Is it better to buy new or used?Buying a car is a complicated decision, so it’s always hard to answer the “new vs. used” question with a blanket statement. What I can say, and what is becoming more and more true, especially with certified pre-owned programs and extended warranties, is that buying a used car does not mean you sacrifice quality. Of course, newer cars have the latest and greatest features, and with low interest rates and the “zero money down” offers that currently exist, it costs less to finance than ever before. It comes down to whatever you are comfortable with and works best for your month-to-month finances.
How much research should you do before you buy?
Next to a home, a car is usually the second most-valuable asset that an individual owns. With unlimited information available for free online that enables consumers to comparison shop, research any issues with the specific model(s) they are interested in and even research local dealerships, there is no reason not to do your homework. Walking into the dealership with market prices and information from a number of sources can dramatically improve your bargaining position. A little bit of preparation can save a lot of headaches down the road.
What are some fine-print details every car buyer should be aware of?
The best advice is to read the fine print and take your time; the dealership isn’t going anywhere.
Name a few “red flags” to look out for when you’re car shopping.
First, anything that gives you the impression you’re being rushed or hurried to complete a purchase is a red flag. You should have as much time as you need to test drive the car and discuss with family or friends. Pressure from the sales staff is a sure sign something is amiss. Second, anything that is either said or indicated in writing that artificially restricts the vehicles you can select from. If a seller is hesitant to sell you a particular car, or seems to be pushing specific inventory on you, take a step back and reconsider the purchase.
How many miles are considered “too many” for a used car?
I’m not a mechanic, but fortunately even someone who is not an expert can look up information on specific vehicles. For example, if a model you are looking at starts having problems after 75,000 miles, and the used car you want has 80,000 miles, it might be better to pass on what otherwise is a good deal.
Is there an advantage of buying through a private seller (think craigslist) versus going to a dealership?
For myself, I would always purchase a car through a dealership. Between the inspections, warranty information, service options and the ability to address any concerns down the line, the peace of mind you get is worth any difference in price.
Dr. Sean Stein Smith, DBA, CPA, CGMA, CMA, CFE, is a financial analyst at Hackensack University Medical Center, one of the premier health care providers in the United States. Stein Smith is a member of the editorial advisory board for NJCPA Magazine. He has been featured in Accounting Today, Strategic Finance, IndustryWeek, AccountingWEB, the CPA Journal, NJCPA Magazine and other academic and practitioner publications.