Used Cars in 2024: What You Should Know before You Buy

Used vehicles can still save you money on your next purchase, but how you find them and close a deal may be different than last time.

Like the rest of the automotive industry, the used-car market has seen its fair share of turmoil over the past few years. While local dealers and small independent lots are still a common sight across most of North America, there’s been a trend, headlined by Carvana, toward online retailing for used vehicles. The Arizona-based e-commerce outfit originally launched with physical locations featuring multistory car vending machines—a gimmick that worked, drawing attention to the company’s no-haggle approach, which resonated with buyers who were sick of the dealership runaround. Carvana then launched a home-delivery model, which has been replicated by rivals such as CarMax and Vroom.

If the idea of buying a car sight unseen rattles you, you aren’t alone. But these services offer test-drive periods, and you can return the car within that window if you aren’t satisfied. We’d also suggest a trip to a trusted mechanic for an inspection—the same suggestion we’d make for any purchase of a used car, even one bought from a local dealer with a good reputation.

Are Used Car Prices Dropping?

While online shopping has made it easier to access inventory from across the country, that inventory isn’t as plentiful as it was a few years ago. That has driven up used-car prices, and the days of finding a well-kept gem with low miles and an under-budget price seem to be behind us. While prices are at least stabilizing—some reports even suggest they’re beginning to fall—the used-car market is still a precarious place for shoppers, and we suspect it will continue to be for a few more years.

To protect yourself, take extra care to buy the right car. Consider a Certified Pre-Owned model or leave room in the budget for an extended warranty. Look at the prices of similar cars being sold elsewhere. If you see significantly higher or lower prices on equivalent vehicles, you should probably investigate further before sealing the deal.

Why Go CPO?

A Certified Pre-Owned (CPO) vehicle is a used vehicle that is certified to be in top condition by the manufacturer, which will stand behind it with a factory warranty. If you think that seems like the makings of a good deal, you’re right. There are many advantages to purchasing a CPO car, SUV, truck, or van—and very few downsides. CPO vehicles generally cost less than brand-new ones but come with similar benefits and buyer protection. That peace of mind coupled with tangible savings is hard to argue with.

However, CPO programs also specify that you follow the manufacturer’s maintenance schedule. Failure to do so could void your warranty. You might need to have routine maintenance work performed at a franchised dealer, just as you would with a new vehicle covered under the standard new-car warranty.

CPO cars generally cost more than similar non-CPO models, and there’s no hard-and-fast rule as to how much more. The difference is usually notable. An alternative to buying a CPO car would be to look at a non-CPO used car and have an independent mechanic perform a similar inspection to ensure there are no issues before you write a check.

Lease Buyouts: Shrewd Thinking or Foolish Logic?

If you asked us in 2019 whether a lease buyout was a good idea, the answer would have been an easy no. With new-car prices low and incentives high, it wasn’t always logical to make lease payments for three years, then turn around and finance the remaining residual value of a leased vehicle—especially not when you could potentially buy a new version of that same car off a dealer lot for not much more money.

These days, because of shifts in the used-car market, lease buyouts sometimes make more sense. And it’s easy to see when they do. To start, dig out your original lease contract. When you signed that paperwork all of those months ago, you and the leasing entity agreed on the buyout price of the vehicle. It’s right there in writing. Next, look at car-listing websites for similar vehicles with around the same mileage and options. Are they retailing for more than that or less? How much less? A lot? If so, pass.

If prices seem higher than the buyout value, it might make financial sense to buy out the lease—even if your next move is only to sell the vehicle for a tidy profit.

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