Used cars are often all lumped into the sad reputation of being lemons. Purchasing a used car has become taboo, the last resort for people who needed something- anything- to get them to work regularly. But the truth is, not all used cars are bad. In fact, there are many layers to what makes a used car a wise choice. The times are a-changin, and affordable used cars are no longer a gamble, but a strong consideration for many drivers. However, as with any purchase, there are some things to be taken into account when determining whether or not the used car you are looking at is a good choice. And we are going to go over those things today.
The Argument for Used Cars
First off, there are plenty of compelling reasons to buy a used car, but the main reason anyone skips the new car lot and starts scanning the used cars is affordability. According to data collected by the popular finance company, Lendingtree.com, the average cost for a brand new car in 2019 was $40,000, with an average monthly payment of $550. On top of this, you need to factor in insurance, which averages around $200 a month, taxes and registration costs that vary from state to state, and fuel and maintenance costs, which fluctuate seemingly by the minute. And to top it all off, a new car starts to depreciate the minute it leaves the lot. Overall, you are getting more for your money when you buy used.
We also live in an age of technology that allows for vehicle reports like CARFAX or AutoCheck to be available online for anyone to use. Simply type in the VIN of the vehicle in question, and you will receive a full vehicle history so that you know exactly what you are getting into with the purchase. Plus, if you want to be extra confident in a car’s value, you can get a certified pre-owned vehicle. These are manufacturer-warrantied, low mileage, younger, but still definitely driven vehicles. Just as with the vehicle history reports, this reduces the sense of risk. Someone has checked this out. We know what has been wrong with it, and it’s been fixed. CPO vehicles are a wise investment.
So What Makes a Car Affordable?
Your budget is something only you can determine, and there are plenty of online calculators and financial resources that can help you with the math. One common mistake drivers make is including calculations only for the monthly payment, which, as mentioned, is only the big chunk of the equation. If you drive frequently or long distances, your fuel budget will be much higher than someone with a minimal Monday-Friday commute. If you have a few speeding tickets or an accident in your past, your insurance rates will be much higher than someone who has a clean driving record. Some states also require comprehensive coverage in addition to collision coverage for vehicles that haven’t been fully paid off, as well, which can ratchet that cost up quickly. And then there’s maintenance.
The truth is, some cars don’t age as gracefully as others. Though the argument for buying a used car is very strong, you must use all available resources when researching a used car in your budget. An “affordable used car” can turn into a “huge investment” very quickly if you don’t check the vehicle history as well as research the year, make, and model of vehicle that has caught your eye.
As stated earlier, we live in the age of technology. Websites such as iSeeCars, Consumer Reports, CarMD, and more are on the prowl for information about vehicle reliability, and how that changes over the years. They use this information to publish regular reports that gather details like the average price of a used vehicle, the percentage with over 200,000 miles, and National Highway Traffic Safety Administration ratings.
These reports can mean the difference between dropping major dough on a lemon, and wisely investing in a previously owned vehicle that will carry you reliably into the future. Furthermore, learning about the year, make, and model of vehicle that beckons to you from the used car lot is as simple as an online search. And with all that in mind, there is much more to an affordable used vehicle than the initial price.
What Can I Learn About Vehicle Value?
Reading online reviews about cars isn’t a bad idea, but remember- those are highly subjective. Just because an internet stranger didn’t like their car doesn’t mean you won’t like yours. Instead, value is mainly determined by objective things – facts like “how much did it cost to repair the engine completely” or “how often did warning lights come on?” These are facts that are important to know when it comes to determining whether that “affordable used car” actually fits in your budget.
CarMD releases a very interesting annual report that compares various years, makes, and models of vehicles with the frequency of check engine lights coming on, along with the most common reason the check engine light comes on. As noted in a recent Forbes.com article by Jim Gorzelany, engine repairs are some of the most costly and unavoidable problems vehicles can encounter. Frequently, this is related to the emissions system, ignition coil, spark plugs, or oxygen sensor. These issues range in cost from $200-400, which can either be a jaw-tightening credit card transaction, or an all-out tragedy, depending on your budget. Even worse, it can be a catalytic converter issue, power-steering control unit failure, or transmission issue, which spikes that price into the thousands. Suddenly, that affordable used car is a money pit.
Checking reliability reports, however, can help mitigate these surprise expenses, though nothing can completely eliminate a surprise repair bill. For example, a quick look at CarMD’s Vehicle Health Ranking indicates that the 2017 Honda CRV very rarely has the check engine light come on, but when it does, it requires an oil and filter change. The 2017 Honda Civic has a slightly higher incidence of check engine alerts, but the most common repair is listed as “Tighten/Replace Fuel Cap.” That fits in everyone’s budget.
Anyone can determine whether a vehicle has the features they want, but reliability is a different ball game. Reliability is often determined by mileage versus price. According to iSeeCars.com’s analysis of over 6.1 million cars from 2011 and beyond, the Honda Civic is the small sedan most likely to be driven the longest, with 2.3% of these vehicles being driving over 200,000 miles. That makes it 5.8 times more likely to be driven longer than other vehicles in its segment. At the same time, the average used car price for a 2012 Honda Civic conducted by the same site is $9,552, making it cumulatively the winner of Best Used Passenger Car Under $10,000. This is the type of research to do and the information you need in order to find the best affordable used car that is not a lemon.
The Bottom Line
The bottom line is: there are more compelling reasons to buy a used car than ever before. In fact, car manufacturers incentivize the process with CPO programs. But just because a used car is within your budget at the lot, doesn’t mean it’s a good overall value. In fact, quite the opposite may be true.
The bad news is that there is no crystal ball psychic predictor for a car’s lifespan. The good news is that there are plenty of resources that can help you gauge the risk factors. When considering a used car that appears to be in your budget, use the tools provided by the internet to determine overall value. That can include checking the history report, as well as looking at figures that will tell you how frequently that vehicle has required repairs, and what types of repairs might be in your future. That way, you can start saving now, or look at another vehicle option. Additionally, you can gauge how long the vehicle lasts by viewing data that combines overall mileage, which can give you an idea of overall reliability.
A little extra legwork at the offset can save you from having to make that proverbial lemonade, along with outrageous payments to the service garage.
