With the price of a new car getting higher and higher each year, many buyers choose to buy used cars instead. The price of a new car can easily equal a year’s pay for many people, so buying a used car makes sense. But there are risks associated with buying a pre-owned vehicle. What if is defective? What if it is a lemon law buyback? Once should always be a bit suspicious of a used vehicle. After all, if it is a great buy, then why did the original owner choose to part with it?
To resolve some of these issues, as well as to compete with volume dealers of used cars such as Carmax, the major auto manufacturers have introduced the concept of a “certified used car.” These cars are inspected for problems, repaired if necessary, and offered for sale with a warranty that is better than the one typically offered with sales of used cars. In exchange for this added peace of mind, the buyer pays a higher price than he or she otherwise might.
This program is good for dealers, who find the cars easier to sell, and for the manufacturers, who get a fee from the dealers in exchange for certifying the vehicles. The problem for the consumer is that there are cars being sold as certified used cars that may not really be certified. Worse, some of these cars have problems that are so severe that they possibly shouldn’t be sold at all.
Some states have rigid laws that prevent cars with certain types of damage, such as from fire, flood, or a severe accident, from being sold within that state under any circumstances. And yet there are reports of such vehicles having been transported to neighboring states, where their titles can be “laundered.” Some of these cars have then been sold as certified used cars.
There are several lawsuits pending in California over the sale of such cars, and the problem will continue to exist as long as there is no national standard regarding the sale of used cars. Does this mean that buyers should steer clear of certified used cars? Of course not. What it does mean is that buyers should exercise caution when they shop for a used vehicle, whether it is certified or not. And that is just plain common sense.
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Used cars are not as risky a purchase as they used to be. Thanks to certification programs, the industry is changing for the better, and more Americans are turning to used cars for better value.
Certification offers a way to weed out unscrupulous used car dealers who might sell damaged cars. The nearly 600,000 vehicles damaged by floodwaters from last year’s storms are prime candidates to end up as part of such scams.
As more car buyers turn to certified vehicles, the number sold this year is expected to increase significantly from the 1.6 million purchased in 2005. Besides costing less than their new-car counterparts, certified vehicles also come with many of the same benefits, eliminating much of the guesswork associated with buying used.
Be wary, however, because not all certification programs are created equal. To help sort out the best from the worthless, used-car experts offer the following tips:
Certified by whom? Make sure you know who sets the standards for the certification program and who makes certain they’re being enforced. Look for a manufacturer-backed program-the best people to certify a car are the ones who built it and specialize in that make. Most manufacturers will offer a limited warranty in addition to honoring the car’s original warranty.
Do your homework. Research the makes and models that make sense for your driving needs. Check safety and reliability reports published online and prices from your whole area.
How was the car certified? At a minimum, a car should have a detailed mechanical inspection and a vehicle history report. Carfax Vehicle History Reports are a mandatory part of the certification process for 80 percent of today’s manufacturer-certified programs.
What does it get you? The certified used car you’re buying probably comes with an extended warranty. Make sure you know exactly what this covers and for how long. You can always add additional coverage.
Ask for more. If you want roadside assistance, options added to the car, free oil changes or anything else, don’t be afraid to ask.
Tags: Assistance Options, Car Buyers, Car Experts, Certified Used Cars, Check Safety, Counterparts, Expert Tips, Extended Warranty, Floodwaters, Guesswork, Homework Research, Makes And Models, Mechanical Inspection, Prime Candidates, Reliability Reports, Roadside Assistance, Safety And Reliability, Scams, Vehicle History Report, Vehicle History ReportsRelated posts
What The New California Car Buyers Bill of Rights Means To You
Beginning on July 1, 2006, California granted its car-buying residents a new set of protections under the Car Buyers Bill of Rights. Not only will these new rights change the way cars are bought and sold in California, they’re already spreading across the country and being adopted by other states as well.
The protections under the new law apply to vehicles (cars, trucks, SUVs) purchased in California for personal use from a dealer/dealership. They do not apply to private sales, out of state purchases, commercial vehicles, RVs and motorcycles.
What are the protections?
1. The Two Day Return
Used car buyers now have the opportunity to protect themselves with a two-day return option. This is designed to help buyers who may not have had the time to have the vehicle properly inspected by a mechanic, for those who are purchasing a car “as is,” or for those car buyers who might have succumbed to the pressure to buy on the spot.
There are a few limits on the two-day return protection. First, the option only applies to used vehicles purchased through a dealership for personal use that cost $40,000 or less. Second, the dealership can charge you for this option (anywhere from $75 to $400, plus a restocking fee, all depending on the price of the vehicle). Additionally, the vehicle must be returned within two days, having been driven fewer than 250 miles, and be in the same condition as when it was purchased.
2. Trade-Ins
With the two-day return option, the dealer is required to hold onto your trade-in until the option expires. If the dealer sells your trade-in early, you’re entitled to the vehicle’s fair market value or the price listed in the cancellation agreement, whichever is more.
3. Certified Used Cars
In the past, any used car that a dealer has had inspected by a mechanic could be advertised as a “certified pre-owned vehicle.” This is no longer the case. Dealers can no longer advertise (or sell) certain problem cars as “certified pre-owned vehicles.”
4. Seller Disclosures
Under the new law, auto dealers must provide the following in writing:
a. The price of the vehicle without extra options and add-ons.
b. The specific price for add-ons, such as anti-theft devices, fabric protection, extended service contracts and “gap” insurance.
c. A copy of your credit score if you’re getting a loan through the dealership. Your credit score will range from 300 to 900, and reflect your credit worthiness as primarily determined by the timeliness of your past loan payments. If your credit score is high enough, you can often benefit from lower interest rates.
5. Limit On Interest Rate Markups
It’s a common practice in the industry for auto lenders to pay dealers an incentive for getting buyers to pay a higher interest rate than they should be paying, according to their credit history. This additional boost in the interest rate is referred to as a “markup.” The new California Car Buyers Bill of Rights limits the markup a dealer can receive from a lender to a maximum of 2.5% for loans up to 60 months and to 2% for longer loans.
The New California Car Buyers Bill of Rights is designed to make it safer for you to purchase your next used vehicle through a dealership without fear that you’re going to get stuck with something you either don’t want or something that doesn’t live up to its advertising. Knowing your rights can save you both months of headaches and significant money, but only if you take advantage of them.
Tags: Bill Of Rights, California Car Buyers Bill Of Rights, Cancellation, Car Buyers, Case Dealers, Certified Used Cars, Commercial Vehicles, Few Limits, Mechanic, New California, Personal Use, Pre Owned Vehicle, Private Sales, Purchasing A Car, Restocking Fee, Return Option, Rvs, State Purchases, Trade Ins, Way Cars