Formerly an economics and humanities student at UCLA, Oe Kaori is now an intern for the United Nations.
A Used Vehicle is a Money Saver but Can be a Headache
How can we get more value for our money? When I bought my first car, I paid $1,895. If you add in the gas and maintenance costs, I'd paid around $2,400. Maybe you paid only $1,200 for your car. Chances are it's a 20-year-old vehicle that's already paid for. The last time you changed the oil, you probably dropped close to $60. If you add in the sticker shock and the gas costs, your first used car probably costs at least $3,200 per year. It's not that bad. I bought a 2007 Honda Accord for $1,895.
The bulk of that money will be cash, even though it's probably hard for you to put a dollar sign on it. The insurance is additional and the registration fees will also be tacked on. As long as you don't have a mortgage, your car payments don't seem like that much money if you get a pre-owned or new. But when you break down the numbers, they're actually quite significant. And when you start piling them on and keep them there year after year, it becomes something of a slippery slope. While I'm still amazed that I bought a car for $1,895 (my car is still running great), I could argue that you're getting a lot of value when you buy a used car. And if I were financially savvy, I'd go even lower, and buy a used car from a low-quality car manufacturer (i.e., the one most of us are used to buying) for $1,000. Sounds crazy but I am trying to save money just in case I buy a junker for $1,000.
My car runs great. It has 60,000 miles on it, and has never needed any repairs. And the car is a safe, reliable car for my son. After that, I'd probably save even more by selling it or trading it in for a new car. The reason you're driving a used car is because you absolutely need it, especially if you live in America. The transit system here is poorly constructed, sorry to say. Now I'm an optimist. I think we can change our situation. We could buy our first car for $1,000. And we can certainly rent our vehicle. If you've already got a lease on your vehicle, there's no reason not to just break it up.
Saving in the Long Run
I suggest leasing something as affordable as a mini-van with a monthly payment under $200 if that's possible nowadays. You've got to start somewhere. Try it. See how much you can get out of that first payment. We're all lucky to be able to drive these cars. Some have two or more. But those cars have a story behind them. That's why we take care of them. If we'd stop treating our cars as disposable objects, we'd save money.
We'd actually feel like we were saving money when we replace our car. How much will my car depreciate in five years? Think about it: The whole point of having a car is that you want to drive it. When you lease your car, you don't own it. The dealership gets paid. And you get hit with a monthly payment that puts more money in the company's pocket than it will ever spend on your car.
But it's not right. And most people don't even realize it's eating their income. Buying a used car is a lot like shopping for a new one — but with all the uncertainty around quality and reliability.
Here are some tips to help you navigate the used car market.
Start your research online before ever stepping foot in a dealership. Find honest reviews from fellow used car buyers and look for photos of vehicles that have a good reputation. Check the DMV record of your desired car to see if it has been in an accident. See if any warnings have been issued by the manufacturer. Be sure to understand the terms of the car’s warranty. Many offer limited or no coverage for previous accidents. If it's by sale from a private owner this option is a no go.
Never buy a car that appears to be a low-mileage model. Car mileage can be found on the dash, the center cap or the owner’s manual. Don’t trust the mileage. Look at the odometer to be sure. Beware of “certified pre-owned” cars with miles less than the number on the dealer’s used car sign. These cars may not be sold as-new, which means there may be hidden, much higher mileage. Check the Certified Pre-Owned guide to see which cars are the best deals in your price range.
Get a list of dealers in your area and check to see if they participate in the “Buck a Buy” program. Ask for the vehicle’s manufacturer-backed recall. Avoid a car with problems. Look for any outstanding recalls. Check your owner’s manual for the most up-to-date recall information.
Use a vehicle history report to see if there have been any open safety recalls. Know your “no buy” list. Not everyone will be comfortable driving a used car. If you are looking for an extremely reliable vehicle that you’ll keep for years, consider an old car that’s at least 15 years old. If you need to drive it for two to three years, buy a reliable and sturdy vehicle.
If you want a high-mileage vehicle that you can sell after two or three years, stick with cars that have fewer than 70,000 miles. Be leery of vehicles in need of new tires and brakes. There’s a high chance they may need work, which will delay their resale value.
Use a strong "no buy" list. This is a list of cars you would never buy, even if you wanted to. Be wary of used cars with untrustworthy reputations, poor quality or no warranties.
These are some of the common used car attributes you should consider:
Owner’s manuals and dashboard panels
Vehicle history report and certified pre-owned status
Transmission fluid, batteries and brakes
Most of these are standard qualities for any used car. The only differences are the age and condition of the vehicle itself.
Use a trusted dealer
Telling the seller you are looking for a reliable used car is much better than finding out you’ve purchased a lemon. A trusted car dealer can ensure you are getting a good deal.
Don’t get hosed by selling the car before it’s ready. A car dealer is still responsible for all items in the car, including tires and brakes. Don’t give them the chance to scam you.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Oe Kaori
Oe Kaori (author) from Yokohama Japan on October 27, 2020:
The American transportation system is difficult compared to Japan. We both have a love hate relationship with our used cars
Kalpana Iyer from India on October 27, 2020:
I love my car but hate driving :) So I guess you can say it is a love and hate relationship as well. Thankfully for me, the public transport system where I live is amazing. I often think a used car would have been better for me.