While automakers are scrambling to get buyers into showrooms to pick up shiny new models right now, used cars seem to be having no trouble finding homes. In fact, a report by Manheim Consulting says used car sales are up by almost 9 percent compared to the beginning of the year. That’s good news for dealers and sellers alike, but the figure is still down nearly 2 percent versus last year. Given that information, it’s no surprise that the report goes on to say dealers are beginning to make up the losses they’re experiencing the new car front with more used-car sales.
That also means the value of the used car in your driveway is climbing – probably not enough to retire on, but climbing none the less. The Manheim report says the gradual rise in wholesale prices of used cars, that is, prices paid by dealers at auction, was originally thought to be driven by the lack of new car sales the market saw toward the end of last year and the beginning of 2009. Now it appears the trend is separate from new car sales all together – especially good news if you’re looking to sell or trade in your current used car right now.
Its true higher values usually mean a steeper price tag when it comes time to buy your new-to-you car, but in this case, Manheim says a number of factors are combining to be beneficial for both buyers and sellers. For one, the growth of internet-based cars sales has helped dealers limit their inventory and reduce costs, allowing them to pass some of the savings along to buyers. At the same time, the ability to find a vehicle over the Web means consumers now have access to a greater selection of vehicles than ever before, meaning it’s easier to shop around for the best deal anywhere. Now that’s progress
Congress has been hard at work trying to sort out the details of a Cash for Clunkers type vehicle incentive program for months. The basic concept is this: you take your old, gas thirsty car or truck and turn it in at a dealership for a $4,500 voucher toward a new used car or truck of your choice – so long as that car or truck gets 30 mpg or better. Until now, most of the legislation making its way through the legislative branch has only had the vouchers applying toward the purchase of a new vehicle. That is until now.
A new counter proposal bill drawn up by four Senators from both sides of the aisle aims to change all that. Aside from upping the proposed legislation’s green credentials by increasing the mileage requirements for less fuel consumption and decreased emissions, it also makes leased cars and trucks and used vehicles eligible for the vouchers as well. Critics pointed out the House of Representatives bill seemed to be heavily influenced by lobbying from automakers, and the Senate’s version is a welcome solution to the raised eyebrows of used car dealers and consumers who couldn’t imagine taking on payments for a brand new car.
The Senate’s version of the bill was officially introduced on June 9, and some analysts believe it should pass by the end of the summer. If it does, getting into the used car or truck of your dreams could be that much easier very soon. Keep your eyes open for progress on the legislation.
f you’re searching for a used car, odds are you know how important a vehicle history report is to the buying process. A good history check can dig up ghosts from your prospective buy’s past like accident damage, flood damage and whether or not the odometer has been tampered with, but how do the other categories impact a vehicle? Carfax takes a look at everything from lemon complaints to service records to give you the best possible picture of the car’s past, and it turns out each category is just as important as the next. Hop the jump for a look at lemon checks, fleet service and rental car service.
Let’s start with the lemon check. Most states have lemon laws that protect car buyers from faulty products. If the original owner invoked those laws for whatever reason (usually repeated, inexplicable repairs) the history report will let you know, protecting you from picking up a car that could cause more headaches than it’s worth.
A Carfax report will also let you know if the car you hope to buy has ever been a rental or in a company fleet. It’s true these cars often receive meticulous maintenance – a strong selling-point for any vehicle – but as everyone knows, regular oil changes are only part of how a vehicle has been treated over its lifetime. Usually, fleet and rental vehicles suffer substantial abuse at the hands of their drivers. Those cars tend to be driven with less respect, suffering high-speeds, higher miles and abrupt braking among other liberties. We’re not saying everyone who has ever slid into the driver’s seat of a rental car has beaten the living life out of the vehicle, but it happens often enough to keep a wary eye on any car that comes back as having survived fleet service.
In the end, a vehicle history report is only part of the buying process. If your Carfax report shows a red flag in any important category, it shouldn’t be a deal-breaker. Rather, it simply lets you know the car you want to take home should be carefully inspected by a trusted, professional mechanic before you sign the title. If the car comes back with a good bill of health and you still aren’t sure, trust your gut and walk away. There are plenty of good cars out there.
For more information on getting a vehicle history report, you can check out the UsedCars.com vehicle history report page, or hop over to Carfax.
A slew of recent studies have all come up with the same conclusion: Americans are holding onto their cars longer than they ever have before. A report by automotive industry analysts R.L. Polk & Company says the average age of vehicles on our roads is a year older now than it was a decade ago. So how old is that? The study says the average age of all the cars and trucks registered at the end of 2008 was 9.4 years old. To top it off, the good people at R.L. Polk also looked at vehicle scrap rates, which have fallen from 9.5 percent in 1970 to just 5.1 percent last year.
So what does that mean to us? The Polk study seems to think people are holding onto their cars longer than ever because of the economic down turn alone. In fact, a spokesperson with the company directly links the amount of discretionary income available to a family with the age of their car. We’re not so sure that’s the case. Everywhere you turn, manufacturers boast the longevity of their cars. Just about every family has that one crazy uncle who owns a pick up with 300,000 miles on it, and any vehicle with around 100,000 miles is still considered to have plenty of life left in it. The truth is we don’t need to retire our cars every four years the way our parents did.
That also means there are plenty of used cars to be had with higher miles for much less than their low-mile counterparts. If you happen to come across a good buy with a few extra digits on the dash, just be sure to have every major mechanical system thoroughly checked before jumping in, and expect to replace common parts like starters, alternators and A/C components sooner than “younger” cars. As with any potential purchase, it pays to look at the odometer as a ticking clock, but these days that timer may just have a few more years on it than it used to.