By Brandon G. Hampton
Used cars - "pre owned" vehicles - are at record highs in terms of holding their resale value. It may be the economy (people need to stretch their dollars) or it may be the higher quality of cars built in the last ten years. According to J.D. Powers and Associates, vehicles, both domestic and foreign, built in the last ten years have increased in quality (based on average number of trips to the dealer's shop in the first three years of ownership) by almost three fold. That's a lot of improvement in overall quality, and may be one of the driving factors (no pun intended) behind more and more people switching to "used vs. new" when they pick up the next family-mobile.
To give you an idea about what kind of value you can expect, let's examine a scenario. We spoke with one man who in 2005 acquired a used 1998 Honda Civic LX Sedan M/T for $2,500. When he bought the car, it had 115,000 miles. He then drove it an additional 60,000 miles and spent another $2,700 on maintenance and repairs. After this round of repairs, he believes the car will run at least another five years without much trouble (maybe a few hundred dollars for small fixes). According to Kelly Blue Book, the car is now worth $1,200. He figures his total cost of operations is approximately $4,000.
If he had acquired a brand new Honda Civic in 2005, he would have spent about $14,000 for the car + $1,000 for tax, title and licensing. If he had put a down payment of $2,500 toward the car and financed the rest at 5% for five years, it would add an additional $1,650 in interest. Between now and then, if he drove 60,000 miles, the car's value would be $4,800. If we assume there are no repairs except for $400 for tired, the cost of operations is $14k-1k+1.65k+0.4k-4.8k = $12.25k.
$(12.25k - 4k) = $8.25 k of savings buying a used car.
"Heck," he said, "I could get a whole new rebuilt engine for $2k and STILL be THOUSANDS ahead."
Many people are not aware of the best way to actually go about acquiring a used car. Sure there are dealerships and private sellers, but there is a secret most insiders do not want you to know.
The insider's secret to buying used cars is auctions.
You may have heard of car dealers that purchase their inventory at an auction - due to the low prices, high selection, and lack of hassle (just pick out the car or truck you want, make your bid, and drive it away). But did you know that you can get in to an auction yourself - for free?
Blok Charity Auto Clearance is an example of a charity that is open to the general public.
Auto auctions can be really fun. Blok has over 450 wholesale-priced cars to select from. These cars are donated by giving individuals and benefit a charity.
Used cars are a great value and can be had for an even better price when you acquire them through an auction.
To give you an idea about what kind of value you can expect, let's examine a scenario. We spoke with one man who in 2005 acquired a used 1998 Honda Civic LX Sedan M/T for $2,500. When he bought the car, it had 115,000 miles. He then drove it an additional 60,000 miles and spent another $2,700 on maintenance and repairs. After this round of repairs, he believes the car will run at least another five years without much trouble (maybe a few hundred dollars for small fixes). According to Kelly Blue Book, the car is now worth $1,200. He figures his total cost of operations is approximately $4,000.
If he had acquired a brand new Honda Civic in 2005, he would have spent about $14,000 for the car + $1,000 for tax, title and licensing. If he had put a down payment of $2,500 toward the car and financed the rest at 5% for five years, it would add an additional $1,650 in interest. Between now and then, if he drove 60,000 miles, the car's value would be $4,800. If we assume there are no repairs except for $400 for tired, the cost of operations is $14k-1k+1.65k+0.4k-4.8k = $12.25k.
$(12.25k - 4k) = $8.25 k of savings buying a used car.
"Heck," he said, "I could get a whole new rebuilt engine for $2k and STILL be THOUSANDS ahead."
Many people are not aware of the best way to actually go about acquiring a used car. Sure there are dealerships and private sellers, but there is a secret most insiders do not want you to know.
The insider's secret to buying used cars is auctions.
You may have heard of car dealers that purchase their inventory at an auction - due to the low prices, high selection, and lack of hassle (just pick out the car or truck you want, make your bid, and drive it away). But did you know that you can get in to an auction yourself - for free?
Blok Charity Auto Clearance is an example of a charity that is open to the general public.
Auto auctions can be really fun. Blok has over 450 wholesale-priced cars to select from. These cars are donated by giving individuals and benefit a charity.
Used cars are a great value and can be had for an even better price when you acquire them through an auction.
About the Author:
Learn how Blok Charity Auto Clearance can help you find your next used car. Watch this video about how car auctions work and what it can do for you.
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