Most people want to get both a safe vehicle and an amazing deal when they buy a car, and depending on each car buyer’s budget, one of these factors may be of greater importance than the other. Typically, the cost of the car trumps all other considerations. That isn’t to say that reliability and other factors aren’t important; it’s just that most people flock to the most reliable brands that they can afford.
However, it’s possible to get a reliable used automobile if you know what to look for. This post looks at how to buy a reliable car brand at used-car prices. It also explains the different kinds of used vehicles there are and the advantages these automobiles have, not only at sale time, but also over the long haul.
The General Advantages of Buying Used
Before delving more deeply into which brands of cars you should buy used, it’s helpful to cover the reasons why people buy used cars in the first place. Usually, it comes down to the price of the vehicle and its depreciation value. If you buy a new car for $30,000 or so, you can count on it depreciating by nearly half within three or four years. Basically, your $30,000 vehicle is worth $15,000 in less than five years. This is due to depreciation.
However, if you buy the same car used and sell it three years later, it will likely only depreciate by about $5,000 instead of $15,000. In other words, if you buy a used automobile, it will cost you less up front and have a better depreciation value than the same car will if you buy it new. Buying a used vehicle usually saves you money immediately because of the depreciation factor alone.
Buying Quality Car Brands
Buying used means that you can afford a better car or even a luxury vehicle. This means a Mercedes, BMW, or Lexus may fit into your budget if you buy those brands used instead of new. However, all cars have depreciation, even luxury ones.
That said, your used vehicle doesn’t have to be a luxury car. It can still provide you with excellent value and plenty of safety features. Automobile brands like Honda, Ford, Hyundai, Volvo, and Volkswagen, to name just a few, are also quality car brands. As with all used cars, you’ll pay less if you buy these vehicles used than if you buy them new.
The car’s brand is important for another related reason. Car buyers often consult resources like the Kelley Blue Book to find out what price a particular model of vehicle is being sold for at a particular time.
If you’re planning on using your current car as a trade-in for your next vehicle, having a quality trade-in means you’ll pay less for the next one you buy. In other words, the cost of your new automobile minus the value of your trade-in is what you’ll pay for your next car. Buying a quality used vehicle now will allow you to get a better trade-in value for your automobile when you’re ready to trade it in for a new one. This is another way you can save money.
Still, some car buyers feel reluctant to buy used cars because they’re afraid of the problems that may come with them. For these buyers, certified pre-owned cars, or CPOs, are the used-car answer.
If you’re not familiar with CPOs, here’s what you need to know. A certified pre-owned vehicle is a used car. However, it has gone through an extensive inspection, has had necessary repairs done, and then was put under warranty by the manufacturer. In quality, it’s closer to a new car. In price, it’s closer to a used vehicle.
Typically, a certified pre-owned car costs about $1,500 more than another used car of the same year and similar quality. The inspection of the automobile, the repairs, and the addition of the warranty add to its bottom line.
Refer back to the first section of this post to see what this extra $1,500 means in context. Remember, the theoretical car in question costs $30,000 new. Buying that same vehicle used is about $15,000. If you buy that same model but as a certified pre-owned car, you’ll pay another $1,500 on top of the $15,000 for a final price tag of $16,500. Financially speaking, it’s still a better deal than buying the car new.
How Is CPO Determined?
Every car manufacturer that has a CPO program has slightly different requirements for the vehicles in its program. For example, Toyota’s CPO program requires the cars in its program to have fewer than 85,000 miles on them and be less than 7 years old. The Mercedes program, on the other hand, requires that cars have fewer than 75,000 miles on them and be less than six years old.
However, there are drawbacks to this system. Many people who buy certified pre-owned vehicles expect those cars to have the perfection of a new automobile. In other words, these used-car owners expect their CPO to have no problems whatsoever, even if the vehicle has 100,000 miles on it.
In this respect, these car owners forget that they’ve purchased a used automobile. While these cars may be of better quality than some used vehicles without the CPO designation, they’re still used cars.
It’s important for these car buyers to remember that it’s a better used car than some. They should also remember that it has a better sticker price and depreciation value than many new vehicles. In other words, they’re reliable used cars that still come with a better sticker price than most new cars, particularly if the vehicles are a luxury brand, like Lexus or Mercedes.
The short answer is no, you don’t need to buy a certified pre-owned car to get a safe used vehicle at a good price. Organizations like Consumer Reports put out lists that help consumers buy reliable used cars, even if those automobiles aren’t certified pre-owned vehicles. The advantage that CPO cars bring to the mix is that someone in the know, in this case, the mechanic at the dealership, has inspected the car.
However, some brands just hold up better as they age. That’s the purpose of “Best Used Car” lists. The organizations that compile the list of quality used cars have done the research for car buyers. They’ve consolidated the known pros and cons of each vehicle on the list as it ages. True enough, the people who compile these reports can’t know the particulars of a specific used car.
To a certain extent, this also offers consumers some savings, if only from a time standpoint. Someone else has taken the time to research and rate used automobiles so that consumers don’t have to.
Other Financial Factors
Aside from the initial sticker cost, there’s another way that both CPOs and the cars on the “Best Used Cars” lists can save you some immediate money: repairs. Many of the vehicles that make the “Quality Cars” list also make the “Cheap Cars to Fix List” list. These include car brands like Mercedes, Ford, and Hyundai.
Here’s an example of how this might break down. Taking Hyundai as an example, if you were to get this car fixed, it will probably cost you about $328 per year.
Additionally, assume that you’ll keep the vehicle for five years and that you bought it as a CPO. Finally, assume for the sake of consistency that you paid $16,500: That’s $15,000 for the used car plus $1,500 for the CPO inspection and additions.
That automobile will cost you $18,410 in total. This price includes the CPO costs and the cost of repairs over five years. This vehicle’s price still comes in less than the hypothetical new car price of $30,000, saving you almost $12,000 over the life of the automobile. You’ve saved both immediate and long-term money by buying this car used.
Buying a used car has so many benefits. You save money on depreciation, and on certain models, you save on the cost of repairs over the life of the vehicle. Some car models, like Hyundai, Volkswagen, and Kia, are known for their quality and low upkeep costs.
Additionally, some car manufacturers offer certified pre-owned vehicle programs. These automobiles aren’t brand-new, but they come close to the quality of brand-new without the sticker price. Although there are additional costs involved in owning a CPO, these cars still cost less in the long run than their brand-new counterparts.
Finally, buying used often allows you to buy a higher-quality vehicle. This means you may even be able to afford a luxury brand car. In fact, some used luxury models cost less and are of greater value than some brand-new car models.
The bottom line is this: Regardless of which kind of used car you choose, you’re likely to save money immediately and over the long haul if you buy a top-brand vehicle off the used-car lot.