Consumer Reports on How to Assess a Used Vehicle’s True Value
Don’t Rely on Those Used Car Blues
Buying a used car involves a significant amount of decision making. If you are unsure what the true value of a used model is, you could look it up in the Kelley Blue Book to get some idea; however, that value listed is likely outdated since it takes time for new pricing data and analysis to make it into the Kelley Blue Book and therefore may not accurately reflect the very latest trends and economic conditions observed in used cars today.
Fortunately, used car shoppers have a wide range of outlets dealing in used cars to choose from that can provide a more accurate understanding of a particular model’s value. And, it can pay-off significantly if a smart shopper does a little investigation and comparison shopping to get a feel for what is a good price and what is too much.
The caveat to this, however, is the old “buyer beware” adage. More precisely, you need to understand that not all used car outlets are equal---with each possessing unique pros and cons the smart used-car shopper needs to consider, which in turn affects a car’s true value to the buyer.
That said, here is a summary of your options on where to look for a used car that can help you narrow down your choices regarding where you buy your used car…and from whom.
Used Cars Venues to Choose From
New-Car Dealerships---if you are looking for a relatively new, used car with only 1-3 years on it and low mileage, a new-car dealership is a good place to start your search. The benefit of shopping at a dealership is that their stock is typically up to date with used vehicles that still carry their original warranties.
However, due to the pandemic and its effect on the automotive industry, you can expect to pay higher prices for particular models here than at some of the other used car venues.
Auto Superstores---these are the dealerships that are overwhelming enough to make you almost need a map to guide you through the plethora of makes and models on their supersized lots. But this is a good thing because it is a great venue for making multiple model comparisons in one location. One example is CarMax which has 227 locations throughout the U.S. where you can inspect their inventory and test drive vehicles that interest you.
One downside of CarMax is that there is no haggling over the prices, but it should be a good indication of what the true current value of the models you are considering are going for that week. Cost-wise, you can expect their used vehicles to be on par with those sold at dealerships due to overhead cost of running a lot.
Independent Used-Car Dealers---this is where buying a used car can get very interesting. You will find not only a wide range of makes and models in various running and physical conditions, but also dealer/sellers who can range from honest to despicable…or somewhere in-between. This is definitely the used-car venue where you will want to take your car inspecting very seriously for hidden problems.
Consumer Reports analysts recommend choosing independent used-car dealers that have been around for a long time and/or are associated with new-car franchises. However, they also warn that many of these sellers also cater to customers with a poor credit history and low savings, so you should be wary of their offered financing which could have a very high interest rate, extra fees, or stiff penalties.
Independent Mechanics---one way to make money as a mechanic is to have a sideline business selling used cars, which some mechanics do since it is a good fit for their skills and they also typically have knowledge of a car’s history before investing in re-selling one.
For the used-car buyer, this can be a good way to find a great deal since the prices are typically lower and there’s always room for negotiating. The minus of this venue is that the model and make selections are very limited. Here is where asking around about the independent mechanic’s “word of mouth” business reputation can come in handy. In any case, it is always a good idea to have an impartial inspection performed.
Private Owners---here is where you can find your lowest priced used cars and perhaps find a diamond in the rough, but also take the biggest risk of winding up with a lemon. It is a good idea to get a feel for whether the private owner is the original owner of a used car; or, is someone who sells rebuilt vehicles with salvage titles that they have repaired on the cheap just good enough to scam a gullible used-car buyer. Also, be wary of anyone who says that they “..are selling the vehicle for a friend.” Here especially, is where you should consider buying a used car only after it has been inspected by a mechanic you trust.
Shopping Online---is the way of the world today, and used cars are no exception. Here you can easily search from the comfort of home all of the aforementioned venues for a used car with a seemingly endless supply of multiples of makes and models.
Services like Carvana and Vroom are popular because they are convenient, typically provide some car history information, and can deliver vehicles directly to buyers. They also have some buyer protections in place, but test driving or having an impartial mechanic inspect the vehicle may not be possible.
Online venues like Facebook Marketplace and Craigslist are good places to find cars owned by individuals---especially older, high-mileage vehicles. But as anyone can tell you when asked, buying from either is risky in more ways than one.
Online auctions are another option. One example is eBay where your bid is similar to signing a contract and committing to a buy should you “win the bid.” The plus is that you could wind up with a really good deal when bidding on a vehicle with no reserve. However, eBay also suffers from seller misrepresentation problems, and challenging a transaction gone wrong is a painful process.
Consumer Reports used-car recommendations include federal, state, and local government agencies, “…that use online auction sites to dispose of surplus vehicles. These vehicles are usually well-maintained but often lack desirable options. Rental car companies also use auction sites to sell older models from their fleets, in addition to their own dedicated used-car sites.”
While online shopping does offer some convenience and opportunities for finding a used vehicle at a low cost, Consumer Reports notes that the web is filled with used-car scam ads meant to trick you into giving out personal information or money for a deal that’s “too good to be true.”
The point of listing all of these used-car venues is that it provides the shopper an expectation of how pricing should reasonably trend regardless of the make, model and year of a used-car when it is being sold from venues ranging from an established dealership that commands the highest values (and hopefully the least risk), to an ad in the paper or online where the exact same car is valued lower (with some increased risk).
In any case, whether buying from an established dealer with warranties or some guy in the neighborhood with an “as-is” promise, always, always, always have that car inspected before buying to assess any vehicle’s true value to you as a buyer.
For more about buying a used car, here is a Consumer Reports warning on some used car models to avoid this summer.
Timothy Boyer is Torque News Tesla and EV reporter based in Cincinnati. Experienced with early car restorations, he regularly restores older vehicles with engine modifications for improved performance. Follow Tim on Twitter at @TimBoyerWrites for daily Tesla and electric vehicle news.