Used Car or Factory Certified Pre-owned? Consider Your Options

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Used or Factory Certified Pre-owned—Consider Your Options

courtesy of autocrunch.net

Are “Factory Certified Pre-owned” cars a good choice?

It’s important to think about all the choices before your decide on a vehicle

Excerpt from: THE AWARD WINNING: LAUREN FIX’S GUIDE TO LOVING YOUR CAR: Everything You Need to Know to Take Charge of Your Car and Get on With Your Life” 

The best answer is a definite maybe. For many people, certified used cars have become affordable alternatives to new cars. Let’s first define the two terms:

Used Car – Any used car is, obviously, pre-owned. Not all cars that are pre-owned are considered certified. A third party sale is usually considered a “Buyer Beware” issue and should definitely be checked properly by a certified technician.

Factory Certified Pre-owned – This type of auto is offered for sale by a dealer with the support of the vehicle’s original manufacturer, with warranties that extend beyond the vehicle’s initial coverage. The original manufacturer of the vehicle is using their dealership to inspect the vehicle. The dealer uses a checklist to determine if the vehicle is worth certifying. If it passes certain tests, it will earn an extended warranty.

Tip: Not all certified used car programs are the same. Review the various manufacturer certification programs to see which one offers the most complete coverage. You should carefully check what the certification means and what the warranty covers.

No matter if you choose pre-owned or factory certified, get the vehicle identification number (VIN) and invest in an independent inspection report to make sure that the vehicle has not been in a major collision or flood damaged.

Used Cars or Private Sales

When buying a used car, it’s often hard to find the exact car you want. I suggest you do some looking around and make a list of the potential cars that will work for you, and then test-drive them all. Make sure to use the internet—not just for finding a car but also to find out about recalls, technical service bulletins and recall information. There are also blogs and websites that have opinions from drivers of certain makes and models. Research will also arm you with more questions to ask the dealer or individual who is selling the car.

Rules for Buying a Used Car

Look for important clues that can tell you volumes about the quality of a used car dealer:

Reputation is everything – Look for locally well-known used-car dealers that back their advertisements with honesty, integrity and service. Ask friends and co-workers for their advice.

Test Drives Are A Must – The dealers you choose should let you take a car out for a ride. Drive all of the vehicles that interest you so you can get an up-close and personal look at the options. If the dealer won’t let you test drive the cars then walk away.

Records Required – Even a vehicle bought at a wholesale auction has paperwork. This will tell where it came from, its sales history and all factory repairs. Make sure you see the title before you make an offer. Lien releases must be attached to the title—or else don’t buy the auto.

Inspection, As Required– A seller should let you take the auto to your certified technician for an inspection. If a seller won’t let you have it inspected, it is a sign that you need to walk away.

Written Warranties For Sure – There should be a 90-day minimum warranty from a dealer or—at least—lemon law paperwork. There won’t be a warranty from private sellers. Be careful as those vehicles are sold “as is.”

Online Buying and Selling

Selling or Buying Details Are Important

In pricing your vehicle to sell on-line, you first need to know the minimum price you’d accept for your vehicle. If you don’t know your minimum price, research similar vehicle values online – just as you would in buying a car.

Determine what others are paying before you visit a dealer. There are websites that offer real market prices (that take into account all market variables) and give you bottom line pricing. These sites are usually updated monthly. This is a great way to find out what buyers are currently paying for new vehicles or what dealers and consumers are paying for and getting for used vehicles. Study – before you begin your negotiations.

Here are some websites to check out:

Auto Trader – www.autotrader.com

Edmunds – www.edmunds.com

Intellichoice – www.intellichoice.com

Kelley Blue Book – www.kbb.com

Also, consider your situation before you post a vehicle on any auction:

  • Are you trying to sell your vehicle quickly?
  • Are you “just fishing” for a price and are you willing to re-list the vehicle if it doesn’t sell right away?
  • Do you have another vehicle to drive?

TIP: If you post your auction without a “reserve” price the vehicle will sell for the final bid price. Consider using a “reserve” price auction so you can at least receive the minimum you will take for your auto. Start the bidding price low to entice bidders to look and continue to bid. Professional auctioneers use a low starting price to allow more bidders to participate in the auction. More bidders give the vehicle a better chance of selling at a higher price.

Note: With a No Reserve auction, the starting price is the actual starting price of your vehicle. However, since each bid could ultimately win, there are typically more bids driving the price higher.

Tips for a Quick Sale

Are you looking to sell your car in a hurry with price not as important as convenience? Make your auction a No Reserve auction with a very low starting price. The final high bid will win the auction.

Before you buy any used car from a private owner or a used car dealer, be sure to see a clean title that doesn’t have a lien on it. If it has a lien (a lien is a form of security interest granted over an item of property to secure the payment of a debt you need a lien release or there is NO deal!)

Where’s the best place to buy a used car?

Each used car resource has its strengths and weaknesses, so depending on your priority (price? selection? warranty?) there are a few options.

  • Craigslist
  • Ebay
  • Local papers from private or small dealers
  • Car dealers
  • Online auto stores

A lot of people turn to the internet when shopping for a car. Good idea? This is the best place to do your homework and compare prices, options and what the car is selling for in your area. Hybrids have a lesser value in smaller cities that don’t have heavy traffic and 4X4 cars have more value in the upper half of the country because of the winter weather.

What do we need to be aware of when shopping online? The Internet is a vast marketplace for buying and selling automobiles. The benefits? If you’re a buyer, your car choices are immense. If you’re a seller, your marketplace of potential buyers is huge. —— Although web sites such aseBayAutotrader, and Craigslist are very popular, I advise caution when buying and selling long-distance. Scams are very common.

When dealers advertise “certified” cars, what exactly does that term mean? This type of auto is offered for sale by a dealer with the support of the vehicle’s original manufacturer, with warranties that extend beyond the vehicle’s initial coverage. The original manufacturer of the vehicle is using their dealership to inspect the vehicle. The dealer uses a checklist to determine if the vehicle is worth certifying. If it passes certain tests, it will earn an extended warranty.

Tip: Not all certified used car programs are the same. Review the various manufacturer certification programs to see which one offers the most complete coverage. You should carefully check what the certification means and what the warranty covers.

FOLO: “I know certified cars tend to be much more expensive … are they worth the extra investment? You pay extra to buy a certified pre-owned vehicle, what that extra upfront cash really buys is peace of mind.”

Pre-owned is simply a politically correct way of saying used. The words “certified pre-owned” attempt to provide the assurance that the manufacturer has inspected the auto based on a certain checklist that is must meet to qualify for this status.

There are basically two types of certification: factory-certified and dealer-certified.

Usually dealer certification doesn’t add much, if any, additional cost to the sale price. The dealer inspects a preset number of areas of the vehicle, fixing any problems found, and then usually provides a limited warranty on that vehicle for a specified period (typically no more than 90 days), during which time that same dealer will make repairs under the terms of the limited warranty.

Without the factory overseeing the diligence and execution of the inspection or repairs, it is still up to the consumer to make sure the vehicle is sound. This will usually entail a trip to a trusted mechanic in addition to the dealer’s certification. All the consumer really receives with a typical dealer certification is a short-term limited warranty.

Factory certification means that the manufacturer decides what areas of the vehicle are inspected, overseeing the inspection and the repairs. Some factory-certified limited warranties extend for months rather than years, others can be the original factory warranty. Some include roadside assistance and free loaner vehicles when warranty repairs are needed. Because the factory underwrites the warranty, repairs can be made at any of its franchised dealers.

The factory certified pre-owned programs vary wildly, however they can add as much as 5 percent to the selling price of a used vehicle. It’s your decision.

Once you’ve found a car you’re interested in and you’ve called to ask all of the important initial questions, you want to go inspect the car …. What’s the main goal of this inspection?

No matter if you choose pre-owned or factory certified, get the vehicle identification number (VIN) and invest in an independent inspection report to make sure that the vehicle has not been in a major collision or flood damaged.

Look for an independent shop like that offers a multi-point visual Courtesy Check. We’ll look inside, outside, under the hood and under the vehicle … and then offer you a written report. There maybe a fee but it will save you money and frustration down the road.

While no inspection is guaranteed to find every flaw in a used car, a trained eye can help you avoid serious problems. Given the fact that thousands of dollars are at stake, an hour of your time and a hundred dollars is good insurance against the unknown.

You’re going to point out some things that many people may not know to look for … Let’s start with the exterior … What do you want to check out there?

Walk around the car looking for rust and damage that will give you an idea how the car was maintained and how much repairs or paint work it may need. Look for poor previous repair work— this could range from sloppy bodywork to improper repairs.

Visually inspect the tires for damage, mismatched brands, wheel damage, hanging exhaust and overall appearance.

What can you tell about a used car by looking at its tires?

Have a close look at the tires. Are they of well known reputable brand like Michelin, Goodyear, Bridgestone, or “no-name” kind of product? Are they all the same or different? Look at the tread wear. Note tire damage, tread depth and look at the wear pattern, irregular wear when one side is worn more than the other could mean alignment or suspension problems.

Anything inside that car that might suggest a car has high mileage?

The condition of the vehicle interior is another good indicator of how the vehicle was taken care of. Look at pedals, and then at the driver’s seat. Are they excessively worn out? Check all the seat belts paying particular attention to the one at the driver’s seat. Try to lock and unlock the drivers and passenger’s doors and the trunk with the key. Be concerned if you notice excessive use of the air fresheners, it could be used to block some bad odors, and some of them are hard to remove. Open the trunk. Is it musty and moldy? Water may be leaking somewhere. Check the spare tire, wheel wrench and jack. If the car has wheel locks installed make sure there is the key available. Check the instrument panel: do all the gauges work? Any warning lights such as “Check Engine”, “Airbag”, “ABS” that stay on after the engine is started? If the car has “Check Engine” or any other warning light comes on or flashing while driving, have a technician diagnose it before deciding to buy it; in some cases the problem could be very costly to repair.

Smoker’s car – some sellers disguise the fact that someone has smoked in the car with air fresheners and sprays. Once smoke gets into the vehicle’s headliner and upholstery, and it is impossible to remove the smell.

FOLO: You also say it’s really important to check out every single electronic feature of a car during the inspection?

Important areas to inspect are:

Major Systems and Components – Engine, Transmission, Brakes, Steering, Starting and Charging, Heating and Cooling, Lighting

Under-the-Hood Items – Battery, Radiator, Water Pump, Air Filter, Belts and Hoses

Fluids – Engine Oil, Coolant, Transmission, Power Steering, Brake, Windshield Washer

Under-the-Vehicle Items – Shocks and Struts, Brake and Fuel Lines, Exhaust System, Driveline

Let’s talk quickly about flood damage … Obviously a lot of people down in the hurricane zone may be vulnerable to buying a used car that has been flooded … What should you look for that might indicate this kind of damage?

Flood damaged vehicles are in all 50 states and Canada, don’t be tricked by hearing that a car is from up North. Any car can change hands, be titled washed or have been in a local flood.

Most of us don’t think about flood-damaged cars. Every time a hurricane or flood impacts some area of the country, automobiles are damaged. While they are often judged “total loss claims,” many are not destroyed by insurance companies. These vehicles are not safe! Many are filthy and are filled with bacteria and mold from sewage and water.

If you buy one of these cars – 

-There is no warranty from the manufacturer due to water damage!

-Many of these vehicles have electrical problems. If yours decides to quit on the highway, other cars could collide with you!

-If you are involved in an accident, your air bags may not deploy!

-Seat belts don’t function properly!

-Anti-lock brakes don’t work!

-You are driving a potential accident.

-You are creating a health risk for yourself and anyone that rides in the car.

These vehicles aren’t safe on the roads. Because of natural disasters in recent years, as many as 650,000 cars were damaged. The cars are complete SCRAP!

The Bottom Line on Shopping for A Car

My bottom line is don’t be afraid to walk away – there are hundreds of cars available and the right one is out there for you. I have a rule for car shopping: “If it’s meant to be – you’ll find it.” So don’t settle for an “almost.” Don’t fall in love with a car that might be the right color but does not meet your needs. Don’t catch yourself saying, “If it only had ABS or more trunk space or never had been in a flood.” Each of those cases wasn’t meant to be. The right auto is just around the corner, so keep looking!