Pre-owned Shopping Tips
Pre-owned Shopping Tips
Posted on July 31, 2024
Shopping for a Used Vehicle?
It's something everyone has done (or considered) at least once in their lives. There's plenty of advice and everyone has an opinion, so we thought we'd throw our hat in the ring. Here are 5 Unique (and possibly controversial) Tips - from the perspective of an insider.
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- A deal that's too good to be true is exactly that - NOT TRUE.
- A vehicle is so much more than its bio (year, model, mileage).
- Accident history matters - except when it doesn't.
- Don't waste energy finding your own financing.
- Private sales carry the highest risk.
A Deal that’s Too Good to be True is Exactly that – NOT TRUE.
The used vehicle marketplace is widespread and transparent – yes, I dare use the word transparent in an article about Used Cars. Thank you World Wide Web! Vehicle stats (year, model, mileage) and price are all readily available. Sellers in any market can advertise to buyers in any market – and on multiple platforms. Dealers often sell to other dealers – especially if the vehicle is better suited to a different lot or market. We also buy from private sellers – even when they’re not buying a replacement. These are simple transactions for everyone involved so if you find something for sale well below market value, the first question to ask is: “Why?” Everyone thinks the “good deals” are all about price. But, reader, we're here to tell you: a good deal is about so much more.
The first step is to remember there is a product on the other side of that price. Advertising disclosures differ from final purchase disclosures, so if you’ve found a “great deal” be sure to investigate it thoroughly. Ask questions, take the car for a test drive, and be sure you’re clear about its history and the terms of purchase. If a seller won’t put it in writing (especially if they are out of town), it might be best to just move on. $1,000 savings might seem like a lot of money (and no one is saying it isn't), but if you end up with a vehicle that needs new tires after 6 months, are you really ahead? Or worse, what if your $30,000 purchase has sketchy maintenance history and the engine goes a year later? Say 'hello' to your new (very expensive) lawn ornament.
If you feel confident with the dealership, the salesperson, and their answers (and have fully considered #2 and #3), then proceed with your great find. If it’s a private sale, before you continue, be sure to read #5.
A Vehicle is so much More than its BIO (Year, Model, Mileage).
No one believes someone’s fitness should be based on height and weight alone, so why would the quality of a used car (and therefore its value) be determined by its year and mileage? There’s the common misconception that lower mileage is automatically worth more. Why? Because the numbers are prettier? Because we live in a society that overvalues youth and undervalues our elders? Because the earth goes around the sun and sometimes the stars and moon align?
Seriously, if the basis of value is longevity, then mileage can’t be the only consideration. Just as numbers on a scale are poor indicators of how someone has cared for their body, the odometer cannot accurately predict the lifespan of a vehicle. Regular maintenance (at reputable repair facilities) and daily use have a far larger impact on a car’s longevity than the actual numbers on the “clock”.
One last hot take on vehicle stats: In my opinion, a certified car with 60,000 km is worth *more* than the same car with only 30,000 km. The higher kilometer car will have new tires and brakes under any manufacturer’s certification program (whereas the other will have all original) and the previous driver *needed* their vehicle more so they were probably more diligent with regular maintenance.
Accident History Matters, Except when it Doesn’t.
In Ontario, all dealerships are required to disclose any accident in excess of $3,000. A kid on a bicycle can cause that much damage (speaking from personal experience). Consider further the increased cost of items like intricate headlights (found even on ‘budget’ vehicles) and additional claim costs (like towing and rental), and it’s a wonder there are any claims below $3,000.
I’m not saying that accident claims should be ignored. The exact opposite actually. Do your due diligence and research the claim. Ask for proof of what was repaired. If the seller doesn’t have a copy of the repair, they should at least have the name of the facility that completed the work. The quality of workmanship and extensiveness of repair is priority. These shops have computerized records detailing every work order – and a reputation of their own. A quick phone call should paint a clear picture (pun intended).
Sometimes a seller (especially a dealer) might not know where a vehicle was repaired, or what exactly happened. (Was it a bicycle, another car, or a cat? Again – speaking from personal experience). The price should reflect this lack of knowledge – meaning an educated guess based on the Carfax claim.
If it’s a private individual and they say they don’t remember, just run very far away.
(Actual picture of Car vs Bicycle - the cat incident (different car) was worse!)
Don’t Waste Energy finding your own Financing.
The average finance customer doesn’t have anywhere near the pull at their bank to compete with a dealership’s business. We have special rates, incentives, and approval power. Even a small dealership selling 10 – 15 cars a month will send more business to a bank in a single month than most people do in a lifetime.
Not to mention, the teller (or mortgage broker or financial advisor) often has his/her own targets, priorities, and agenda that don’t necessarily keep your best interests in mind. Sure, if you lump your car purchase in with your mortgage renewal, it won’t add much to your monthly obligation, but is taking 20+ years to pay off a depreciating asset really a good idea? A line of credit offers flexible payment options (paying the bare minimum is very tempting) but will you be sure to make higher payments often enough to work toward positive equity? Or, my favourite is the advisor who recommends holding off on buying altogether and invest with them instead. Are they going to drive you to work and/or pay for repairs as your current vehicle ages?
To be fair, as a dealership, we have our own goals – to sell you a vehicle that fits your needs and makes you happy - so you recommend us to your family and friends. But, since you’re in the market for a good used car, everyone is looking to achieve the same outcome.
Lastly, don’t waste time arranging financing so you can negotiate with the “power” of a cash buyer. If you have good credit, every purchase is like cash – the dealership gets the money from you or from the bank (occasionally with a financial ‘thank you’). If you’re credit challenged, you may benefit from the dealership’s buying power (read: better interest rates and approval terms).
At the end of the day, if you expect the dealership and salesperson to deal with you honestly and transparently, shouldn’t the same be true of you? Save everyone time and be upfront about your circumstances – it will get the quickest and best outcome for all parties involved.
Private Sales carry the Highest Risk.
As I mentioned before, dealerships have disclosure obligations that go far beyond accident history. Their license and livelihood are at stake and they are regularly inspected. (Mystery shops are fun!). Private sellers only have to answer in court. This is only if you jump through hoops and take them to court – and only if you have the real identity of the seller. Whether you’re spending $5,000 or $50,000, it’s a lot of money to risk on the morality of a stranger. If the price is better, is the product equivalent? Or, is it another example of "you get what you pay for"? Ensure you're making your proper comparisons because especially with private purchases, the rule is buyer beware.
Remember reader, there is a product at the end of this shopping trip that will be with you for months and years to come. This isn’t a subscription service or an interest rate – you’re shopping for the central part of your daily commute, weekly errands and occasional road trips. Take the time to consider more than just the basic stats and price so you find the vehicle that will make you happy with the end result!
(Shameless plug for our Certified Pre-Owned (CPO) Program 😁)