Guidelines For Purchasing Used Cars
Purchasing vehicles that had previous owners offer some benefits to prospective owners. Three of these include, but are not limited to, the price offered, availability of certification programs, and the prospect of avoiding depreciation cost.
A gap exists between the prices of new vehicles and those that are not. Research indicates a ratio of three to one. Usually, loans need to be sourced for the purchase, and these tend to require down payments and charge high premiums. Pre-owned vehicle loans could reduce that expense.
Certification programs were at first only available through luxury car makers but, currently, almost every automaker is using them. The main feature of the program is units with low mileage and minor damages, and these units are extensively checked to detect mechanical as well as cosmetic ills. The program also features extended warranties which could incorporate a little roadside assistance. Thrown into the mix may be special financing reasonably priced.
New vehicles begin to depreciate when they leave the dealers. This cost may be at least 30 percent of the original, and is usually lost in the first two years of ownership. The pre-owned types could be spared that expense.
Two disadvantages of acquiring previously-owned vehicles are the high interest rates on loans for the purchase, and the possible loss of peace of mind due to unforeseen problems. Because of the risks involved, lenders charge a higher premium on their loans, and zero percent financing is generally not offered. Unless the unit is certified, its condition is not guaranteed at purchase. There may be underlying and soon-to-be-revealed problems which could rob the purchaser of peace of mind.
Some suggestions for purchasing used cars have been made to assist would-be buyers. Careful consideration should be given to the advantages and disadvantages noted.
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