Mark McCready, director of pricing strategy and marketing analysis at CarsDirect.com tells you why buying a pre-owned car is one of the best buying a car deals.
Ever think about buying a pre-owned car? Mark McCready, director of pricing strategy and marketing analysis at CarsDirect tells you why buying a pre-owned car is one of the best buying a car deals:
Are pre-owned cars really the best bargain when it comes to buying a car?
Cars are assets that depreciate with age and mileage. The depreciation is the greatest in the first two years. If you buy a car that is 2-3 years old with low mileage, you can minimize your initial expense while owning a car that is still under the factory warranty for a while.
When/why should a consumer consider buying a pre-owned car?
Pre-owned cars are a great alternative for a consumer who needs or wants more car than they can afford to buy brand new. For example, a used Camry is a good alternative to a new Corolla.
How can a potential buyer be certain a pre-owned car is really in good condition? Why is the certification process important?
A certified pre-owned car is one that has passed an inspection by a trained technician. Most of the major manufacturers have a certified program, and their dealers will sell a number of certified pre-owned models at their stores. These vehicles need to meet strict requirements to be included in the program since the manufacturer will provide an additional warranty upon purchase. Large retailers like CarMax also offer this. The cars are in the best condition possible because the manufacturer will only allow a small number to pass the certification process. Limiting the cars that qualify is in their best interest due to the warranty provided.
When/why would a dealer/salesperson try to steer a potential buyer towards a pre-owned car?
Usually a dealer will offer the pre-owned car when the customer's budget, or expense expectation is less than the amount required to buy the desired new car.
Do certified, pre-owned vehicles have better resale value?
Not likely, unless the car can be re-certified.
If you are trading in a pre-owned car, it will be worth more to the dealer if it can be certified. Usually dealers take trade-ins as a courtesy to their new car purchasers. Then the car is most likely transported and sold at auction by the dealer. If the car qualifies as a certified car, the dealer can make the inspections and add this car to their pre-owned certified inventory directly. This eliminates the step of going to the auction, and saves the dealer money. They can then pass this along to the customer through an increased trade-in value.
