Purchasing a used car can be a smart investment if you do it right. In fact, with the price of new cars on the rise, buying used is a common route for many these days. According to Cox Automotive’s 2019 car buyer study, two-thirds of customers favor buying a used car when shopping.
While buying used is a great way to save money, it also comes with several risks including future repairs, unaddressed recalls, and overall cleanliness. With the number of potential liabilities, how many Americans trust the process?
To uncover the truth, we polled 3,000 Americans to find out what scares people most about buying a used car. In our survey we found:
- 63% of Americans believe buying a used car is worth the risk.
- Americans’ biggest fear when buying used cars is future repairs.
- Unaddressed recalls and cleanliness are the least worrisome when buying used cars.
Turns out, most people are willing to take the risk. We drill down why this might be and things to keep an eye out for when you’re in the market for a used car.
Do Americans Think Buying a Used Car is Worth the Risk?
For some, buying a used car is not worth the hassle or potential liability. The car is “used” and by definition had a previous owner that did not want it for some reason. When respondents were asked whether they thought buying a used car was worth the risk, most agreed it was. In fact, almost 64% of Americans believe it is, compared to the cautious 36% who said no.
What Scares People Most About Buying a Used Car?
Despite the many who are willing to buy a used car regardless of the risks, we asked individuals what scared them most when purchasing a used car. The clear answer was the risk of future repairs—totaling over 27% of respondents. Smart car buyers know that purchasing used comes with hidden costs outside of price. According to Autotrader, there are several other variables that factor into the price of a used car including:
- State and local taxes
- State licensing fees
- Leasing charges
- Loan interest rate (if financed)
All of this does not include the cost of future repairs. According to an AAA survey, 1 in 3 U.S. drivers cannot afford an unexpected car bill, with repair bills averaging $600. It’s safe to say that future repairs are something to be nervous about when in the market for a used car. Along with the fear of future repairs needed, 19% of respondents were most scared of the seller not disclosing the car’s true history. This is a common problem among private sellers who choose to not disclose a car’s hidden problems to potential buyers. These problems can include anything from prior crashes to open recalls.
However, bonds for auto dealers are available to protect customers against car dealerships that are not following regulations. Car dealership statistics have shown that only 37% of auto dealers implement compliance training. Next time you are looking at auto dealers, make sure they have a bond in place that can protect you.
So, what does this tell us about the used car buying process? For dealers, it means customers are getting smarter about what to look for. For future buyers, it means that there are a lot more items to check off your list before pulling out a checkbook. While buying used seems like a great way to save money, there is a high probability you could be dealing with repairs or hidden costs further down the line.
This study was conducted by JW Surety Bonds using Google Consumer Surveys. The sample consisted of no less than 1,500 completed responses per question. Post-stratification weighting has been applied to ensure an accurate and reliable representation of the total population. This survey was conducted in February 2020.