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Intro

For the vast majority of people, owning a vehicle is an integral part of life. From work and vacations to trips to the local stores and beyond, a car is extremely important for most people. While there are some states and countries where the cars are more of an exception than a norm, for the most part, it is a borderline necessity. And the simple truth is that cars do not last forever. Even with routine maintenance, being more proactive in getting issues dealt with before they become real problems, etc., at some point, the car is going to bite the dust. Even if not permanently, there are many times where it will be disabled for an extended period of time, in which you will still need a way to transport yourself and others. In essence, cars are a way of life, and purchasing them is just a part of that. But knowing what you are getting yourself into with each of the different types (new, used, and CPO) is important, as it is a good idea to know what you are doing when you are purchasing what is most likely the second largest thing in your life. Let us take a look at the three types and break down who they are for, as it will help get a much better understanding of the path you wish to take.

New Cars

New cars are a popular choice for a lot of people because of a few different reasons. First of all, you know for a fact whether or not the vehicle has been taken care of. Since you are the first owner of it, and it is coming straight from a dealership. You know the condition, you know that there is nothing hidden from you, etc., and that brings about a lot of value. On top of this, you also get that “new car” smell and a generally perfect vehicle right from the start. All of this culminates in the same thing we experience when going to the store: generally speaking, we are going to choose the new items over those that are used or returns, simply because there is no way to know the true condition of those items. At the end of the day, the new cars are simply a safer bet. Now, there are some issues with new cars, as well, and that needs to be understood. At the end of the day, all cars go through a creation process, and things do happen. From faulty parts to random hiccups, every car is not going to be absolutely perfect, and that should be taken into consideration. That said, this is by far the most reliable type, simply because out of all three, it has the greatest chance of being flawless. And with long warranties given on the new cars, it makes this even more of an importance for someone who needs a car that is reliable and they do not need to worry about much happening over the short term. In the case that something does happen, usually the dealerships will offer loaner cars while waiting for yours to get repaired, so that is an added bonus as well. But when it all comes down to it, you are essentially paying for that peace of mind. And depending on your situation (both in terms of your car ownership and finances, along with things like knowledge of car repair and others), it may or may not make sense to make this move.

CPO Cars

CPO is a lot like new, but you are buying used. They come with a verified evaluation of the car to ensure it still meets strict standards, and also come with some sort of warranty, though it is worth noting that the time frame in which this lasts will vary from car to car. A lot of buyers do not know this but in most cases, you can also buy the vehicle without getting the warranty, in which case you are then buying a used car that has been reconditioned and evaluated by the dealership. In a lot of cases, this is just like buying new, in that you get a lot of peace of mind, but they can come with their own complications as well.

First off, it is just like any other used vehicle… you have no idea what has actually been done to it and how it has been treated over the past years it has been owned. It could have been raced, driven hard, not taken care of, etc., or it could be a pristine vehicle that was taken through every step to ensure it stayed in perfect condition inside and out. To make matters more tricky, the physical condition of the car does not tell you anything about its past. You can find the most perfect looking car in the world and find out after taking it home that it has essentially been trashed by its past owners. So while there is a great benefit in knowing that it was looked at, how much of an impact that will actually have on the end result varies. And if you go without the warranty, you are pretty much on your own if anything does happen to the vehicle. To a large degree, a lot of things that could happen would not be covered even if you did have the warranty, either, but you will have to look into this as there are usually a lot of different packages to choose from depending on just how much coverage you are wanting (if any). If you do happen to choose a warranty, it is nice to know that the cost of this can be rolled into the purchase price of the car, allowing the entire thing (including the warranty) to be financed, should you want to do so. Most dealerships will actually bring this up on their own, but it is a good piece of information to take with you just in case they do not. As for pricing, CPO cars will come somewhat close to their new counterparts in some cases, and in others can come with huge variations. This is really just going to depend on the car itself. An ideal situation if picking a CPO is to go for one that is about 3 years old, as most of the vehicle’s depreciation has already been taken out by its previous owner(s) and it is still new enough to have most of the latest and greatest features.

Used Cars

Here is where things start to get very tricky. Used car prices will be all over the map, and will be determined by their seller. Most will go with something around the blue book value, but that is not always a guarantee, and the actual condition of the vehicles will vary greatly. On top of this, it is very hard to know what a vehicle’s history was like, sort of like with CPO, but in this case you are really taking a large risk, as there is no recourse and most sellers are not going to give any warranty (instead selling the cars as is). You can snag some very good deals like this, but you could also be getting yourself into a major headache. To help reduce the chances of this happening, here are some tips.

Go Through a Dealership

This will definitely come at a premium, but if you are not able to evaluate a car yourself and do any minor (or maybe even major) fixes that may come up, this is a good bet. The dealership, as long as they are a large one and not a small neighborhood one, will usually have their mechanics take a look and fix anything that may be wrong. On top of this, for the most part, they are dependable sales people, so if you have any questions or concerns, most can be taken at their word. Of course, there are still some issues here and there even when taking this path, but this could be considered as a general step between used and CPO in terms of pricing and trust.

Have the Car Inspected

Use a third party inspector to look the car over before purchasing it. Anyone that really wants to get their car gone will be willing to allow this. The cost should be around $50 to $100, and it is well worth it considering how much you could otherwise spend by not doing it. Most mechanics are willing to give this a go, and you may even have a friend or relative that will do this cheaper or even for free. In any case, this is an important step, and is something that most buyers end up neglecting. It only takes one bad car to make you realize just how important this truly is and to never forget it again. After all, this is usually going to be a decently large purchase, and you want to be sure that you are snagging the right one.

Do a Full Test Drive

This is another area buyers seem to fail quite often in. do not just take it for a short drive down a slow road. Actually emulate your driving style and path. For example, take it on the highway. Test its braking ability, turning, etc. It is very easy to miss problems if you are not taking it through a full test drive, and that is another costly mistake. Or you could simply learn that you do not like how the vehicle handles and it just is not a good fit regardless. This is a car you will be driving, so you want to make sure it really matches up with you. If you do not feel comfortable in it and enjoy driving it, you are going to dread any trip taken, and that is more detrimental than helpful.

Cars


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