You Need To Know When Buying A Used Car
1. After Five Years, a New Car is Only Worth 37% of What You Paid for It
On average, a new car, truck, or SUV will lose 11% of its value the second it you buy it and drive it away from a dealership. Every year after that, the vehicle loses another 15-25% (depending on wear and tear). That means that after five years, that new car you bought is only worth about 37% of what you paid for it. To put that into context, if you purchase a new car tomorrow worth $40,000, it will only be worth $14,800 five years from now.
This is the reason that most economists would advise buying a used car. Buying a car that’s one, two, or three years old means you’re getting basically the same amount of reliability as you would with a new car. You’ll lose out on some warranty time, but many places (including Go Auto) offer extended warranties for their pre-owned vehicles.
Used vehicles typically come with more frequent service and repair bills (because they’re further down the lifecycle than a new car), but once you factor in the amount you will save on your car payments, the choice to buy pre-owned can be an easy one for many people.
2. Being Realistic About Your Lifestyle Makes the Process Much Easier
When buying a used car, almost everyone commits the same cardinal sin: fixating on the car they want instead of focusing on the car they need. It’s important to go into the purchasing process with an open mind. If you’re dead set on a specific vehicle, then you can easily find yourself overpaying for it or finding it lacking in key aspects later.
When you start your search for a used car, you should be doing so with at least a broad understanding of what your needs are for that vehicle. Ask yourself:
- How many people will I regularly need to transport?
- Am I going to be transporting a dog in this vehicle? Is it sufficient for that task?
- What features do I want?
- What are the features that I can’t live without?
- What do I need to feel safe behind the wheel?
- What kind of driving am I going to be doing?
- Do I need a lot of cabin space, or can I make do with a smaller vehicle?
- Will I need to tow anything?
This is by no means a comprehensive list, but it should be enough to get you started. Consider how you live your life and plan your purchase accordingly.
For example, if you need to tow regularly, then consider a six-cylinder engine. However, if most of your driving is done in the city, then a four-cylinder engine is probably enough for you. If safety is a major concern for you, then consider vehicles with electronic stability control, brake assist, crumple zones, reinforced door frames, etc.
3. You Can Still Get Parts for Discontinued Models
In most cases, if an automaker stops producing a car, then it will continue building parts for years after the cancellation. Other companies may build parts for those vehicles, too.
Also, many modern cars share their parts with other cars, even if the car you’re looking to buy has been discontinued, its likely that the manufacturer is still building its parts for other vehicles that have the same engine, transmission, etc.
That being said, this isn’t always the case. Occasionally, finding parts can be an issue. If an entire brand stops production (either worldwide, or more specifically in North America), parts can be in short supply. This has happened recently with both Saab, which left the North American market, and Suzuki, which discontinued entirely in 2013.
4. Setting a Firm Budget Will Help Prevent Buyers Remorse
Before you buy a car—new or used—set a maximum price and stick to it. Determine what you can realistically pay each month and then use that as your barometer when you’re shopping. Keep in mind that you’ll also have to pay for things like registration, insurance, and transfer fees (but not if you buy on GoAuto.ca, since we have included all fees in our on-site pricing).
If you’re planning on financing a used vehicle, it’s a good idea to secure financing before you even start shopping for a vehicle. Once you find out what you’re able to borrow, your entire experience will be streamlined for you. You’ll know what’s realistic and what’s out of you range, which makes your decision that much easier.
Knowing exactly what you can afford will also improve your experience with the salesperson. If you’re worried about being upsold into something you can’t afford, a pre-arranged financing limit will give the dealership a very firm price to work with. That being said, if you’re worried about being “taken for a ride” by your salesperson, then you’re probably not buying from the right dealership. (Note: Go Auto pays each of its salespeople the same, no matter what you buy. We don’t incentivize our salespeople to sell you a car you can’t afford.)
5. Buying Used is Safer Than You Might Think
Let’s be honest: there is, in general, a cultural assumption that car salespeople are not opposed to ripping off their customers. If that customer is buying a used vehicle, then those assumptions go even deeper.
In truth, buying a used car from a certified dealership (Dodge, Ford, Nissan, Honda, take your pick) is a very safe bet.
Here’s why: dealerships must adhere to pretty strict codes of conduct. There are rules in regulations in place to prevent a salesperson from knowingly selling you a car with mechanical deficiencies, unless those deficiencies have been clearly stated and the customer chooses to buy the car anyway. For example, in Alberta we have AMVIC, the Alberta Motor Vehicle Industry Council. They have a code of ethics (found here: http://www.amvic.org/yourrights/) that every dealer is required to follow.
Dealerships have certified technicians who inspect these vehicles prior to a sale. And on top of this, dealerships (including Go Auto dealerships) can provide extended warranties on the pre-owned vehicles they sell.
6. Used Vehicles Have Vehicle History Reports
Always make sure you request a full, detailed vehicle history report from a dealership when you’re buying a used vehicle. At Go Auto dealerships, we provide them upon request, free of charge.
Vehicle history reports give you a full rundown of a car’s accident and maintenance record. A car’s past is a pretty good indicator about what its future will be like, so this information can be extremely valuable. It might be the difference between buying a car you like and passing on it for something else without such a checkered past.
It’ll also give you an idea if the vehicle is overpriced.
7. Your Test Drive Should Involve More Than a Road Test
When you’re buying a used car with 100,000, or 150,000, or 200,000 kilometres on it, it is INCREDIBLY important that you test drive the hell out of that vehicle.
Some things to keep in mind:
- Does it start easily?
- Is the engine making any strange sounds?
- Does it blow smoke from the exhaust?
- Is it a bumpy ride or a smooth ride?
- Does all the technology work?
- Is anything leaking underneath?
Check all the instruments. Check all the controls. Make sure the interior is up to snuff. Does it heat and cool well enough for you?
Your test drive starts well before a road test. Take advantage of it.
8. Not Every Used Car Comes with the Same Extras
Check under the boot to see if there’s a spare tire. Is there a repair kit in the back? Does it come with a jack? Ask about the vehicle’s handbook. Request a spare set of keys.
Make sure you’re getting everything you need with your used vehicle. Replacing these items can get expensive, so ask your salesperson exactly what’s included in the sale price.
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