Used Car Market

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Buying used cars can be time consuming, stressful and occationally more costly than expected. These days cars are generally reliable, but it's still possible to make mistakes. Sometimes big mistakes. Traditionally, you have 3 choices - main dealer, independent dealer or risk a private sale.

Buying from a main dealer is a good option because you can be 99% sure of getting a good car. Main dealers have access to the best stock and they do careful checks to all the vehicles they sell. However, their overheads are high, so the price will always be higher. Independents can be very good - especially if they are well know in the community - but there are some real rogues out there. Be warned. They are also second in the queue in terms of getting the good cars. The cars they sell will mostly come from main dealers or auctions. Reputation is key with independent dealers.

A private sale will save you some money - especially if the person needs to sell quickly - but you must be very careful. Even the most ethical of people can get rather selfish when they are selling their used car! The best bet is to buy from someone you know and trust. At the very least you must HPI check the vehicle - this ensures the car has no finance outstanding, has not been registered as stolen or hasn't been recorded as being in an insurance claim. Never buy a car unless it is HPI clear unless you are an expert. Even if the car is okay physically, they are very difficult to sell when you are finished with them (so you loose money in the end). You can HPI your vehicle at the following websites (it's quick, easy and costs about £40): hpicheck.com, cardatachecks.com or theaauk.co.uk.

One advantage of using dealers is you can trade-in your old car. However, although the price they quote you might seem good, they are really buying your car at a trade price - ALWAYS. So if they offer you £2500 for your old car and the trade price is £2000, they are in fact giving you a £500 discount off the price of your new car. Selling your old car for a trade price is not really a good deal - much better to sell it privately if you have the time. The difference between a trade and a retail price will be between £500 to £2000 depending on the car.

So, every car has 4 prices: main dealer price, independent dealer price, private sale price and trade price. For people in the trade, the trade price is the only real price. They always buy at trade. They have to or they would never make any money. All other prices are mark-ups depending on the service being given. Buying at trade prices is very difficult unless you have contacts in the trade or you are brave enough to buy at auctions. Buying at auctions is brave, because that's where all the worst cars end up. If someone trades in a poor quality car to a dealer, they will always send it to the auction - they don't want to risk damaging their reputation by trying to sell it themselves. There are some good cars at auctions, but it's very much a specialist area in terms of buying. If you are determined to do it, go for cars that come direct from companies (company cars), hire companies (e.g. Avis), finance companies, motability or manufacturers (their own company cars).

eBay is a new option for buying a car. You will find all sorts - private sellers, small scale dealers, scrap dealers and even some main dealers clearing out trade-in stock. As with all auctions, small dealers and private sales, be very careful. There are decent people trying to sell their cars privately and small scale dealers who are trying to build a reputation, but there is everything else going on too. Look at the identity of the seller to see if they are genuine, make sure the car is HPI clear, inspect the car carefully before you pay and check the V5 document carefully. Make sure the story stacks up with the evidence - if in doubt, leave it. There are plenty of cars out there.

The good news is prices on eBay are generally very good - slightly lower than private sale prices in your local papers. So, if it all goes well, you could get a bargain. So here are my top tips for buying used cars:

  1. Main dealer - usually the best cars. Mostly trade-ins sold new by the company, so they know the history is good. Cars are carefully checked.
  2. Independent dealer - can be very good. Must have good repution in your community. Cars tend to come from main dealers (the ones they don't want) or from auctions. Try to find out where they get their cars from - they may tell you some fibs at this point!
  3. Private sale - can be very good. Some people sell their cars privately rather than trade them in, because they know they get a better deal. These can be very good buys - 1 owner cars with full service history. Always HPI the vehicle and check the car before payment. Take a careful look at the seller. Try to go for someone you know and trust if possible.
  4. eBay sale - can be a great buy. The price should be good, but be very careful. Always HPI the vehicle and check the car before payment. Look for sellers who are genuinely private - they have owned the car for at least a year - or are trying to deal in an honest way - check their feedback and identity. For older cars, go on condition. If the engine is not smoking and it drives without problems and strange noises, there's a good chance it will be a good buy. Watch out for clocking - excessive signs of wear on steering wheels, gear sticks, seats, pedals, etc.
  5. In general, go for cars with a clear ownership and service history, make sure the documentation is correct, and have the car checked by someone with mechanical knowledge. Remember you will have to sell the car yourself one day.
  6. Remember, good dealers know which are the good cars, know how to get them and therefore only sell good cars. They know that the secret to making money in the used car market is to have good cars to sell.
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