96 S Waverly Rd Holland, MI 49423 Ph: 616-546-3000

Buy from a Large New Car Dealer or Small Car Lot?

It seems the mindset of the majority of used car shoppers is to buy a used vehicle from a large dealership that sells new and used vehicles.  Buying a used vehicle from anywhere is chock full perils and most people are looking to limit getting taken buying a bad vehicle.   Does buying at a large dealership really limit your exposure to buying a bad vehicle?   Used car salesman have bad reputation right from the start.  There can be bad salespeople at any size establishment.  Things that make it worse are lies, high pressure and the overall bad vibe from either the person or the vehicle.   I am going to point out several things that will give you more insight on how to avoid buying the wrong vehicle and maybe some things to think about on where to buy your next vehicle.
First I would like to point out that buying at a large dealer that sells new and used vehicles does not guarantee your deal will be hassle free nor does it guarantee that your car will be the right one for you or that it is mechanically sound. People think that at a big dealer that has a big service department that the used vehicle must be a good one.  It surely must have been inspected, fixed properly and fully ready to be put on the lot.   That is not always the case.  I worked at a dealership that when they bought or traded in a used vehicle they had a mechanic in the service department inspect the vehicle.  Normally these guys are not the same mechanics that are working on the new vehicles.  They do the inspection and come up with a list of things that the vehicle needs.  They hand that list to the used car manager who then decides which stuff they fix and which stuff they don't.   I can tell you from experience that there were vehicles on the lot that needed repairs and were done to keep the cost down.  It is easy to tell when a vehicle needs brakes or tires.  Most customers can tell by looking or driving.   Things that are less obvious or can't be seen or heard on a test drive are often left out of being handled. 
The next misconception is that all or most small used car dealerships are crooks or shady.   There definitely are a lot of bad ones out there so I can see how this one is easy to be in the front of your mind.  One thing that all dealers have in common is the fact that they want to make lots of profit and spend as little as possible.  Finding the right car is the most important thing that should be considered when looking for a vehicle.  Finding the right dealership is probably second.  Having a great dealership experience but buying the wrong car for too much money will still leave you in a very bad position in the end.  
Here are some things to remember and think about before buying your next used vehicle.
#1-In almost every Large dealership they have everyone get paid commission.  They need to keep profit margins high since several people are taking a piece of the action.  It is easy know understand that the salesperson takes a commission and maybe the used car sales manager but what most people don't understand it that other people are taking some of the profit. People like the Finance Manager, New Car Manager, General Manager, Owner, Office Manager and in some instances the Parts and Service Managers.
#2- smaller used car lots have less overhead and many don't have commissioned sales people.  They can have lower prices on the same used vehicles because they don't need all that extra profit for commissions and high building expenses.
#3 - Always have a vehicle inspected by someone you select.  Even if it is at a large dealership claiming their service dept already did a full inspection.  Remember it is not about what they did fix or maintain.  It is about what the vehicle still needs now(things they did not do) or things that it may need in the near future.  There is nothing wrong with taking it to have a second non biased opinion.  Any dealership that objects..........just walk away.
#4 If you have good/great credit you may want to avoid going to places that advertise Guaranteed Financing for Everyone.    I could write a whole blog this topic and why......Do yourself a favor and don't waste your time. There is not much good that will come out it for you.  Cars will be in disappointing condition and your experience will be less than desirable.
#5 - Avoid the dealers that need get your attention by crazy commercials, unrealistic deals advertised or junk mail that state " We need your trade.....Please bring in your 2005 PT Cruiser for Top Dollar" or even Test Drive for Free Gift - Win a Car!  I am surprised at how often people fall for this garbage.  No one ever has a key that fits the winning car.  They really don't need your old worn out trade.   You get the point.  NEVER FALL FOR THIS STUFF.....EVER
#6 - Read Google Reviews.  This no sure fire way to guarantee that you will get the right vehicle with a no hassle experience but it could save you time from going to a bad dealer.  You may see dealers that have lots of great reviews and a few bad ones.  What you want to look for is what the bad ones says.   It is easy for a dealership to encourage happy customers to write a quick review so that the bad ones get less noticed.  What is important to see what happened in the bad ones.  If several people write that their transmission or engine went out soon after they bought the vehicle then it should be concerning.  Clearly they do sell bad vehicles.  I have also seen lots of reviewers state that they were clearly mislead or the dealer never mentioned huge issues with the History Report.  Seeing lots of people complain about buying a vehicle with bad Accidents, Airbags Deployed, Salvage Title, Canadian or other major history report issues means they purposely buy these vehicles in order to maximize profits and take advantage of people. No matter how many good reviews that they may have does not make up for the fact they have and will sell bad vehicles to people when they can get away with it.  This is the perfect example of wrong car and wrong dealership.
#7 - Always look at the Carfax or at the very least Autocheck. Make sure the VIN on the report matches the VIN on the car.  Reading and fully understanding the history report way more involved than just seeing Owners and Accidents.  This will probably be another blog topic I will explain more in detail. Everyone likes One Owner No Accident Vehicles but in reality that does make it a better or nicer vehicle.  It is still important to look the car over and have it inspected.  Not everything shows up on the history report.  Unless the car is priced 40-50% off the Retail Value you will want to avoid: Salvage Title, Total Loss, Mileage Inconsistent Issue, Accidents involving Airbags Deployed, Vehicles that spent their life in Canada and Lemon Law Buyback.
#8 - Do some online research on the model you are considering.  It is easy to find certain years or models that have major mechanical defects that should be avoided.  
#9 - Avoid putting too much faith when different websites tell you a certain vehicles is a "Great Price" or "Good Deal"  Often they are missing options, have bad history reports, body damage, mechanical issues or even smell like smoke.  There is absolutely no way for a website to know what condition the car is in.  Since condition has a huge impact on value, how could they possibly know if something is a good deal or not.
Once you tackle some of these important tips you will get a general sense on what dealers not to waste your time with and which ones are worth a closer look.  You might be surprised to find a few small dealers that really can give you a Hassle Free Experience on a vehicle that has a great history report and is in above average condition both physically and mechanically............all at prices that beat the big guys hands down.

Websites giving pricing advice have flaws

Is it really a Good Deal or Overpriced?  Don't just blindly trust certain websites.

Who has seen websites like Cargurus.com, Kbb.com, Edmunds.com, Carfax and now Autotrader.com telling you that the price listed is a Great Deal, Good Deal or even Overpriced?  Really.....these sites personally went to all see and drive all of these vehicles?  They had them mechanically and physically inspected?  They know the true vehicle history for accidents, owners, location and maintenance? You already know the answer to those questions.   No they didn't

When shopping for a used vehicle there are lots of things to consider that make a huge impact on the Value/Price. Many websites now days try to tell you if you are getting a good/fair/bad deal. It is important to use these as guides but you really have to know they do come with some major flaws.  Almost everyday I have customers tell me how they went to look at a vehicle at another dealership that was rated as "Great Deal" only to go there and find out that is was no deal at all.  Some have seen vehicle with severe hail damage, some were not mechanically sound, some smelled like smoke and others were clearly in an accident or repainted/repaired poorly.  What looked good on paper was not a true representation of that actual vehicle.

No two used cars are worth the same amount of money. How can these sites tell you if the vehicle is a good deal or not when they only know less than 50% of the details. The condition of the vehicle is one of the most significant impacts on its value. It is even more important than miles and options. Would your rather buy a vehicle with 50,000 miles that is in below average condition, smells like smoke and is in need of mechanical repairs or a vehicle that has 85,000 miles and is in near perfect condition both physically and mechanically. If they both have the same price, these website will tell you the one with the lower miles is the better deal.  These sites don't and can't take the condition into account at all. Most of them also don't know any data from the History Report and therefore can't use that information in their equation. Here are a few examples of things that really affect the value. These values come from Real Shoppers that were surveyed and given the chance to put a value on each item.


One Owner – a one owner vehicle has $750 higher value on a vehicle that is 5 or more years old. It has a value of over $1,000 more compared to a vehicle with 3 owners or if a vehicle is over 8 years old.


Accidents: An  Accident Free vehicle verses one that shows an accident with little to no damage $500. Moderate Damage $1,000. Severe Damage or Airbags Deployed - $2,000(or more)


Smoke Foul Odor – This one really has a huge range. Most people(non-smokers) put a value of over $1,500 for one that is smoke free vs smoke odor. Many customers commented that they would not buy a vehicle with a foul smoke smell at any price. This can impact a vehicle thousands of dollars.


Tires: A vehicle with new tires has a $500 higher value than one needing tires. In some vehicles it could be as high as $1,000. This is one where you have to see and account for how much life is left and adjust your pricing accordingly.


Repairs/Maintenance: A vehicle that has been inspected, serviced and repaired on average has a $500 higher value than one that is in need of repairs. Always have a car inspected before you purchase it. It could easily add up to thousands of dollars if you buy a vehicle that is deficient on maintenance and repairs. Brake Job - $275-$500 – Alignment $70 – Timing Belt - $700-$900 – Suspension Work - $300-$600 – Oil Leaks - $500. Major engine and transmission work could easily get into the thousands of dollars for repairs. Spending $50-$75 for a pre-purchase inspection would be worth it.


Body Condition – A vehicle with Several minor door dings is worth about $200 less. Scratches needing paintwork to fix - $500. Often you will see poor previous repairs on bumpers. This changes values buy over $500 if substandard work is done. Cracked Windshield - $200


Interior Condition: Rips/Tears/Stains in Leather easily have $200- $500 impact on value. Also check for worn steering wheels, stains/tears in carpet or seat belts.


Canadian Vehicles: The US and mostly norther states are getting flooded with vehicles that spent their life in Canada. These vehicle should not be very high on your list of vehicles to consider. These vehicles can have a huge impact on the value for a number of reasons( Read: Why you should avoid buying a Canadian Vehicle). Canadian vehicles are worth $1,000 less and in many cases $2,000.



As you can see you can have two seemingly identical vehicles sitting next to each other, both with same year, make, model, options, color, and miles. Based on the above scenarios you could easily have a $3,000 difference in values. On paper both would have the same value but in reality one truly is a Good Deal and the other is one you should probably not consider. These websites don't subtract one dime for a vehicle that smells like smoke, has spent its life in Canada or is in Below Average Condition and needing repairs. Those seem like pretty important things to me.....I bet they do to you as well.

Why you should avoid buying a Canadian Vehicle

You will often see in my used car listings that my vehicle is NOT Canadian.  I get asked quite often why I say that or why shouldn't they buy a Canadian used vehicle.    Over the last year there has been an excessive amount of Canadian used cars flooding the U.S. market.   These cars are being brought to many US Auto Auctions and dealers are buying them for their inventory.   Dealers like to buy them because often they are significantly less expensive than the exact same one that was made for and spent its life in the U.S.  These same dealers can make  hundreds even thousands of dollars more when they convince you to buy one.  Don't make a $2,000 mistake.  Here are a few things to consider.
#1 Canada has a much harsher climate the here in Michigan.  Many people would rather buy a vehicle that did not come from a northern state let alone from an even higher northern country.   I have seen many of these come from very rural areas of Canada like Nova Scotia and Newfoundland( island). Two months ago I had a customer considering one of our vehicles and another one down the road at another dealer that was $500 less.  I pointed out it was missing a few options and Canadian(from Newfoundland).  I then pointed out that the brake lines all had recently been replaced.  I have been selling used cars for over 23 years and have never changed all the brake lines on a 4 year old vehicle because of corrosion.  I am positive there were other items that were probably needing replacing very soon.  Once corrosion and rust starts it is very hard if not impossible to stop.
#2 These vehicles were not made to be sold the the U.S. Market.  The USA and Canada have different standards for their vehicles.  I am positive these may be very minor differences and not be all that concerning but nonetheless  it could also effect things like recalls and Service Bulletins.   Even warranties could be affected.   I have seen manufactures replace defective parts or extend the warranty for known issues.  Many times these are only in effect when in their home country.   Vehicle features and options may also be packaged quite differently in these vehicles.
#3 Carfax-  Now this is a bigger factor than most people realize.  Everyone wants to see the Carfax before they buy a used car.....and even if you don't, I implore you do INDEED LOOK AT THE CARFAX.  Carfax has been in the US market for over 20 year and is not perfect by any means.  Carfax has only recently been in the Canadian market for a very short time.   They are just now setting up their sources for all the information you find on the report.   A vehicle from Canada may be missing very important data that Carfax just doesn't have yet.   Most consumers would rather not buy a vehicle that has had 3 owners or been in a bad accident.    If Carfax does not have the data source yet, you could be buying a vehicle with an truly unknown vehicle history report even when the Carfax states One Owner(or is blank) and lists no accidents reported.   It may be a few years before Carfax has everything up to date on vehicles from Canada.  Until then......it might not be worth the risk.
#4 Resale Value - here is another point that can really impact you later down the road.  If Canadian cars are not all the desirable now and have a lower value today, just think  what this will mean when you want to sell or trade it in a few years from now.  It could bring hundreds to thousands of dollars less.  There are some people(and even dealers like me) that have no desire to have a Canadian vehicle at any price.   It could make it harder to get rid of down the road.  The last thing you want is to buy a vehicle today and then find out Carfax finally added an accident to the history report and no one wants your car because it is Canadian.
#5 This point is rather small but worth noting.  Right now there is enough of a used car shortage to make the prices of used cars a little higher than normal.   Cars that are in Higher Demand sell pretty quickly and dealers can make higher than average profits.  Do you think that Canada is sending us their good ,Above Average, high demand, higher profit and quick selling vehicles?  Of course not.  They are sending us the ones they can't sell in Canada.  Ones from rural areas of Nova Scotia, Newfoundland and other cities with inventory just sitting around.   If they don't want that car in Canada......do you really want it here?
In the end it is your choice on which used car to purchase.  Make sure you have all the facts and don't let a salesman sugarcoat the process or the vehicle.   If something feels off, walk away and look into it a bit more.  Don't make a $2000 mistake if you can help it.