Illustration by Russell Cobb
|
Why and How It Pays to Buy Used
By Perry King, May & June 2005
The moment you drive a new car off the dealer’s lot, you lose thousands of dollars, in some cases 15 percent or more. That’s why it makes good financial sense to buy used, as long as you follow a few simple rules
|
Stick to Newer Buggies
Unless you really love old cars, the best way to get your money's worth
is to get a car with only two or three years on it and with mileage as low as
possible (not over about 40,000 miles). That way, there is most likely a great
deal of life left in the old flivver. Use higher mileage numbers to barter down
the price of the car.
Check the Records
Ask to see the owner's maintenance records, and consider running the car
through a service like Carfax, which
provides vehicle history information on used cars.
Don't Be a Guinea Pig
Never buy a car from the first year after the introduction of a new model.
It is bound to have some kinks to it that will make it less dependable and cost
you money. Also, try to avoid any vehicle that has been customized by a third
party. The work has been done by who knows whom, and it could lower the price if
you have to sell.
Buy From the Owner
Other than a warranty, the main thing you're getting out of buying from
a dealer is a car that's been detailed—and that detail job is
probably costing you a couple grand. If you do decide to go to a dealer, make
him pay for the privilege by giving you as good a warranty as you can squeeze
out of him—at a minimum, six months on the drive train (engine,
transmission, and axles), so that you pay for parts and he pays for labor.
Don't Overpay
To figure out what a car is worth: buy the local magazine for selling used
vehicles, and find four or five examples as close as possible to the model and
year you're considering. Add the prices together and divide by the number
of examples, getting a rough average. Then go to the Kelley Blue Book or another service that lists
used-car prices. Add that price to the average, and divide by two. Then, right
off the top, deduct 15 percent—and there's your target price. If you
can get the car for less, good for you.
Hang in There, Baby
Here is where most of us mess up. The critical thing you must do to get the
most out of your purchase is to drive that car into the ground. Stay with it to
the bitter end, repairing whatever must be repaired. Each year you don't
break down and buy that next car brings great dividends in the form of, say,
cash invested in the market, or land, or paid-down credit cards. Once
you've chosen it, learn to love the old chariot, and never let it go.
|
