Should you buy a new or used car? Many of us in Largo have debated the luxuries of owning a new vehicle versus the savings derived from buying a used car. There’s the new car smell, technologies such as Sync and a factory warranty as opposed to a used car providing more for your money and fairly new technologies.
The great recession of 2008 has converted many car shoppers into savvy, financially-sound buyers. In fact, last year more than 40 million used vehicles were sold compared to 14.5 million new vehicles. Buyers flocked to previously-owned vehicles, but were these vehicles properly maintained? Did the previous owner change the car’s oil every 3,000 miles and heed the service engine light or did they keep on trucking because they weren’t going to own the vehicle for more than a couple of years?
Is that bumper-to-bumper manufacturer’s warranty going to cover you in a pinch? What happens when the standard new-car warranty runs out (typically 3 years/36,000 miles)? If you’ve purchased a vehicle since 2008, here are some things to consider:
- Is your car or truck reliable? Check J.D. Power & Associates or Kelly Blue Book for vehicle dependability ratings. Knowing the number of recalls and glitches a vehicle model has had will allow you to assess potential problems you might face down the road.
- Know what’s already covered. New or certified pre-owned vehicles are often covered by a factory warranty. Factory warranties range in years and miles, so you should look at the manufacturer’s website to see what is covered by the factory. Does the manufacturer’s warranty cover the entire vehicle or only the engine and drivetrain? If you’re planning on keeping the vehicle beyond the time covered by your warranty – read on.
- Is the warranty transferable? Many, but not all, factory warranties transfer to the next owner. The best way to find out is by checking the vehicle identification number at a franchise dealer for coverage status.
- Save more by shopping for an extended service contract (more commonly known as an extended warranty). Buyers should beware that the car dealer may be charging you twice as much for that service contract, according to Edmunds.com. That extended coverage you purchase from the dealer might cost them $1,000, but they will charge you $2,000, so it’s a good idea to shop around before you buy. There are quite a few companies from which to choose, but make sure the company you buy from is reputable and has the financial stability to pay for the covered repairs. Insurance companies, such as Mercury Insurance, are often good choices because they are financially solid and have existing relationships with most auto repair facilities.
- What kind of coverage are you getting for your money? There are providers who offer 24-hour roadside assistance, rental vehicle assistance, nationwide protection and transferable coverage. In fact, Mercury’s Mechanical Breakdown Protection coverage includes all of the above, plus there is no limit to the number of claims you can make.
- Additional alternatives…keep your own repair fund. If you’re good at saving money for a rainy day disaster, then you might want to consider opening a repair fund. Save money in an account that accrues interest and allows you quick access. Be sure to have a reserve of at least $5,000, if not more, to pay for potential major repairs, because they can add up fast.