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Used Car Buying Guide: Gently driven cars offer a green way to get great value

By Emma Johnson, www.RetailMeNot.com, Source: MCT News Service

Used vehicles don't come with that weird, hard-to-describe new-car smell. Nor a guarantee that no one puked in the backseat or transported illicit substances in the trunk. But gently driven cars, trucks and minivans do come with a whole lot of perks, namely lower prices and the good feeling that you've made a better environmental decision. And in today's economy where unemployment is high _ and the chances of getting an auto loan are lower than in recent history _ it is no wonder that the National Automobile Dealers Association's most recent figures show that new car sales plummeted more than 12 percent between 2008 and 2010.

Edmunds senior consumer advice editor Philip Reed says a gently used car _ one that is between one and three years old _ is a great way for people to save money, as long as they take the time to educate themselves about the vehicle and process. "The old adage that buying a used car is buying someone else's troubles is just not the case today because cars have never been more reliable," Reed says. "For educated buyers, these vehicles are a great way to save money."

New cars lose about 20 percent of their value the moment they're driven off the lot and an additional 10 percent by the end of the first year. After two years, the vehicle's value has tanked by a total of 40 percent. Another perk is that cars and trucks less than three years old are usually still covered by the manufacturer's warranty _ which can result in huge savings if it's needed to cover a repair.

There is also the environmental perk of buying used. Although each generation of cars continues to improve in fuel efficiency, experts still recommend that the greenest vehicle is a used one. In fact, Toyota found in 2004 that 28 percent of the carbon dioxide emissions generated during a typical car's lifecycle occur during the vehicle's manufacture and transport to the dealer.

The environmental factor was one perk when Joe Bonner of New York City recently bought a 2006 Toyota Prius with just 40,000 miles on it. The other appeal was the huge price cut. His family's "new" car cost $15,000. That's less than half of a new model's price, which is between $30,000 and $35,000. "Our old car was a 1990 Volvo, so we could really only go up from there," Bonner says. "Our 'new' car was kept in impeccable condition and felt very modern comparatively. The decision to buy used versus new was a matter of cost, as well as our plans to park it on the street. A new car would probably have incurred the additional expense of a monthly parking space."

When it comes to used over new, there are three ways to buy:

From an individual

Pros: Can be a kinder and gentler experience, since you are dealing directly with another average Joe, not a professional.

Cons: No extra services (like financing or registration).

From a new-car dealership

Pros: One-stop shopping, which means you can skip a trip to a bank and the DMV, plus trade in your old car. Good selection. Many offer certified pre-owned vehicles, which saves the cost and hassle of an inspection and provides some guarantee.

Cons: A little more expensive than buying from a private party. You might find yourself contending with two or three expert salespeople, which can be intimidating.

Independent car lots

Pros: Can find some good deals if you're lucky.

Cons: Buyer beware. These businesses are less regulated than new-car dealerships and may not honor any warranty they sell you, Reed says. "Plus, the lineage of the vehicle is unknown," he says.

Here are a few tips for making the smartest used-car purchase:

1. Do your homework. "The biggest mistake people make when shopping for a used car is that they don't research prices," Reed says. "So they don't know whether a car they're interested in is a good deal or not." Check out online listings for similar cars to learn about your target purchase's rate.

2. Factor in mileage. On average, cars incur 12,000 miles each year. Anything above that dings the value. Edmunds' appraisal tool can help determine the damage.

3. Be willing to drive a little farther to find a quality used car because demand is high, says Web2Carz co-founder Alex Bravy. His site lists vehicles and offers insurance, reviews and warranties. "We recommend that online car shoppers increase the search distance to a 50-mile radius," Bravy says. "Not only are you more likely to find the car that you are interested in, but car dealers outside of major metropolitan areas are more likely to offer you a better deal."

4. "Avoid getting blinded by a great deal and buying a lemon," Bravy warns. Get that used-vehicle report and check it out on Carfax or AutoCheck.

     Emma Johnson lives in New York City, where she writes about the intersect of money and life for http://www.RetailMeNot.com _ the No. 1 coupon site in the world.
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