Used Cars Aren't What They Used to Be -- Praise Be
My old minivan may have been a beater, but it just wouldn't die.
This made it hard to run out and buy a pricey new car.
I would drive my 2000 Honda
(HMC) Odyssey, with pride, I told myself, while chuckling at the newer cars whizzing by. The other drivers can have their fancy rides and their big monthly payments. My clunker may have been showing signs of wear, but it was costing me zero dollars a month with nothing down.
After eight years of transporting three kids and a menagerie of pets, however, the interior of the old Honda was beginning to resemble a roving garbage barge. The outside had more than its share of pings and dings. A misaligned bumper didn't do much to enhance its increasingly ragged appearance.
The only thing missing was a bumper sticker saying "Don't Laugh ... It's Paid For."
Clearly, the time had come to upgrade. But I tried to refrain from keeping up with the Joneses -- and for good reason. My minivan, despite its many blemishes, and 110,000 miles, was debt- and payment-free. Leasing has never been an option for my family since we put too much mileage on our cars. My 2000 Honda was paid off long ago, and an $800 extended warranty I purchased when the car was new covered the only two repairs I needed during much of the car's lifespan.
This didn't stop me from longing for heated leather seats and factory installed XM Satellite
(XMSR) radio. It seems that Clear Channel
(CCU) , the media conglomerate, plays the same songs on almost every radio station it owns in my area. I changed stations so frequently that the black coating on the button I pushed was slowly wearing down to white.
I found my comforts -- and compromise -- in a 2005 Honda Odyssey that I drove off the lot of a Honda dealership last week. It's far more luxurious than my older car -- and cost about $13,000 less than a 2008 model. The dealer also offered us $1,000 more than what I thought I could get for my older car -- and spared me the hassle of trying to sell a vehicle with high mileage on my own.
Many used cars (or "preowned" -- the term dealers prefer) are not the mystery mobiles consumers often found on the lot 20 years ago. The widespread practice of automobile leasing has created a new tier of used cars -- two- and three-year-old cars coming off lease with relatively low mileage and upgraded features, such as a sun roof or navigation system.
We concluded that buying a new car would be impractical for both our budget and lifestyle. A car that was just off-lease appealed to us because of the heightened possibility that it had been properly maintained -- and the reality that we wouldn't feel quite as badly about the wear and tear meted out by our family as we would by plunking down even more cash for a 2008 model.
A friend spoke highly of her experience with buying a used car through eBay
(EBAY) Motors. The low prices and good-looking vehicles tempted us, but we weren't comfortable with shipping our car from an unknown dealer in a faraway state (my friend, luckily, found cars within a short distance of her home).
We then perused the preowned inventory available through the Web sites of several local dealers, including this one for Michael Piazza Honda in Langhorne, Pa. It gave us an opportunity to fully digest the many features, mileage and options. We also got a sense about price range -- and for how much room there would be for negotiating.
The site included free, instant access to each vehicles' Carfax report -- a national service that uses the vehicle identification number (VIN) to detect potentially serious past events affecting the car's condition, such as salvage or flooding. Carfax also includes the car's registration history, so you can learn whether it was leased or a former rental car (we read that rentals may not be as well maintained). We insisted on free Carfax reports as we shopped, instead of fronting the $30 -- a dealer who offers one has nothing to hide.
We ultimately decided on a "certified preowned Honda" -- which the company says applies to only well-maintained vehicles that it subjects to 150-point inspection. The car came with a 12-month, 12,000-mile warranty and an additional seven-year, 100,000-mile warranty that covers major repairs, such as the engine and transmission (the latter began from the car's original in-service date).
Perhaps we paid slightly more than if we purchased it from a no-name used car dealer, or from a private seller on the Internet. But peace of mind is always worth a few extra bucks. In fact, we brought the car for service to inquire about a vibration, and the dealer even picked up the tab for our rental.
I'll likely tire of our newer car when it too reaches 110,000 miles. By then, my children will be older and I won't be as dependent on a minivan. But I'll consider "certified preowned" for whatever grown-up wheels I'll ultimately choose.
Auto-loan rates (national averages)
—For more ways to save, spend, invest and borrow, visit MainStreet.com.