How to Get a Used Car Bargain

When you go car shopping, the first question you are likely to run into is this: Should you buy a new or a used car?New cars are a shock to your budget, but they will probably be trouble-free for several years.Used cars cost less, but how can you be certain you're not buying someone else's problems?Here at Edmunds, we spend much of our time dispensing advice on new car buying. But there is a huge used car market.
In 2006, for example, an estimated 44 million used cars will be sold as compared to an estimated 17 million new cars. While the average sale price of a used car is estimated at about $13,900, the average price of a new car is estimated at roughly $27,800.It's often said that there is a steep decline in the car's value in just the first year of the car's life — from 20 to 30 percent. In other words, that car that was worth $21,800 when it was new can be purchased only a year later for as little as $15,260.
That's a savings between $4,360 and $6,540. This is proof that the consumer pays dearly for that new car smell.You might be thinking that all of this sounds good in theory. But what's happening in the real world? Well, we decided to find out.A Test CaseEdmunds editors Phil Reed and John DiPietro decided they would be guinea pigs in the used car buying process. Phil actually needed a car to replace the one he just sold. So he decided to get the best car he could for between $11,000 and $13,000.True, there are new cars that could be purchased in this price range. But by buying used, Phil felt he could get "more" car for less money. By purchasing a used car, he would be able to get a loaded mid-size model instead of a new, stripped "econobox." Besides that, buying a used car that was still under factory warranty could offset much of the uncertainty of buying a used car.