A used car, a pre-owned vehicle, or a second hand car, is a vehicle that has previously had one or more retail owners. Used cars are sold through a variety of outlets, including franchise and independent car dealers, rental car companies, leasing offices, auctions, and private party sales. Some car retailers offer "no-haggle prices," "certified" used cars, and extended service plans or warranties.

Used car industry

With annual sales of nearly $370 billion, the used vehicle industry represents almost half of the U.S. auto retail market and is the largest retail segment of the economy.^{[needs update][citation needed]} In 2005, about 44 million used cars were sold in the U.S., which is more than double that of the nearly 17 million new cars sold.^{[needs update]}

Used Car history

In 1898, the Empire State Motor Wagon Company in Catskill, New York is one of the very first American used car lots.^[1]

The used vehicle market is substantially larger than other large retail sectors, such as the school and office products market ($206 billion in estimated annual sales) and the home improvement market ($291 billion in estimated annual sales).^{[needs update]}

Used vehicle retailer

The Federal Trade Commission recommends that consumers consider a car retailer’s reputation when deciding where to purchase a used car.

Vehicle history reports

In the United States, an estimated 34-percent of consumers (in 2006) are buying vehicle history reports for used cars.^[2] Vehicle history reports are an inexpensive way to check the track record of any used vehicle. Vehicle history reports provide customers with a detailed record based on the vehicle's serial number (VIN). These reports will indicate items of public record, such as vehicle title branding, lemon law buybacks, odometer fraud and recalls. They may indicate minor/moderate collision damage or improper vehicle maintenance. An attempt to identify vehicles which have been previously owned by hire car rental agencies, police and emergency services or taxi fleets is also made. However, consumers should research vehicles carefully, as these reporting services only report the information to which they have access.

In some places the government is a provider of vehicle history - but this is usually a very limited service providing information on just one aspect of the history.

None of the vehicle history reporting services in any of the countries listed above offer the service for free.^{[citation needed]} Several of the services, most notably those in the United Kingdom and the United States, sell reports to dealers and then encourage the dealers to display the reports on their Internet sites. These reports are paid for by the dealer and then offered for free to potential buyers of the vehicle.^{[citation needed]}

In the UK, the DVLA provides information on the registration of vehicles to certain companies for consumer protection and anti-fraud purposes. The information may be added to by companies with details from the police, finance and insurance companies. Such companies are able to provide a car check online service for the public and motor trade.^[3]

Used car pricing

Used car pricing reports typically produce three forms of pricing information.

• Dealer or Retail Price is the price you should expect to pay if buying from a licensed new-car or used-car dealer — retail price. Dealer prices will always be the highest listed because of the dealership’s need to make a profit.
• Dealer Trade-in Price or wholesale price is the price you should expect to receive from a dealer if you trade in a car. This is also the price that a dealer will typically pay for a car at a dealer wholesale auction.
• Private-Party Price is the price you should expect to pay if you were buying from an individual. A private-party seller is hoping to get more money than they would with a trade-in to a dealer. A private-party buyer is hoping to pay less than the dealer retail price.

The growth of the Internet has fueled the availability of information on the prices of used cars. Whereas this information was once only available in trade publications that dealers had access to, there are now numerous sources for used car pricing. Multiple sources of used car pricing means that the prices you get from different sources often won't agree with each other. This is a result of each pricing guide receiving data from different sources and making different judgments about that data. The best way to determine a price is to cross-check prices with multiple sources and add a dose of your own good judgment to arrive at your price.

Pricing of used cars can be affected by geography; generally a convertible has a much higher demand in Florida than in New Hampshire. Similarly, pickups are often more in demand in rural than urban settings. Condition – Is the car in excellent, good or fair condition – has a major impact on pricing. Condition is based on appearances, vehicle history, mechanical condition and mileage. There is much subjectivity in how the condition of a car is evaluated.^[4]

There are various theories as to how the market determines the prices of used cars sold by private parties, especially relative to new cars. One theory suggests that new car dealers are able to put more effort into selling a car, and can therefore stimulate stronger demand. Another theory suggests that owners of problematic cars ("lemons") are more likely to want to sell their cars than owners of perfectly functioning vehicles. Therefore, someone buying a used car bears a higher risk of buying a lemon, and the market price tends to adjust downwards to reflect that.^[5]

Laws and regulations

Geographically specific laws

Canada

In Ontario, Canada, new and used vehicle sales are regulated by the Ontario Motor Vehicle Industry Council (OMVIC).

European Union

Used cars have a statutory warranty according to the system of laws of the European Union, the so-called "Liability for defects", which lasts for 12 months.

See also

• Lemon (automobile)
• Import
• Japanese used vehicle exporting
• Old car
• Car Allowance Rebate System, also known as "Cash for Clunkers", in the U.S.

References

External links

• Ontario Vehicle Information Package offers Ontario vehicle registration history
• Saskatchewan Damage Claims History Search provides the status of the vehicle (if any) in Saskatchewan and its damage claims history in Saskatchewan since Jan. 1, 1998.
• Federal Trade Commission
• Vincheck VIN checking in the U.S.
• [1]Used Cars Used car site in Pakistan.