Warranty trumps price when it comes to buying a used car
In the market for a used car? If you have been doing your research, you’re probably seeing some wide ranges in prices for similar used cars.
For example, a 2011 Toyota Camry in good condition that is nicely equipped with 50,000 miles on the odometer can range in price from $11,600 to $13,000 all the way up to $14,600. The first price is for a private seller not affiliated with a dealership. The second price is a typical dealer price (either one affiliated with a specific brand like Toyota or independent) and the third is a certified pre-owned used car. Those are used cars with special warranties.
That’s a wide range and your first instinct might be to go on price alone. That might not be the right decision. You’re going to want to strongly consider buying your next used car from a dealer.
What’s the primary advantage? You have the law on your side. In Nevada, regulations require a dealer selling a used car with more than 75,000 miles on the odometer to inspect the engine and drivetrain and tell the buyer what was discovered. (Never buy a used car from a dealer without this report.)
The federal government, through the Federal Trade Commission, has the Used Car Rule. It requires used car dealers to display a window sticker, known as a Buyers Guide, on the used cars they offer for sale. It discloses whether the dealer offers a warranty and, if so, its terms and conditions, including the duration of the coverage, the percentage of total repair costs the dealer will pay, and which vehicle systems the warranty covers.
That leads to a second reason to consider buying a used car from a dealer: warranties. Private sellers don’t offer them. Typically, once you take possession of a used car from a private seller, the transaction is done. You have no recourse. That’s not true with a dealer, who can offer a warranty. Your used car is going to get fixed.
Another good reason to go with a dealer is financing. It’s smart to arrange your own used car financing ahead of time so you know what you can afford. However, dealers have access to many different sources of credit. A dealer might be able to find you a better deal than what you arranged because of their partnerships.
Selection is another reason to consider buying a used car from a dealer. There might be five similar Camrys, for example, on the dealer’s lot for you to consider. Seeing five Camrys from private sellers requires setting up five appointments and going to five different locations. You can put a price on convenience.
Good dealers who have an established business are also going to be concerned about their reputations. They will work with you to solve problems, especially in this day and age of being able to post online reviews.
Sierra Elbert, sales adviser at Las Vegas-based DriveTime Used Cars on South Decatur Boulevard, said the dealership works with consumers who have no or bad credit in order to rebuild or establish good credit.
“It’s one of our biggest perks,” she said. “We’re also our own bank so we don’t run credit through multiple banks.”
Elbert added that DriveTime offers various programs to its buyers including the Champ program, which allows the driver to get into a new vehicle or obtain a second one when their loan balance is $4,000 or less, as well as two lease programs that cover the registration during the first year, oil changes and provide a five-year, 50,000 mile warranty.
“We want to make sure everything is covered,” she said. “Not everyone has great credit so we’ll help you build up your credit to get you into your dream car. We’re here to help them out.”
Frankly, head to head, dealers aren’t going to be able to beat private sellers on price. However, those extra dollars you spend upfront can help you save money in so many ways. Don’t buy a used car just on price in most cases. The dealer is usually the better option.
