Personal Finance: Tips for buying a used car
Are you looking to buy a used car? You're in luck.
"The latest round of incentives has started to really depress used-car prices," says Art Spinella, president of CNW Marketing Research, an automotive research firm in Bandon, Ore. Every dollar of incentives offered by manufacturers depresses used-car prices by $1.05 to $1.10, says Spinella. For that reason, prices of used cars are now about 5 percent less than a year ago.
But, as always, caution is the watchword when shopping for used cars, as they rarely come with the warranties that new cars do. The good news is that the Internet puts more information about used cars and the car market at consumers' fingertips than ever before. "Do as much research as you possibly can before stepping onto the showroom floor," says Rob Gentile, associate director for auto pricing services at Consumer Reports' Auto Price Service.
Some sites to start at:
- Kelley Blue Book (www.kbb.com) and Edmunds (www.Edmunds.com) offer pricing data.
- A vehicle's VIN and $20 will get you a detailed history, including theft and accident information, from Carfax (www.carfax.com).
- The National Highway Traffic Safety Administration (www.NHTSA.dot.gov) and the Insurance Institute of Highway Safety (www.hwysafety.org) have crash-test information on most vehicles.
- Consumer Reports' paid site (www.consumerreports.org) has much of the above information, plus ratings and reviews, all in one place.
But don't rely completely on the Web, says Gentile. It cannot, and should not, be used as a substitute for your own eyes and ears–and those of a pro. Gentile offers these tips:
- Keep in mind that even cars just a few years old don't have all the safety features now considered standard. Side-impact air bags are a good example.
- Only reported accidents show up on vehicle histories like those from Carfax.
- Many dealers are willing to let you take the car to a mechanic for a quick inspection. "The $100 you spend on a mechanic may save you thousands later on."
- The pricing sites take advertising revenue from dealers, so use those numbers as broad guides only.
- Definitely take a test drive. That's not just to see or hear problems for yourself but to determine if the vehicle is right for you. Some cars just don't suit, say, tall people or people who don't deal well with blind spots.
"You wouldn't believe the number of people who buy a car without test driving it," says Gentile.