There is no doubt that the quality of new vehicles has vastly improved over the last decade. That is great news for pre-owned vehicle buyers as they can now purchase vehicles with lots of life left in them and enjoy the benefits of a depreciated price that makes them affordable.
Used cars and trucks in the market come from many sources including private individuals who trade in
their cars for new vehicles, company fleets, individual leases, rental car companies, and executive lease vehicles.
Off-lease purchases can be made through various channels including new and used vehicle dealerships, online websites like eBay or Zoomwarehouse, and directly by companies with lease vehicle fleets.
This provides consumers with multiple buying options. Some of the vehicles are low mileage and in great condition and may end up in a Certified Pre Owned (CPO) Program from a vehicle manufacturer. CPO vehicles have undergone a thorough evaluation by the dealership or an authorized repair facility and often over 100 components are inspected and/or reconditioned before they are sold. CPO vehicles usually include an extended service agreement and/or a roadside assistance program that covers the owner for specified repairs during that period.
Other vehicles with low mileage may still be covered under the original factory warranty so it’s important to check and see if subsequent buyers are eligible for the same protection coverage as the original owner. In many instances there is a nominal transfer fee to maintain the eligible coverage. It’s important to ask about and understand what repair coverage, if any, you have on the vehicle, and always get that information in writing from the authorized seller of the vehicle.
Company leased fleet vehicles utilized by employees are on a strict preventative maintenance and service program to minimize downtime. Fleet managers work closely with authorized repair facilities and establish service intervals that meet or exceed the manufacturer’s requirements. This is not only a sound business practice to avoid unnecessary repairs, but often brings a higher return to the company when they sell those cars and trucks at the end of their term. The buyer of these vehicles benefits by knowing there is a verifiable history for their purchased leased vehicle.
If the buyer is using one of the trusted online fleet vehicle purchase sites they are able to see detailed vehicle inspection pages with estimates of actual repair costs and notes about any minor blemishes or interior repairs needed. While this provides a good level of comfort some consumers want more assurances as to the quality of the vehicle. In those instances there are companies that provide independent inspections of vehicles and offer the prospective buyer a detailed analysis and report on the car. The services and fees vary by company but here are three offering inspections services.
I always encourage buyers to do their research, explore local vehicle pricing guides, and contact your insurance company to determine annual premiums for the vehicles you are considering purchasing.
To learn more about buying or financing a vehicle download our checklist here.
Our next installment discusses the features and benefits of having a service agreement on your vehicle purchase.
This post was contributed by Mark Dubis, Automotive Consultant and Writer for the auto industry and former owner of Arrow Motorcar one of the top independent leasing companies in South Florida.