When my wife's aging Dodge Caravan developed a head gasket leak in mid-December, my dilemma over her Christmas gift ended. The minivan had over 220,000 miles and needed new tires and brakes. Just getting it roadworthy was going to cost the equivalent of a down payment on a replacement vehicle. So I started car shopping.
I needed a roomy, functional minivan (we have four young daughters) that would offer maximum peace of mind during my wife's long daily commute. What I didn't need was a new-car payment.
I knew that certified pre-owned vehicles offer an alluring combination of affordability (they are priced substantially below equivalent new models) and dependability (they are generally refurbished late-model, lower-mileage vehicles and come with manufacturer warranties). So, naturally, I started thinking CPO.
Shop around (but not too far).
Like most contemporary car buyers, I started my search online. But I soon learned that not every certified pre-owned vehicle listed online is actually available because well-priced CPOs tend to sell fast. Plus, not every available car at a given dealership is listed online. After a couple of fruitless trips to dealerships far from my home in Santa Clarita, I headed to Valencia Auto Center — Southern California’s largest auto mall with 23 brands (similar dealership clusters exist throughout Southern California).
Age isn't everything.
A vehicle's age and mileage aren't the only indicators of how much life is likely left in it. A Carfax report, offered free of charge by most reputable dealers, provides invaluable information about how an automobile has been maintained during its lifetime and any significant accidents and repairs. Any CPO should come with a clean Carfax report, but be sure to read between the lines. For example, I looked at a 2011 minivan with under 30,000 miles at a very seductive price, but was put off by its having changed hands at numerous auctions across multiple states for no apparent reason. I eventually chose a 2009 Toyota Sienna that, though it had 74,000 miles, originated from the dealership that was reselling it and had been maintained there throughout its life.
Everything is negotiable.
With only a “fair” credit score, the 60-month loan rates I was offered varied wildly from dealership to dealership (my research showed that the average rate was around 4.5%, but I was quoted as high as 9%). I got each offer in writing and showed the lowest to the next salesperson I encountered. Eventually, Frontier Toyota offered me 1.9% on the Sienna — but I wasn’t through haggling. I talked them down $500 on the sticker price and, having called around other Toyota dealers to establish going rates, a whopping $900 down on an extended service agreement (recommended if a CPO is nearing the end of its original manufacturer warranty), as well as negotiating an extra $400 for my trade-in.
With a $3,500 down payment (including the trade-in), my monthly payments came in below $285. And, yes, my family was thrilled when I revealed their shiny new ride on Christmas morning.