Buying Certified Pre-Owned Cars

A certified pre-owned car (CPO) is a car that has either been traded in or bought for resale. Automakers have dealers inspect and repair trade-ins prior to resale out of their own pocket, and then offer a warranty on the certified pre-owned cars. 

Pros

• Avoids high depreciation costs
• Car has already been inspected/fixed and comes with a warranty, giving you peace of mind
• CPO programs create vehicles with higher resale values, providing increased bargaining power when it's time to trade the car in. 
• Reduced-rate financing options are often available for CPO purchasers

Cons

• Just because the car is certified does not mean that it comes trouble-free. You should still have a mechanic inspect the car and take it back to the dealer for repair if any problems are found.
• Though you avoid new-car depreciation, you still have the traditional higher mileage and used-car damage that new-car buyers don't need to worry about.

Factory-backed programs

• Vehicle has been inspected, repaired, and backed by a factory warranty at no cost to you
• Sends representatives periodically to ensure inspection and repairs have been made.
• Auto manufacturers tack on anywhere from 2-8% of the original used-car price for the certification sticker. Typically, the higher-end the model or brand, the higher the percentage.

Dealer-certified programs

• Offer extended warranties at a cost; often require deductible payments and exclusions for any "normal wear and tear" repairs and owner abuse.
• Warranty may require you to to always return to the same dealer for service or repairs

General tips

• Whether you decide to go with a factory- or dealer-backed program, always be sure to thoroughly read the warranty agreement, including the fine print and age/mileage limits.
• Know the details of the return policy, from time frame to what refunds are covered.
• Ask to see the certification checklist to make sure all major components have been inspected. Be sure to look at the vehicle repair/maintenance history as well.
• Take the CPO for a thorough test drive.
• Always negotiate - you can still haggle the price down for any CPO.

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Fixing up vs Buying New

Some might say that the best way to save money on cars is to keep and care for the ol' clunker and drive it until the drops. However, after some point, this becomes untrue; the money you save from not buying a new car is being eaten up by the costs associated with keeping the old one on the road. Whether to fix up or buy new is up to you, but here are some points to help you make an informed decision.

For fixing up:

• Except for the most disastrous of damages, repairs are almost always cheaper than buying an entirely new car. You might be able to buy a used car for a few thousand dollars, but keep in mind that a used car comes with its own set of issues.
• Insurance premiums, registration fees, and personal-property taxes go up with new cars, and your financial situation might not be ideal.
• New cars depreciate drastically within its first couple years on the road. Your old car has already taken the hit.
• Everyone has a little sentimental attachment to their old cars. Perhaps it was your dream car, or your first car, or a gift from a beloved family member; your car can be like an old friend, associated with unforgettable memories of journeys long gone, and that can be something that is difficult to give up.

For buying a new car:

• You don't have to worry about future breakdowns, or at least not for a while. 
• Trips to the mechanic cost you not only a hefty sum of money, but it also eats away at time better spent on work, friends, and family.
• You're tired of your old car and ready for a change. Perhaps it looks like it's scratched and banged up like it's gone through a war, or it rattles like it's about to fall apart at the next trip to the store, or you have to bang on A/C to get it to work. 
• You want something safer, since new cars come the the most up-to-date safety features and equipment (side airbags, tire-pressure monitors, electronic stability control, and more). 
• A nicer looking car might could potentially boost your credibility in the eyes of your clients, for certain professions such as lawyers or salesmen.

Buying New vs. Used Cars

After reading the article "Am I Ready for a New Car" and finally coming to the decision to replace your current car, often the next question to ask yourself is this: should I buy a new car... or a used car?

Unfortunately, there is no one-size-fits-all answer; everything is subjective. However, here are several advantages of each that can help you with the decision-making process.

New cars:

• Peace of mind. New cars are less likely to break down and remain mechanically sound for many years after purchase. The new vehicle likely won't need new tires, a battery, exhaust system or brakes during the first few years of ownership or longer. Competitive warranties can help cover repair costs, and can range from 3-5 years or cover a certain number of kilometers. In addition to a comprehensive warranty, virtually all mainstream new cars come with free roadside assistance while the vehicle remains under warranty. Furthermore, if you encounter significant problems, state lemon laws allow you to replace your new car or get your money back, if you can prove that your car is a "lemon" (a defect). 
• Features. New cars often come with the latest, coolest features. For example, they are more likely have better safety features, be more fuel efficient, and emit fewer and less harmful chemicals into the environment. They can also be made to order and customized according to your individual needs. 
• Financing. Loans for new vehicles are easier to secure and come with cheaper rates, since its current value is absolute and its eventual value is easier to gauge (which means less guesswork involved for lenders). If you have good credit (720+), you may have fewer problems buying a new car with little or no down payment, and many manufacturers offer rebates, cash incentives, and discounted financing. 

Used cars:

• Increased choice. There are thousands of used cars available for purchase, ranging from newer models to collectable cars to well-maintained and serviced older cars. The key is in the research, most of which can be accomplished online. 
• Better prices. There are multiple reasons why used cars are cheaper than new ones. First of all is depreciation, since most cars lose up to 20% of its value the first time it is driven out of the dealer's parking lot, and up to 40% of its value within its first three years. Dealers also need to make a profit and pay for overheads such as premises and staff; used cars are often bought privately, which allows you to bypass the dealer mark-up. Furthermore, insurance rates are often lower for used cars. However, be sure to take ongoing motor costs into account when comparing prices, since replacement parts and maintenance can be costly.

Picture courtesy: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfkxZf4XMM8305hADJlC2RsVUZvSVvqNiK1-rg4R3Prd6lo86-Bnah-crfXEe0RUuBj-tkmgdD2-w3l23YwtBkkg203BiL4hBFPC0mBtLL-bdJRG7kiTjyDmGLJStDQ4ygTFuiSmCs-hE/s1600/old+and+new.jpg

Am I Ready For A New Car?

So your car is looking a little old and dingy. Then, you see someone drive by in a shiny new car. The shiny paint and clean lines scream: “You Gotta Get a New Car!” Before you sign the dotted line, keep a few things in mind.

• Do I have the money for a new car?: Unfortunately, cars are not free. We all have to make sure we have sufficient funds for our payments.
• What is my trade-in value for my current car?: This could help defray the costs and take some money off your final bill.
• How is my credit?: Having bad credit doesn't make it impossible to purchase a car, but it can make it a little harder. Often, you will need more money down on the car if your credit is bad.
• Do I really need a “New” car?: If you just got a new car a year ago, chances are, you can make do with what you have. However, if your current car does not suit your needs, it is important to find a vehicle that does.
• What are my priorities?: Does my current car provide enough safety, space, and fuel efficiency? Do I need a car with a back seat for when I have kids? Do I need a car with 4 wheel drive for when I go to Tahoe?

Purchasing a new car can be a fun and exciting process. Do your research and take a look at your finances. There are many factors that go into looking for a new car besides your color preference. Find the car that works the best with your wants, needs, and budget. It can really help to talk to a salesperson to find the vehicle that works the best for you.