How to guide: getting a used car in Mesa, Az
Let’s say you’re a typical resident of lovely Mesa or surrounding Phoenix, and you’re in need of a ride. You don’t want to get a new car, because you’ve learned that new cars depreciate quickly and aren’t worth the cost. Therefore the other option is to buy something used. But there’s something tough about going that route. Consider the case when buying a new car: you can refer to websites such as Edmunds.com, Kelly’s Bluebook, and other sources of information which gather and collate prices issued by car dealers, manufacturers. New cars are easy, because they’ve just came hot off the press: identical in terms of condition, warranty, age (completely new!). As such, there’s not much wiggle room for the kind of car you’re going to get. The situation is completely unlike the case when you’re searching for a used car. But what happens when you’re trying to get a second-hand vehicle? The key problem is the “fog of information.”
What this means is simply that information is not available. And without that information, it becomes very difficult for a consumer to determine whether the price-tag on a used vehicle is justifiable by the market rates or exorbitantly priced. Consider a typical second-hand vehicle - you can see the mileage, and the year of the make. Beyond that, can you tell if repaired parts were factory original or cheap generics? Or how many times has the car been involved in an accident? Is that paint job going to look good for the next 5 years or just the following three months? Did it really pass the Mesa, Arizona emissions test or were the testers habitually paid off? The variability in buying this kind of product, which is a sizeable investment, is huge. This uncertainty is what I call the “fog of information” when buying a used vehicle. Worse still, the car dealer is the one who knows most about the car history. Such a situation is what I’d like to call “total asymmetric information distribution.” Basically, one side knows about all the nitty-gritty and the other knows nothing.
How can anyone walk out with a winning deal from a dealer? The way I see it, I think you can strongly stack the odds in your favor to minimize the “fog of information” or the “asymmetric information”. There are two things you will need to do:
1) First you should note 3 models of cars you’re interested in, and note the color, the mileage limits you’re willing to tolerate. The year of the make is important but we’ll tackle it in the procedure below.
2) Next you must invest time looking online at a used car site, and note down all the used cars on sale which fulfill the criteria you noted in 1.
3) Then fire up Excel, and start going through each listing, nothing down the price offered by the dealer. You will notice that for any car of a particular year has a very wide range of prices. But most importantly, this procedure will yield a “price range chart” for each vehicle.
At the dealer, use your knowledge of these price ranges to gauge whether there’s a scam going on. Once you’ve picked out a few contenders based on their qualities and your tolerance specifications from 1-3, go home, and do more investiation. At this point, you should have honed in one particular vehicles, and taking the time to note the VIN (vehicle identification number). We will need the number below.
4) At home, fire up carfax.com and do a vehicle search for each one you’re interested in, using the VIN . This will reveal any hidden history of the cars.
With this kind of information, you’ll be in a much better position to barter for the used car.