What is a Used Car?
A used car, a pre-owned vehicle, or a second hand car, is a vehicle
that has previously had one or more retail owners. Used cars are
sold through a variety of outlets, including franchise and
independent car dealers, rental car companies, leasing offices,
auctions, and private party sales. A used car can be from last
year’s model year, or it can be twenty years old. Dealerships mostly
will carry used cars that are from the last five years. With a
private sale you are more likely to be able to find something older.
Pre owned vehicles can be found in all shapes and sizes, from a
sporty, fast convertible, to a heavy duty pickup truck, to a family
hauler minivan. The benefits of purchasing a used car are obvious,
you save money, while also getting a great value. The reason for
this value is a new car’s depreciation rate. When a new car leaves
the lot, it automatically loses value. A used car that is three or
four years old has already lost its depreciation, so you are not
losing out on the value.
How to Shop for a Used Car
Shopping for a used car can be a time consuming and confusing
experience. But there are ways to shop stress free. The first thing
to do is to decide what your needs for a car are. Will you be
carrying passengers in the back? Do you need cargo space or towing
power? Or maybe you are looking for a car that gets excellent
mileage for commuting purposes. Then again you could be searching
for a ‘weekend’ car, such as a sports car or off road vehicle. Once
you narrow your choices you must set a budget. Sticking to your
budget is very important, if you end up with payments that are too
high and cause financial troubles because of your used car
purchase, you likely will regret spending the extra couple hundred
dollars. If you can afford a vehicle from the last few years, this
is the best choice. New vehicles will have modern design, new safety
technology, and many of the same features that a new car would have.
Pricing a Used Car
With annual sales of nearly $370 billion, the used vehicle industry
represents almost half of the U.S. auto retail market and is the
largest retail segment of the economy. The growth of the Internet
has fueled the availability of information on the prices of used
cars. Whereas this information was once only available in trade
publications that dealers had access to, there are now numerous
sources for used car pricing. Multiple sources of used car pricing
means that the prices you get from different sources often won't
agree with each other. This is a result of each pricing guide
receiving data from different sources and making different judgments
about that data. The best way to determine a price is to cross-check
prices with multiple sources to arrive at your price. Pricing of
used cars can also be affected by geography; generally a convertible has
a much higher demand in Florida than in New Hampshire. Similarly,
pickups are often more in demand in rural than urban settings.
Condition has a major impact on pricing. Condition is based on
appearances, vehicle history, mechanical condition and mileage.
There is much subjectivity in how the condition of a car is
evaluated.
Vehicle history reports
In the United States, an estimated 34-percent of consumers are
buying vehicle history reports for used cars. Vehicle history
reports are an inexpensive way to check the track record of any used
vehicle. Vehicle history reports provide customers with a detailed
record based on the vehicle's serial number (VIN). These reports
will indicate items of public record, such as vehicle title
branding, lemon law buybacks, odometer fraud and recalls. They may
indicate minor/moderate collision damage or improper vehicle
maintenance. An attempt to identify vehicles which have been
previously owned by hire car rental agencies, police and emergency
services or taxi fleets is also made. However, consumers should
research vehicles carefully, as these reporting services only report
the information to which they have access.