Used Cars On-Line’s Blog

As part of the government’s attempts to stimulate the economy, a new program called “Cash for Clunkers” by some has been started.  The idea, originally used in Europe is that older gas inefficient cars will be taken off the road (forever!) and car makers will have the purchase of their new cars increased.   Although the impact for used car makers and people in the market for new cars is clear, I think it’s interesting to think about what it means for the used car market as a whole.

First, let’s look at some of the finer print.

1) The car you are buying cannot be over $45,000.  Based on the motivation of the program I’m not sure why this limit is here, but it’s presumably so the rich do not benefit from this program.

2) Your car cannot be over 25 years old.  Presumably this is so people don’t pull their old fixer upper out of the lawn to take advantage.

3) Your car must get less then 18 mpg combined.  This means the trade-in program will primarily take in trucks and SUVs.

Looking at this list, I think the current impact on the used car market is that SUVs between 1990-2002 will increase in value near and long term.  First, because their value is artificially increased by the government voucher program currently (and speculation on low long such a program might continue).  Further, these cars, when traded in have to be scrapped, meaning they will disappear from the earth forever.  It’s entirely possible at some point in the future, the late 90s Explorers that were so ubiquitous will indeed be rare, as no such program has been introduced previously.  This quite common cars could become collectors items.

The other major impact is that the value of “new” used cars should fall.  Many people don’t want to buy brand new cars, but instead but Certified Pre-Owners cars that are only a year or two old.  Usually the difference between these and brand new cars is about $3-4k.  Given the voucher program does not apply to these, presumably most people in the market for such a car would instead buy new.  Dealers often make more money from these used cars, but also often sell new cars, where the inventory is costly, so it’s unclear what impact this will have for your local dealer economy.

It should be interesting to see how long this government subsidy lasts, but I suggest you pick up an older SUV now while you can… Used Cars On-Line of course has tens of thousands of them…

When it comes time to buy a used car, there are essentially two types of shoppers; those who buy exclusively from dealers, and those who only want a car for sale by owner.  Each person thinks the other type of shopper is crazy.   Who is right?  Can either option be valuable in your search for a used car?

Private Party/For Sale By Owner

Pros: The biggest pro with private party sales is the price.  Not only are private owner’s price ranges more negotiable (they often have no bottom line and are anxious to get rid of a car), they also know they have to sell it for less as they are presumably providing less “value”.

The next biggest pro is that you get to meet the person who has been driving and caring for the car most recently.  This may not seem like that big of a deal initially, but surely a 17 year old with a lead foot and a 58 year old who changed the oil every 2500 miles are completely different types of drivers.  You can question them about why they are selling the car, etc.. which can often bring up problems before you buy.

Cons: There is no guarantee behind a private party sale.  In most states private party sales are “as-is” and the previous owner does not have to give full disclosure about the car.  So even if they know the transmission is about to go, they are often not legally required to tell you this and caveat emptor applies.

Dealers
Pros: The biggest pro behind a dealer sale is that there is usually some time of warranty available.   Dealers also often run Carfax reports for you and have their own mechanics to fix cars.  Dealers are experienced car buyers who get most of their inventory either from trade-ins or auction.  Having years of car buying experience, they are able to find cars in prime condition that they know are in good condition and will sell well.

Cons: The two biggest cons are tied, the price you will pay for a car from a dealer is almost always higher then that of a private owner.  You also have less room for negotiation and it’s often uncomfortable for people to negotiate with dealers who do this for a living.

So which path do you choose?  At Used Cars On-Line we used to only list cars for sale by owner, but recently we have started showing ads from dealers as well.  Why this change?  We believe that the best bet for car buyers is to shop both private party and dealer vehicles.   First, find a car you want, a price range you can afford, and from there worry about the pros or cons of a particular deal.

I was talking to a friend the other day, and he asked me about the mileage of my car, remarking it was in great condition.

“Hmm.. I think around 145,000 now.”, I replied.

“Seriously??!!  I had to replace my last car at 80,000 miles!”

This shocked me.  I’ve never had to “replace a car” ever.   Typically one only needs to replace a car if the cost of fixing the problem costs more then the car is worth, or so many problems are popping up (say once or twice a month) to render the car completely unreliable.  My last car I sold with 200,000 miles, and it’s still running great for the new owner.  What’s the secret?

1) Keep excellent maintenance records – It’s hard to remember in your head if you are due for a belt change, or an oil change.  Especially if you travel a lot, the mileage can really fly by.  Used Cars On-Line offers a free online service for tracking your maintenance records. It estimates your current mileage, and emails reminders for changing the oil.

2) Change the oil regularly yourself – Ok, not everyone can do this depending on where you live, but changing your oil yourself (or having someone you know do it) ensures you know exactly what is going into your car.  Quicky oil places use the cheapest oil possible, and don’t necessarily use what your manufacturer recommends.  Check your manual, buy some ramps, and not only will you save money, you will also get a sense of satisfaction performing this relatively simply auto work.

3) Preventively replace belts and fluids – Waiting until a belt snaps to replace it is not only bad for your car, it can also leave you stranded on the side of the road at the wrong time.  Especially cars with interference engines, changing the timing belt could mean the difference between a destroyed engine.  If my manufacturer recommends changing a belt at 90,000 miles, I do it at 75,000.  The extra cost of doing it more reguarly is worth the peace of mind.

4) Find a mechanic you trust – We’ve all had the experience of taking a car to the mechanic for one thing, only to have three other things breaking after we get it back.  If you are new to an area, don’t take the first opinion on car work.  When I was having trouble with my shifting, I took it to a car dealership who said I needed a new clutch and about $1200 of work.  If you ever get a quote for over $500, it’s worth shopping around.  I did, and it ended up not needing a new clutch, and another mechanic fixed the real problem for $1000 less.  If a mechanic is trying to talk you OUT of getting work done, he is a keeper.  If possible find a specialist. Someone that works entirely on Honda’s or Jaguars will know all the little problems much better.

5) Buy a car with a good reputation -  With some cars, it doesn’t matter how well you maintain them, they just come with baggage from poor parts decisions at the factory.  Before buying a car, I always read user’s comments on Edmunds, CarGurus, and e-opinions.  If you see most people complaining about small cup holders and the air conditioning not blowing cold enough, it’s probably a good car.  You’ll know a trouble car when people are talking about getting the transmission replaced 3 times, and power windows breaking constantly.

Perhaps this is your first time visited Used Cars On-Line, or perhaps you have been visiting regurarly for the past ten years. You may wonder what is going on here?

Used Cars On-Line is one of the oldest (if not the oldest) places to buy and sell used cars on the Internet. Recently we have decided to make some drastic changes to our service in order to better service our customers.

The first big change is this blog right here. Transparency in organizations is important these days, and we want to be no different. We’ll provide tips on how to buy and sell used cars here, in addition to changes we are working on and taking your suggestions on how to improve the site.

The next big change is that all ads are now FREE, including one photo. The ads will change even more in the coming month, but we’ll save all the details for now. In the meantime, enjoy the free ads! Sure, you may already have an ad somewhere else, but more publicity has never hurt anyone.

Next, we have taken a revolutionary step in the online classifieds world by adding “Scam protection” to our ads. One of the number one complaints we were receiving was about scam artists contacting our customers. Now Used Cars On-Line uses a variety of methods to prevent scamsters from contacting you at all, and flagging the ones that do contact you as scam artists. We are still perfecting the system, but so far we have noticed a dramatic decline in scams.

Finally, you may notice there are no longer “2see.com” domains. 2see Technology, the company behind Used Cars On-Line feels it is better for brand recognition and our customers to keep one consistent domain on the site. Lot’s more news is coming, and some tips on how you can market your car, or find a car on the Internet. Stay tuned, and let us know what you think!