Your Guide to Purchasing a Pre-Owned Vehicle

Aug 24, 2020
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Buying a pre-owned vehicle in premium condition has consistently offered excellent advantages for those in the market for an affordably-priced car. With cars now built to operate more reliably and run longer than ever before, it could even be argued that buying a late-model used vehicle makes even better economic sense these days than it did in decades past. Purchasing used allows you to buy a higher-quality car for far less money, and save a bundle on insurance premiums, taxes and registration. In addition, you can wisely sidestep the steep hit you’ll incur in depreciation, which can erode the value of a new car by more than 20 percent in the first 12 months of ownership. To put more money back in your pocket, ensure you get a great deal on the right used car for you, and avoid common pitfalls, keep these pointers handy:

Find out how the vehicles you’re considering stand up to their competitors: Once you have narrowed the field to a few vehicles, it can be helpful to find out what the experts have to say on how they compare to others in their class. Although you can’t count on an unbiased opinion from the dealership, you can get it through online reviews and ratings. Consumer Reports is a reliable source for ratings on vehicles and a comparison of similar models according to criteria such as performance, safety, maintenance costs and reliability. Consulting a resource like this can also alert you to problems that could be stress-inducing and costly. You may even find it helpful in directing you toward a better vehicle in your target price.

Do your research on the internet, not at the dealership: One of the best ways to maintain control of the buying process is to start your car shopping online, and to gather as much information as possible before venturing out to a dealership or to meet a private seller. In fact, virtually all aspects of the negotiating process can actually be done online or by phone, and this can work to your advantage, as it’s easy to email or call with a request for a counter offer from a competing dealer.

Don’t hesitate to branch out in your online search: You can find plenty of information on vehicles and pricing on used cars in your area using dependable, well-known sites like TrueCar, kbb.com (Kelley Blue Book) and Edmunds. But Carlton Wolf’s Auto Cheat Sheet recommends keeping the following sites on your radar for access to clearance prices in your area: RydeShopper, CarsDirect and MotorTrend. You can use these sites to narrow your search by factors such as year, make, model, transmission type, price, mileage, color and more. Services like these also connect you directly with managers to provide you with free, no-obligation price quotes, which you can use to compare offers, and motivate the seller to lower their price. As Wolf advises, keep in mind that the price the dealership advertises is simply their starting offer. When you ask for a price quote online, they recognize that they have lots of competition from other sellers, and are therefore motivated to make an offer will reflect this.

Let the dealership know you have options when it comes to financing: Dealerships may mark up the interest rate of a loan for which you may be qualified, so it pays to compare rates and terms from different lenders. By working directly with a lender, you may also have the opportunity to respond directly to any questions or issues that could stand in the way of receiving a competitive offer. But because large commercial banks and online financial firms tend to have more rigid policies in place in order to process a large volume of applications, you may need to look elsewhere for this level of personalized service. Organizations like your credit union often have a bit more latitude to work with you based on your individual situation and your relationship with them. Furthermore, they may be able to provide you with a lower-rate loan.

Estimate the seller’s cost to make an astute offer: You’ll negotiate from a much stronger position if you have some idea of what the seller might have reasonably paid for the vehicle. This way, you’ll have a sense of the lowest offer that they might accept with an eye on their bottom line, recognizing that they aim to make at least some level of profit on the vehicle. There are several strategies that can give you an idea of the market price of a used vehicle. For instance, you might check trade-in values from Kelley Blue Book. Just make sure that you include correct information when it comes to details like the year, trim, mileage and overall condition. In addition, the site cars.com gives you access to the wholesale or auction value of a car, which is the amount a dealer might pay for it. Also, keep in mind that the dealership will have some reconditioning costs on top of what they pay to acquire the vehicle, even though they may be minimal. A reasonable offer from you will account for this.

Don’t get too fixated on the monthly payment: Although this may seem a reasonable approach to your budget, it’s not the best way to ensure you get the best price on a car, or to protect your financial security. By extending your loan payments out over a longer period of time, the dealership may be able to get you into a car that would otherwise seem out of your price range, and offer you what sounds like a reasonable monthly payment. But because cars can depreciate rapidly, this financial arrangement can put you at risk for being “upside down” on your loan. In other words, you can find yourself owing more on the loan than the vehicle is actually worth —not a stable place to be. In general, you’ll find that you can get a lower interest rate on an auto loan, and  better support your long-term financial health, by keeping loan terms on a used vehicle to 36 months.

Get a vehicle history report: Don’t rely on the dealership or seller to provide you with an honest assessment of a vehicle’s potential problems, or to disclose all pertinent details about the car. Before you agree to a purchase, it’s critical that you run a background check on the car with a service like Carfax or AutoCheck. All you need to do to acquire one is to pay a small fee and provide the vehicle identification number, or VIN. You’ll get access to vital information on the vehicle such as the number of owners it has had, accidents or flood damage, insurance claims, and even if the odometer has been rolled back. What’s more, it can reveal if the car has any liens against it, or if it has a salvage or branded title (vehicles that have been damaged in such a way that the insurance company opted to replace rather than repair it). For a more in-depth assessment of whether a car will be a good buy, it’s wise to get a pre-purchase inspection from a third-party mechanic.

Don’t overlook a certified pre-owned vehicle: When purchasing used from a dealer, a certified pre-owned vehicle is often well-worth your consideration. Not only do these cars look and feel almost new, but they offer additional assurances as they have a very low risk of mechanical problem. CPO cars have been inspected, refurbished and certified by a factory-trained mechanic What’s more, they may come with certain benefits such as extended warranties and special financing. As Kelley Blue Book asserts in “How to Buy A Used Car in Ten Steps,” the warranties offered on certified cars may even be superior to those you’ll get with the purchase of a new car.

Not interested in haggling over prices, but do want an excellent deal on a certified pre-owned vehicle that you can purchase in a relaxed environment, free of high-pressure sales? You won’t want to miss our summer 2020 Enterprise Car Sale, where you’ll find a hand-selected collection of low-mileage cars, trucks, vans and SUVs in a wide variety of models. Visit one of our four designated Enterprise Car Sale locations from August 28-September 26, 2020, and when you finance your new vehicle with The Police Credit Union, you’ll receive a 1.25 % APR discount!*

Our auto loans for pre-owned vehicles are just as competitive as our new vehicle loans. In addition, they feature 90 days of no payments, flexible repayment terms and convenient payment options. Find details and restrictions here.

*APR = Annual Percentage Rate. Example rate of 1.64% APR with 36 monthly payments = $28.49 per $1,000 borrowed, assumes .25% discount for enrollment in automatic payments, a 1.00% off current The Police Credit Union rate with a max loan term of 60 months, and .25% discount for The Police CU members who purchase a vehicle at Enterprise Car Sales location on August 28-September 6, 2020 (fully indexed rate of 3.14%). APR is based on evaluation of credit history, so your rate may differ. Rates, fees and terms are subject to change at any time, visit our website for current rates at www.thepolicecu.org.

Used vehicles were previously part of the Enterprise rental fleet &/or an affiliated company’s lease fleet or purchased by Enterprise from sources including auto auctions, customer trade-ins or from other sources, with a possible previous use including rental, lease, transportation network company or other use. All vehicle inventory is available by visiting enterprisecarsales.com or a dealership where a Sales Consultant can help you find vehicles available in our nationwide inventory. Delivery of vehicles outside local area may require transfer fee.

2$50 gift card will be emailed or mailed to The Police Credit Union members who finance a vehicle with The Police Credit Union through Enterprise Car Sales on August 28-September 6, 2020.

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APR = "Annual Percentage Rate". Actual APR is based on your credit profile and may be higher than the lowest rate available. Posted rates may include promotional discounts and other terms and conditions. APY = "Annual Percentage Yield". Rates are subject to change without notice.

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