If you’re in the market for a used car, truck or SUV in 2022, it won’t come as a surprise that vehicle inventories are low and prices are high. Unlike the last vehicle-supply crisis during the great recession, demand hasn’t let up for cars just because they’re hard to find. In fact, some of the vehicles on our recent Best Used Cars Under $10,000 list were retailing for half that amount in early 2021.
With too many buyers seeking too few vehicles, it’s more important than ever to be a savvy consumer, which means knowing the lay of the land, where to shop, what questions to ask of vehicle sellers and how to inspect your potential new ride.
Most of the important things to watch for haven’t changed in years even as vehicles have evolved, but the abnormal trajectory of used car values is a very recent phenomenon.
Why are Prices so High?
When Covid-19 shut the nation’s economy down in 2020, many automakers canceled orders for the semiconductor chips used for everything from car radios and engine management systems to chip-enabled car keys. They took this step fearing the virus would sharply curtail vehicle sales, and they would be stuck with a glut of chips.
As it turns out just the opposite was true.
As a result of this, automakers don’t have the chips needed to meet high demand for new cars, and most are struggling to keep up with production. With popular models like the Kia Telluride and Ford Bronco essentially sold out due to high demand, Americans literally switched gears and started heavily buying used cars.
According to auto industry analyst firm Cox Automotive, 40.9 million used cars were sold in the US in 2021, up about 10 percent over 2020 numbers. That number included 22.2 million sales by consumers to dealerships and online retailers like Shift and Carvana. Used car sales are expected to remain high this year, with Cox predicting 2022 numbers at 39.3 million used vehicle sales, with 22.1 million by consumers selling to dealers and online retailers.
hose numbers should continue to go down as new vehicle production continues to improve. For now, however, some very popular models (like the Toyota Tacoma) are selling for more used than they did new before the coronavirus/chip shortage crisis.
Don’t Abandon Ship!
Yes, used vehicles of all kinds cost more than they did two years ago, but you can still get great deals if you do your homework, and you’re ready to buy when a solid purchasing opportunity presents itself to you. Follow these steps to get the best deal:
Know what you want to buy, and be realistic about how much you want to spend. Remember, used vehicle prices are up about 10 percent generally, but some models might be even higher than that. The $25,000 Jeep you want to buy is now worth $27,500 or more, and it may or may not be worth it to you to stretch for that purchase.
Consider Certified Pre-Owned (CPO) Vehicles. Vehicles that qualify for manufacturer CPO programs are typically the best of the best. They’re often lease-return cars with low mileage and with all of their routine maintenance sorted out, and CPO programs typically offer excellent warranties.
In some cases, CPO vehicles can even come with coverage that exceeds that of new vehicles from the same brand in the same showroom. In 2018, I helped a relative out while purchasing a certified Pre-owned 2017 Lexus NX. The vehicle was a low-mileage demonstrator unit only a few months old, but because Lexus’ CPO program added two years to the factory warranty, it came with a longer factory warranty than a then-new 2018 NX.
Choose a reliable brand. It only takes a few keypad strokes to investigate whether the vehicle reliability you are looking for has a good record. When looking at luxury vehicles, remember the cost of service and maintenance will be much higher than popular-brand ones. It costs more to maintain a Lexus than a Toyota, even though that Lexus is built using Toyota parts. In general, the more whiz-bang features a vehicle has, the more expensive they will be to fix if they break.
Ask the Right Questions
When it comes time to actually shop and start driving cars, you’ll want to learn all you can about the specific vehicle you’re looking at. The following questions are all must-ask:
- Do you have service/maintenance records for the car?
- How many owners has it had?
- Does the vehicle have a clean title (beware of salvage – includes flood cars and rebuilt titles)? Paying for a service that checks title status and may have listings for service records like CarFax is a wise expenditure.
- Where was the vehicle driven or where did it come from? This is a very important question to ask as vehicles from salt water climate areas like Florida and winter climates where heavy salting of the roads can be prone to moderate to severe rusting.
- Does the vehicle come with a warranty? How much of that warranty is left? If you’re at a dealer, can you purchase an extended warranty?
- Is there a customer satisfaction return window? How long?
- How many keys come with the vehicle? Remember, during the microchip shortage, additional keys, even for used cars, may be hard to come by.
- Are the owner’s manuals in the car? Check and make sure for yourself. Owner’s manuals are the “bible” for your car, and provide all of the information you need on how to properly operate your vehicle and when to service it. If you buy from a dealer and the car you want to buy doesn’t have manuals, make a new, free set of manuals part of the deal.
- Are the spare tire and jacking tools present and in good shape?
- Does the vehicle have floor mats? In used vehicles, these are often stored in the trunk/hatch area to keep them clean for the new buyer.
Become A Vehicle Inspector
Once you’ve got answers to your questions, it’s time to take a closer look at the merchandise.
Check for rust. Rust is rarer than it was 30 years ago, but it still happens. Get on your knees and take a look at the underbody with a flashlight. Inspect lower door and fender areas for paint bubbles that indicate rust. Lift up trunk/hatch area and passenger cabin mats and look for rust or flood damage.
Look at the ground and at the oily bits. Use your eyes and a flashlight to look for leaks under the car, which could indicate the need for expensive engine, transmission or differential service. Check the vehicle underbody and the ground under the vehicle for evidence of leaks.
Take a quiet drive. During the test drive, leave the stereo system off and listen to the vehicle. Don’t just drive around the corner, experience the vehicle at city and highway speeds. Purposely drive down a rough road and listen for squeaks and rattles. Use your nose to sniff out any foul odors that may indicate engine or transmission damage, an exhaust leak, or even mold or mildew smells that could indicate a flood car or leak from a windshield, sunroof or trunk seal.
Drive straight. Check to make sure your potential purchase tracks in a straight line. Take someone with you during the test drive, or ask your salesperson or car owner to drive off in a straight line. If the vehicle is going straight, but looks like its driving off on an angle, this “crab walk” phenomenon could indicate severe body or suspension damage. Look at all tires for even wear or low tread.
If you’re not comfortable with getting dirty or you don’t think you know enough to really check out the vehicle, get a mechanical inspection. We always advise a pre-purchase inspection, and happily in 2022 services like Wrench Mobile Mechanics and RepairSmith offer mechanics that come to you or to the vehicle for such services. You might end up spending $250 on such services, but it’s well worth it for some added reassurance.
Create a Checklist
Don’t expect to remember all of the advice in this article if you are a relative newbie to the car buying process. Create a checklist with questions and items to look for as outlined above. If you have your own methods of checking things write them down so you don’t forget!
Vehicle purchases can become emotional if you find a car you really, really want or you’ve been looking forward to purchasing for quite some time.
Be sensitive and systematic, ask the right questions, and enjoy your used car purchase!