How to get a used car for a fair price? Why are they all overpriced?
I've been buying cars for me and my family for over 30 years, and I've never bought used. I've always bought new and driven them to 200,000 miles. I've tried many times to buy used, but when considering the shorter remaining lifetime of the used car, new was always a better deal even if a few dollars more.
Right now I need to replace my 1997 Grand Voyager minivan with 208,000 miles. Although I need a minivan, it's not my primary vehicle. I'd LOVE to save some money by buying a 1 year old lease return with about 15,000 miles. I've shopped around local dealers online, and nicely equipped Town & Country Touring models at 15,000 miles are all priced around $24k-$25k. But when I look at brand new ones, they're exactly the same price after the $5000+ factory incentives.
I called a couple used dealerships on the phone with a few questions:
Me: "Are your prices truly no haggle, or is there flexibility?"
Dealer: "They are truly no haggle."
Me: "Oh, well that's a problem then."
Dealer: "Why?"
Me: Well, you have a nice selection (about 5) Town & Country Touring vehicles that look like one-year lease returns with 15,000 miles. But your no haggle price is exactly the same as a new dealer's sticker after deducting factory incentives. So I'm trying to figure out why anyone would buy one used.
Dealer: Well, a new car is worth 20% less the minute you drive it off the lot, so you might as well buy after it's been depreciated.
Me: I've heard that before. So tell me why your used 2015 vehicle with 15,000 miles is worth 0% less than a new one. It seems like your depreciated car is selling for a new car price.
Dealer: I don't think you'll find any new 2015 cars out there.
Me: OK, there are LOTS of 2016 new models out there, and those are the ones I am considering, unless I can save sufficient money on a used one.
Dealer: Well, minivans are really depressed right now. Nobody wants them, so that's depressing the price of new ones.
Me: If the new cars prices are depressed, then the used ones must be also, otherwise you would not be able to sell them. Maybe that's why you have so many in stock.
Dealer: Why don't you come down and look at a few?
Me: There is no used car that I'm interested in looking at if I need to pay the same price as a new vehicle.
Dealer: Well, we offer our bumper-to-bumper warranty for 12 months or 12,000 miles.
Me: A new car has 36 months and 36,000 mile warranty.
Dealer: We offer really low interest rates.
Me: Interest rates are usually lower on new cars. Plus, I am prepared to pay cash to get the best deal.
yadayada....
I called a few different dealers and they all basically said the same thing.
So my question is: Before I give up yet again on buying a used car, what is it that I am missing here? Am I looking in the wrong places? Where can I find deals on a used car? If a new car is worth 20% less as soon as it leaves the lot, where can I find a low mileage car that reflects those savings? It sure seems to me like these "no haggle" dealerships are trying to pocket that 20% in the form of fatter margins.
My concern is that, just like with the 8 prior cars that I have bought, I am not even going to walk into a used car dealership because of this BS that they give me over prices.
Right now I need to replace my 1997 Grand Voyager minivan with 208,000 miles. Although I need a minivan, it's not my primary vehicle. I'd LOVE to save some money by buying a 1 year old lease return with about 15,000 miles. I've shopped around local dealers online, and nicely equipped Town & Country Touring models at 15,000 miles are all priced around $24k-$25k. But when I look at brand new ones, they're exactly the same price after the $5000+ factory incentives.
I called a couple used dealerships on the phone with a few questions:
Me: "Are your prices truly no haggle, or is there flexibility?"
Dealer: "They are truly no haggle."
Me: "Oh, well that's a problem then."
Dealer: "Why?"
Me: Well, you have a nice selection (about 5) Town & Country Touring vehicles that look like one-year lease returns with 15,000 miles. But your no haggle price is exactly the same as a new dealer's sticker after deducting factory incentives. So I'm trying to figure out why anyone would buy one used.
Dealer: Well, a new car is worth 20% less the minute you drive it off the lot, so you might as well buy after it's been depreciated.
Me: I've heard that before. So tell me why your used 2015 vehicle with 15,000 miles is worth 0% less than a new one. It seems like your depreciated car is selling for a new car price.
Dealer: I don't think you'll find any new 2015 cars out there.
Me: OK, there are LOTS of 2016 new models out there, and those are the ones I am considering, unless I can save sufficient money on a used one.
Dealer: Well, minivans are really depressed right now. Nobody wants them, so that's depressing the price of new ones.
Me: If the new cars prices are depressed, then the used ones must be also, otherwise you would not be able to sell them. Maybe that's why you have so many in stock.
Dealer: Why don't you come down and look at a few?
Me: There is no used car that I'm interested in looking at if I need to pay the same price as a new vehicle.
Dealer: Well, we offer our bumper-to-bumper warranty for 12 months or 12,000 miles.
Me: A new car has 36 months and 36,000 mile warranty.
Dealer: We offer really low interest rates.
Me: Interest rates are usually lower on new cars. Plus, I am prepared to pay cash to get the best deal.
yadayada....
I called a few different dealers and they all basically said the same thing.
So my question is: Before I give up yet again on buying a used car, what is it that I am missing here? Am I looking in the wrong places? Where can I find deals on a used car? If a new car is worth 20% less as soon as it leaves the lot, where can I find a low mileage car that reflects those savings? It sure seems to me like these "no haggle" dealerships are trying to pocket that 20% in the form of fatter margins.
My concern is that, just like with the 8 prior cars that I have bought, I am not even going to walk into a used car dealership because of this BS that they give me over prices.
0
Answers
Keep this in mind: BUYERS determine the price of used cars---not dealers, appraisers, private sellers, "blue" books, etc.
This gives you the idea that buying a late model used vehicle from CarMax is probably a very bad idea.
Now for a counterpoint to this – a friend of mine recently purchased a 2015 Buick Lacrosse, 10k miles, from CarMax for $24k. The new 2016 similarly equipped would have run about $40k, with TrueCar estimated selling price of $35k. So she saved $11k buying one year old with 10k miles, which to me makes perfect sense.
Which means there are some deals to be had on late model used cars, but you’re going to have to do your homework. And if the used market is overpriced (which it definitely sounds like that for your situation), then just buy new.