When it comes time to buy a car, one of the key decisions one has to make is whether to buy new or used. To me this is a no brainer. Cars tend to depreciate massively, so why not try to avoid some of that cost? Take the Volkswagen Phaeton, for instance. Albeit an extreme example, the 2002 Phaeton retailed in base trim for $94,600 and now can be had for about $18,000, a $75,000 drop. Are there any prohibitively bad downsides to purchasing used? I can only think of three reasons and they are largely avoidable.
It is true that it can be difficult to tell if the previous owner(s) took care of the vehicle. While one can ask for maintenance receipts, or use a service such as CarFax to see if the vehicle was ever in an accident, these sources doesn’t reveal if the car was taken to a race track, or just simply abused. Would you like this man’s vehicle, for example?
There is an easy solution to this issue, however, called Certified Pre-Owned. If a car meets certain criteria, then a manufacturer or a dealer labels it CPO’d. Essentially, it has a stamp of approval stating that the manufacturer or dealer believes that it is a “good” used car. This raises the price slightly, and it also means that the car is likely fairly new, mitigating some of the money one can save by buying an older car, but it also means that it is likely a solid used car. There are also usually special warranties which come with Certified Pre-Owned cars, so there is less risk of losing money on costly repairs.
People also tend to want the latest and greatest cars. With a CPO’d car, however, the car is pretty much the exact same thing as would currently be on showroom floors. There are even some CPO’s which are the current model year – cars which a person bought and then promptly sold back. Or perhaps someone is interested in purchasing a very specific vehicle, with a rare color scheme. Given the wealth of used vehicles, if one searches long enough, it seems that such a car would have to exist as a used car somewhere. If there aren’t many used examples available, such as with exotic sports cars, the buyer’s main concern would likely not be with the cost of the vehicle.
Stacking the negatives up against the positives should reveal the obvious: buy used.