Question: Is it worth the extra money to purchase a certified used vehicle from a car dealership?
April 06, 2008
Hi Tony,
I think you have a great we site! We will definitely use your information to make sure we get the best deal possible when we purchase our next vehicle.
The question I have is this: Is it worth the extra money to purchase a certified used vehicle from a dealership?
We are looking to purchase a 2007 low mile (still under factory warranty) Toyota Sienna and we have several options. The first option is we could purchase from a big dealership and pay a premium for the certification. Second, we could purchase from a small local dealership who would buy what we want at an auction and turn it around to us for a quick no hassle sale.
The third option is to use a friend of a friend car broker and do something similar to option two. We plan on selling our current mini-van on our own and securing our own financing.
Also, what is a fair markup from wholesale for a quick turn around sale? We were told by option two that based on current auction prices our cost would fall between 20K and 21K and KBB and NADA has the trade in value around $18,300 to $19,800 depending on condition.
Thanks again for providing such a valuable public service!
Paul
Answer:
Hi Paul,
I really appreciate your kind comments about my website.
The one and only advantage of buying a certified used car is the fact that the warranty is extended on it. Yes, they do an extensive check list evaluation, but most car dealers do that on their used cars anyway. Essentially you are paying extra for a certified car due to the added expense to the dealer for the warranty.
Your second option that you mention is fine as long as you know what you're getting. If you get a car in this fashion make sure it has some factory warranty left on it just in case something comes up.
The same with the third option.
As for the fair markup you ask about - first of all forget about KBB and NADA trade-in values. The prices in these guides rarely reflect the real world wholesale value of a used car. Whoever you get to buy your car, just offer them a set amount over their cost. How much that amount should be is for you and him to negotiate. Every dealer has a different idea of what is fair to them. It could be $300 or it could be $3,000! You'll have to work that out.
All my very best...
Tony Iorio
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