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Why Used Cars Aren’t As Bad As You Think

Nancy Dunham

Do you typically head straight to the new cars when it’s time to buy? You could be spending more money than you need to. Old wives’ tales abound about used cars—that they’re lemons, they don’t have much life left in them, and they’re likely ready for the junkyard—are many times not true.

Yes, there are potential downsides to used cars. But there are ways to guard against them. We spoke to experts and compiled a list of the safest ways to shop for used cars as well as some common pitfalls to avoid.

3 Types of Used Cars That Offer the Best Deals

1. Certified Pre-Owned Vehicle (CPO)

Certified Pre-Owned Vehicles can only be purchased through dealerships, not private owners. These vehicles have undergone multipoint inspections by certified technicians to ensure they meet manufacturer standards. Once a dealership certifies a used car and it is listed for sale, the manufacturer often adds benefits to it such as an extended warranty and roadside assistance.

“We always recommend buyers consider CPOs,” says Matt Smith, editor at “Luxury car manufacturers used to be the only ones offering CPOs. Now almost every manufacturer offers CPOs.”

That doesn’t mean that all CPOs come with the same guarantees, though.

The warranties, roadside assistance availability and other CPO guarantees vary, and manufacturers have assorted eligibility requirements—mileage, age and other variables. Insist on a list of specifics for each used car you consider and compare the benefits.

Jason Manning, State Line Nissan, Kansas City, Miss. notes further that although Nissan offers a 7-year, 100,000 mile limited power train warranty on CPOs. In contrast, new cars bought from Nissan — and many other automakers including Chevrolet and Chrysler — only come with 3-year, 36,000 mile power train warranties.

2. Cars That Were Previously Leased

People who lease cars have financial incentives to keep the car in excellent mechanical condition with overall low mileage (generally 10,000 miles or less). And many lease agreements require drivers to keep their vehicles spotless inside and out while logging regular maintenance schedules.

Another benefit of buying a formerly leased car is that it is generally sold by dealers. At the end of each lease period, the dealership inspects the vehicles top-to-bottom to search for deficiencies, including: mechanical problems, dents, dings, scratches and scrapes, cracks or pitting in windows, abnormal and excessive wear and tear, and rips and stains. Dealers report their findings to the manufacturer. The manufacturer then decides if the person that leased the car owes any additional fees.

“Most manufacturers are very particular about the condition of cars that are returned after lease,” says Manning. “That’s one reason used leased cars are popular.”

You can buy a retired leased car for less money than a new version of the same car, and there’s a good chance it’ll come with more extras.

Obviously those [retired leased cars] have a bit of wear and tear on them, but you don’t take the depreciation hit you get as soon as you drive a new car off the lot,” explains Manning.

3. Former Rental Cars

Buyers often think that rental cars are ticking time bombs due to the abuse they endure from their short-term drivers. Although most people who rent cars hunt for bargain gasoline — it’s common knowledge that few if any car renters fill the vehicle’s tanks with brand name premium gasoline — they are also held to strict standards in caring for the cars.

Almost every rental car agreement requires renters to review the car for damage prior to taking it. When a driver returns a rented car, rental company representatives inspect it for damage.

Yes, rental cars have endured multiple drivers’ idiosyncrasies but Brad Hines, author of Autoprofitz, notes “logically, this is no worse than a car with one terrible owner.” Keep in mind that rental car fleets have designated mechanics and maintenance schedules to protect their assets. That means they are regularly inspected and serviced by qualified technicians.

How to Spot Lemons: What to Avoid

Vehicle history reports are an invaluable tool to track a car’s damage and repair history. But remember that if a private mechanic repaired the car then it likely wasn’t reported. That means you might not find out a car was in a major accident until you bring it to a dealership for a trade-in.

Don’t be shy about going beyond the vehicle history report.

Consider requesting permission to bring a used car to your private mechanic before buying it, or bring a private mechanic with you to inspect any vehicle you’re considering, suggests Manning. Most auto dealers and legitimate sellers welcome such inspections.

Finally, check for open recalls on any used car you might buy. Obtain the Vehicle Inspection Number (VIN) from the car and check for recalls on the government website. To find the VIN, open the driver’s side door and look at the door post where it latches when closed.

Don’t Forget Insurance

More good news: You may pay less to insure a used car than a new car due to its lower perceived value.

If you finance, you will still need to buy collision insurance, just as you would if you bought a new car. Most lenders want car buyers to have collision insurance until they have paid off the debt.

But wise car owners don’t stop there. Yes, a car is a major purchase and buying one may make you feel financially stretched. But auto insurance can save you from financial disaster if an accident occurs, especially if someone is injured or property is destroyed.

Smart car buyers know that there are plenty of bargains in the used car lot. Follow the experts’ advice to snag a great used car at a bargain price.

READ MORE: How to Boost Your Car’s Sale Value

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