Those zero-percent financing deals were quite a hit. Tons of car shoppers traded in 1- or 2-year-old used cars so they could buy new ones interest-free.
And now car lots are teeming with late-model used cars. It’s a great time to be shopping for a used car bargain.
Used but not abused
“Whenever you have a high number of new car purchases, you’re going to have a relatively high volume of used cars coming to market,” says Paul Taylor, chief economist at the National Automobile Dealers Association.
“It may put a 1- or 2-year-old Cadillac or Lexus or Lincoln in the market that may not have been there.”
Lots of them, in fact. October turned into quite a month for the auto industry. By mid-month, overall sales were already 12 percent higher than a year ago, according to CNW Marketing/Research in Bandon, Ore.
Sales figures from manufacturers pushing zero-percent financing were even higher.
“During the first week of October some GM dealers were up 50 to 60 percent from a year ago,” says Art Spinella, vice president of CNW Marketing/Research.
Some analysts expect October sales to top 1.5 million. And since almost 85 percent of new-car buyers are replacement buyers, many will be trading in old cars for new ones.
The result? Dealer lots are overflowing with used cars.
Used-car deals waiting to be had
Widespread interest-free offers made October a great month for new-car shoppers everywhere. November may be the month for used-car shoppers.
Cars coming off two- and three-year leases have been flooding the market for much of the year. And now a new wave of used cars, trade-ins from zero-percent shoppers, has arrived as well.
Needless to say, there’s quite a selection of used cars to choose from. It’s also a great time to bargain on price and financing.
In an effort to clear cars, some dealers are extending discount financing offers to late-model used vehicles.
These dealers are using their own cash to “buy down” interest rates on used cars in order to sell them.
“It would be a way to help clear the supply,” Taylor says. “It’s a business decision. You either take the car to auction to clear it or you can sell it retail.”
Be sure to shop around for used-car financing before hitting a dealer’s lot. This search engine from Bankrate.com will help you
compare rates in your area.
Credit unions, in particular, offer some excellent rates on used cars. By shopping ahead, you’ll learn what kind of financing deals you qualify for. The dealer won’t be able to talk you into signing on for a loan with a higher interest rate than you deserve. And he may knock down his own rate to earn your business.
Shopping online saves time
Don’t forget to do plenty of research on the vehicle itself. The more you know about the car you want, the better off you’ll be. So hop online.
Edmund’s Automobile Buyers Guide,
Kelley Blue Book and
CarPrice.com are among the sites offering timely pricing information as well as shopping and negotiating tips.
Consumer Reports’ Web site includes a listing of used cars that have performed well in its reliability studies.
Because the sites let you search for cars by make and model, price and location, it’s easy to do a quick and thorough search of cars in your area. And it will save you lots of time. Why visit every auto lot in your area when you can check out the inventory online?
Because no two used cars are alike, you’ll need to do some serious tire kicking once you find a model you like. Taking a car for a test drive may not be enough.
best way to find out how a vehicle was treated in the past and how it will run in the future is to take it to a mechanic whom you know and trust.
You might also want to consider choosing a used car that has been certified by its manufacturer. These cars have been subjected to extensive inspections and reconditioning aimed at bringing them up to new car standards.
All of the major automakers have these programs.
Intellichoice ranks the certification programs of 30 automotive manufacturers on its Web site.
Typically, a manufacturer’s certification ups the price of a used car by $1,500 to $2,000. Many experts feel that a car that has been certified by a manufacturer is worth the extra cash.