Are you in the market for a brand-new vehicle, but do not have the budget for the same? If that’s the case, a late-model pre-owned car could be a suitable alternative. Furthermore, buying a pre-owned car relieves you from the experience of value depreciation that a brand-new car undergoes over time.
However, given the plethora of pre-owned cars available in the market, how do you ensure that you aren’t putting your life-long savings into a clunker? Read on to find out more.
How to purchase the right pre-owned car? The CPO, or the Certified Pre-Owned program, was started in the early 1990s by automakers who wished to bank on lower lease returns as well as low-mileage trade-ins. There was an array of cars that returned to dealerships in mint condition. So, automakers decided that instead of selling these cars at an auction, they could resell the cars at lower prices. The reselling happens only after a detailed inspection, which involves extended warranties, additional perks, and reconditioning, among other factors. Over the years, the CPO program got exceptionally popular, and almost every automaker now offers this program. Though most of these programs are similar across brands, they do have certain differences. Luxury CPO programs vary hugely from CPO programs of regular cars, but they are great alternatives to brand-new cars.
Things to do before buying a pre-owned car Today, the demand for pre-owned cars has increased with a lot of people preferring it in comparison to buying a new car. This thought process is predominantly more common amongst young working professionals that have just started their careers. They want a great car, with regular performance but in an affordable price range. To ensure that you get your money’s worthwhile buying a pre-owned car, you’ll have to do a lot of research. To help you get started, here are some tips you can adhere to that will help you make a more informed choice:
First things first, you need to finalize a budget that you are ready to spare on a pre-owned car. While looking into pre-owned cars, you do not require to get financed, so it is best to prepare a budget as per your needs. Financing in pre-owned cars can be a very time-consuming and cumbersome process. As far as the lending agencies are concerned, they do not consider pre-owned cars to be on par with brand new cars. Therefore, naturally, when you take a loan on a pre-owned car, you will be charged a higher interest rate. Moreover, the loan sanction will not be substantial enough and may have a short repayment tenure as well. Therefore, you should be financially well-prepared before gleaning through pre-owned cars.
- Research pre-owned car models
Once you have planned your finances and know your budget range, you need to educate yourself about various pre-owned cars that are available in the market. Find out the make and model of cars that give good mileage, have the necessary accessories, and performs well on its second time around. Once you have short-listed a few pre-owned cars that you are interested in, you further need to find showrooms, dealerships, online sellers, or garages that sell these pre-owned cars.
Before buying a pre-owned car, take it for a test drive. This gives you a better judgment of the performance of the car. This will also help you discover flaws, if any, in terms of road performance, control, alignment, and handling. This ensures that you know what you are getting into before you sign the dotted line.
For an in-depth examination, you should take the car to a trusted garage. There, you can get the vehicle examined for electricals, engine, fuel-efficiency, mileage, condition of the tires, battery, and the AC. This will help you gather a comprehensive report of the car’s health. If a car is well-maintained and in good condition, then it wouldn’t face any issues in clearing this test. Also, inspection will assuage any last-minute doubts you have before investing your money in a pre-owned car.
If everything about the car’s performance and maintenance is satisfactory, you can proceed with the paperwork. Ensure that you check documents such as service log, registration certificate, loan documents, insurance documents, and the original invoice of the vehicle. Buying well-maintained, value-for-money pre-owned cars, involves a lot of research and legwork. Instead of handling all of this on your own, you can hire an experienced agent to assist you through the purchase. This will not only save your time, but also help you get the best car possible. These agents verify pre-owned cars, check paperwork, examine insurance, and straighten out any loan technicalities, ensuring that you get your money’s worth.
Advantages of buying pre-owned cars While pre-owned cars may not sound fancy and the process can be tedious, it does help you save money, get you places, and has a low depreciating value. Read on to know more about the advantages of investing in pre-owned cars.
Pre-owned cars are certainly less expensive than brand-new cars. This allows you to step up and invest in an upgraded model. Moreover, with a flexible budget, you can opt for the best pre-owned cars with all the desired luxuries from a much wider range of pre-owned car models. Though it might not be the latest 2019 or 2020 model, it certainly can be the latest model at the time when it came into the market. This eliminates the need to strictly adhere to the manufacturer’s timeline on the warranty. A car generally stays in good condition for at least 10 to 15 years, depending on its use. After this, you may experience minor issues that can be resolved by simply timely service and maintenance. However, to ensure that you are not investing in a dud, be very thorough in your inspection of the car before buying it.
Every year, a car’s value depreciates and its mileage reduces. However, the most significant depreciation in value is seen the moment you take a brand new car out of the showroom. There are a few models of cars that depreciate as much as 40% or more in the first year itself. Yes, even pre-owned cars are bound to experience depreciation in value, but this is nowhere near to the rate of depreciation that the owner of a new car experiences over time.
Just like financing rates, even insurance rates are impacted by the age of the car. However, in the case of pre-owned cars, insurance is substantially less expensive in terms of monthly premiums than brand-new cars. Moreover, thorough research and inspection before buying a pre-owned car will go a long way in keeping you protected from insurance sticker shocks, irrespective of the type, brand, or model of the car you choose.
You may not be able to personalize pre-owned cars to the extent that you can in brand new cars
. However, if you want a particular feature, model, or special wheel design with wider choices available in pre-owned cars, you certainly have a better chance of finding what you like. Given the myriad of options available, you’ll certainly find a car that fits the bill and gets you around comfortably. For buyers who give prime importance to price, and aspects listed above, buying a pre-owned car over a new car will be a good and more convenient alternative.
Mistakes to avoid while buying pre-owned cars Given the numerous benefits associated with pre-owned cars, it is a good idea to invest in one, especially if you are on a budget. However, it is important that you do not rush your decision of buying a pre-owned car. Conduct thorough inspection before finalizing a deal to prevent situations where you spend your savings on a pre-owned car, and it stops working in a month. Therefore, take due care before making this purchase decision. Below is a list of common mistakes that you should strictly avoid while buying a pre-owned car.
- Uncertainty on the requirements
Never make the novice mistake of buying pre-owned cars strictly on the basis of price. While considering your budget is important, buying a car just based on its low price does not guarantee quality. The same car will break down in the future numerous times and you will have to pay for repair every time depending on its make, model, and availability of spare parts. Therefore, ensure that you have a flexible budget that allows you to buy pre-owned cars that are in superior condition. Moreover, clarity on the purpose of the car would certainly push you towards making a better decision. Take into consideration the size of the family, the primary use of the car, and who is going to be using it amongst other things while deciding your requirements in a pre-owned car.
- Ignoring the history of the vehicle
Pre-owned vehicles have been on the road for a while undergoing wear and tear before they are up for sale. Thus, it is important to check the history of pre-owned cars to know aspects such as the distance covered and mileage. Request previous owners for the details relating to any accident history, odometer reading, pending loans, current health, and any other information such as impeding annual service that you feel is relevant to you. Ensure that you have verified, authentic, and accurate information about the pre-owned car.
Pre-owned cars can look spectacular and be in fine condition and yet have internal problems such as low mileage or oil leakage. Therefore, you should make a conscious decision as to whether you are ready to compromise on the mileage simply for comfort. Compromising on the mileage means increased fuel consumption for a shorter distance, So, if you are looking at pre-owned cars for long drives or commercial purposes, then it is best to pass on the car; and go for something that gives your more economical performance and mileage.
- Not inspecting the features
Before inspecting pre-owned cars, prepare a list of features that you want in a pre-owned car. Preparing this list is important to ensure that you get what you desire and do not forget to inspect if these features function well.
- Not buying a certified vehicle
Buying pre-owned cars from dealers or directly from car owners can be a massive risk. On the other hand, if you reach out to agencies or companies that specifically deal in pre-owned cars, it assures you that you are putting your money in certified cars. Most companies or agencies dealing in pre-owned cars thoroughly inspect the car before putting it up for sale. Moreover, any complaints or inefficiency are already addressed, so you have nothing to worry about. Some pre-owned car agencies and companies also offer insurance renewal and extended warranty. Therefore, choose to buy a certified pre-owned car to save yourself from any nagging troubles in the future. Now that you have a good idea of all the possible mistakes that you should avoid and tips to adhere to, take the plunge and get yourself an affordable pre-owned car. Do note that if a car does not meet all the criteria on your checklist, it does not make it a bad option. As long as it ensures to get you from A to B without any hassle and guarantees your safety, it is certainly a car worth considering.
