The Internet, magazines and newspapers (remember them?) have many articles about cars, but it seems to me most of them have a common theme. They love to talk about new advancements in engineering available on the newest cars. Not many talk about used cars. The average car in America is 10 years old. Obviously we are not all shopping for new cars. In fact most of us shop for and buy used cars. Where is the advice about selecting used cars? Ahem. Allow me.
First, we have to understand that car manufacturers and their dealers are desperate to sell new cars. That is their bread and butter, and they are under intense pressure to move their financed inventory because they are paying interest on it. As a result, they flood the media with millions of dollars in advertising. They also encourage, and even pay journalists to test drive their newest creations and rave about them. Who is going to rave about, or even test drive a 2005 Dodge Grand Caravan? Who would pay for that? Nobody. But what if that vehicle filled your needs? Who could advise you? The experts keep saying to buy a new one. When you sign the purchase agreement for that new car, the instant depreciation might cover the cost of a good used car. As our parents did in the Great Depression, we may have learned to tighten up during the Great Recession. Good for us. We were possibly overdue.
The main concern people have about buying a used car is the possible maintenance expense. We in the repair industry get asked a lot of questions about this.
The most common question in our line of work is, "Should I put money into this car or sell it and buy another?" Here's the answer. First find what your car would sell for in its present, unrepaired condition. Ask some used car dealers what they would give you for it. Don't assume any private buyer will buy it with repairs needed. Second, look up the prices on cars you would settle for if you were to replace it. Internet or classified ads would do. The difference between these prices is your decider. If you would have to kick in more money to trade than you would to repair your present car, you are obviously better off to have the repairs done. If you would settle for a less expensive car, then you should trade and pocket the difference. That sounds un-American. We never settle for less than we had. The exception might be if you are upside down on your financing.
If you took out a five-year plan to finance it in order to get low payments, you may have found that the depreciation has outstripped the payments, and you now owe more than it's worth. Your alligator mouth bit off more than your hummingbird butt could handle, and you need to scale back to something you can afford. Your choices now are to either spend the money to fix your car, or spend the money to pay it off so you can sell it, whichever is the cheapest. There is no upside for you because you over-financed. Don't do that again.
The second most common question is:"What kind of car should I buy?" The answer is Rolls Royce. If that is too expensive the second choice is Mercedes Benz. Get my drift? It's not that they're trouble free. They're not. But after them, it's a crap shoot. Brand doesn't matter. There are lemons in every brand, and cherries in every brand. The trick is to pick the cherry and not the lemon. There are two ways to tell them apart. Either you know the owner and are familiar with the car's history, or you have a pre-purchase inspection done by an independent mechanic. Nothing else will do it. You can't depend on the service history on the Internet because all repair work is not reported. After raising the car, pulling the wheels and inspecting the car, a good mechanic will know more about the car than the present owner does. With a list of faults found and their correction costs, you have bargaining leverage against the asking price. That is always worth the inspection cost.
The alternative would be to crush all the used cars (like our government started doing with the Cash For Clunkers campaign) and have everybody finance new ones. The car companies will see a profit, the banks will see a profit, and we can borrow our way out of a jam we financed ourselves into. After all, what could go wrong if our banks are big and strong?