Second hand car value and price are not equal

Many times, when shopping for a second hand car, people make the mistake of buying the cheapest car they can find.  The cheapest price is not always the best value.  Your safety is most important, so you should select a vehicle that is in sound mechanical condition but at a price you can afford.  A cheap car may cost you more in expensive repairs after you buy it.  Most second hand cars are sold “AS IS” without any warranty.  The old saying, “Buyer beware” definitely holds true for buying a second hand car.

Dealers price their second hand cars according to what the market will bear with the NADA value as a reference point.  If you see two vehicles on a lot that are the same year, similar models, and one is priced cheap compared to the other, beware of the cheap car.  The dealer may be aware of a serious potential problem that will be expensive to repair and he or she wants to move the car quickly.  

It is true that older cars cost less than newer models, but older does not mean it is a bad car, just as a newer model may not be your best buy.  Usually cars that are more than 10 years old have very high mileage and a lot of wear on the engine and transmission.  You can find a good value if a car 10 years old has been well maintained and has relatively low mileage.  A good rule to measure whether mileage is excessive is to expect that a car has been driven about 12,000 to 15,000 miles per year.  So a 5 year old car should have less than 75,000 miles.  The more a car is driven, the more likely it is that you will face expensive repairs such as replacing a transmission.  However, the mileage is merely an indicator of how far the car has been driven.  Other important factors include regular maintenance and whether the car has been involved in an accident.  Make sure to obtain a title report and vehicle history report so that you can verify the odometer reading is accurate and that the car has not been involved in a crash.

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Former rental cars and program cars are usually priced cheaper than other used vehicles.  These cars can be a good value, but the same caution applies to buying a former rental or program car as to all others.  Program cars are usually second hand cars that have been used as dealer demonstrators or were part of a corporation’s fleet for executive use.  Often program cars have higher mileage, but been well maintained- usually.  It is imperative that you obtain a copy of the maintenance records for these second hand cars.  If the records are incomplete or if they indicate that the car did not receive regular oil changes and inspections, steer clear of this car.  Most companies keep meticulous records of vehicle maintenance and repair for tax purposes so an incomplete record is a red flag.  Former rental cars may be cheap but they are not always a good value.  Some rental cars have been abused and poorly maintained.  The vehicle maintenance records are critical if you are considering buying a former rental car. 

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