Buying a car may seem like an exercise in decision making. “Should I get a coupe or a crossover? An EV or hybrid? Magnetic Gray or Firecracker Red? Do I need heated seats? Oh, I definitely need heated seats.” Well one of the first—and possibly most important—decisions you’ll have to make is whether you should buy new, or used.
The factors to consider may seem overwhelming, but it really just comes down to your own personal priorities and preferences. If affordability is your top priority, then buying a used (pre-owned) car may be the way to go. Considering that the vehicle has already incurred the largest drop in value over its first few years, it will likely be priced to please. Not to mention, insurance premiums on used cars are generally lower. Another score for your wallet.
Looking at used cars? Check out how much you know by taking our buyer’s quiz.
|1||Do used cars still have the factory warranty?||A. Yes.
C. It depends.
|2||What do you call the price that the dealer supposedly paid for the car?||A. The Dealer Invoice Price
B. The Factory Invoice Price
|3||If I buy a used car and the car has been in an accident, the dealer must tell me that prior to the sale.||TRUE or FALSE|
|4||After you select your vehicle, you should always:||A. Inspect and test-drive the car.
B. Ask and confirm if the dealer/seller owns the vehicle and if any reported liens are satisfied by reviewing a copy of the title.
C. Obtain a vehicle history report.
D. A, B & C
E. A & C
|5||________ provides a detailed report of a vehicle’s history.||A. TrueCar
C. The dealership
|6||Tower uses NADA to determine the vehicle clean retail value. NADA stands for:||A. North American Data Attorneys
B. National Automobile Dealers Association
C. National Appraisals Determination for Autos
D. Nissan Automotive Damage Assessment
|7||Every car made has a unique number to identify it. What is that number called?||A. Serial Number
B. Plate Number
C. Registration Number
|8||At a dealership, you ask to see a specific car that you saw advertised at a great price. But the salesman says that car has already been sold. He points out another model on the lot. Soon you find yourself seriously considering this car instead. You have just been a victim of what sales tactic?||A. The Swap Con
B. The Flim-Flam Swindle
C. Bait and Switch
D. Flip Switch
|9||These are designed to provide options for people who’ve bought cars that don’t meet quality and performance standards.||A. NADA guides
B. Federal Motor Vehicle Safety Standards (FMVSS)
C. ECE Regulations
D. Lemon laws
|10||What is a Salvage-Title vehicle?||A. A car with obvious flood damage
B. A car/truck that was received in the U.S. via a ship cargo
C. A car rescued from police inventory.
D. A vehicle has been damaged and is considered a total loss by an insurance company.
1. C. It depends. In nearly every case, automotive warranties are based on the vehicle identification number (VIN), and the new car warranty will be valid for the full term regardless of ownership. So if you buy a used car, it may still be valid. But when the car you want is being sold “as is,” a dealer warranty is not an option. If you are someone who likes to avoid surprises related to unexpected auto repair costs, then an extended warranty is probably a good choice.
2. B. The factory invoice is the total cost to the dealer for a vehicle. This price is the sum of the base invoice or cost for the base model of the car, plus the cost of options, destination fees and manufacturer fees. The dealer invoice is the price the manufacturer bills the dealer for the vehicles they purchase, plus any options equipped.
3. FALSE. When it comes to accidents, it’s a “don’t ask, don’t tell” policy. If you buy a used car and never ask the dealer about the history of the vehicle, he is not required to tell you. However, if you ask if the car has been in an accident, the dealer is now liable if he gives you wrong information. (Source: LemonLaw.com) This is very important to know and is another reason why you should use Carfax to research a VIN prior to purchase of a used car.
4. D (A, B & C) A.) Always Inspect and test-drive the car. B.) Ask and confirm if the dealer/seller owns the vehicle and if any reported liens are satisfied- by reviewing a copy of the title. C.) You will also want to know all about the history of the vehicle, therefore it’s important to obtain a vehicle history report.
5. D. Carfax. Start your search with Carfax Used Car Listings. Avoid buying a car with costly hidden problems by getting a Carfax vehicle history report. It gleans data from insurance companies, DMVs, and even the police to tell you about a car’s background. Tower offers free Carfax reports to our members.
6. B. NADA is the National Association of Automobile Dealers. NADAguides.com is the largest publisher of the most market-reflective vehicle pricing and information available for automotive, classic cars, motorcycles, boats, RVs, and manufactured homes.
7. D. VIN. According to AutoCheck.com, a car’s vehicle identification number (VIN) is the identifying code for a SPECIFIC automobile. The VIN serves as the car’s fingerprint, as no two vehicles in operation have the same VIN. A car’s registration number is a sequence of letters and numbers assigned to a motor vehicle when it is registered, usually indicating the year and place of registration.
8. C. Bait & Switch. This scam is one of the oldest dealer advertising tricks in the book. It normally takes place during your initial contact with a car dealership on the Internet or over the phone.
9. D. Lemon laws don’t apply to every situation. In general, the problems with the vehicle must occur while the car is under warranty. It doesn’t have to be a new car warranty, however. It could be a more limited warranty that came with a used car.
10. D. According to Edmunds, a salvage title indicates that a car has suffered some kind of significant damage in the past. Cars that carry them can be inexpensive options if you’re a car shopper on a budget — provided you know what you are buying. It’s not a project for beginners or anyone who wants a 100 percent trouble-free car.
Resources: TrueCar, Inc., Edmunds.com Inc., Autotrader, Inc., CarsDirect, Auto Cheat Sheet, ARAG North America, Inc., AAA Club Alliance Inc.