Exploring Auto Loan Types and Terms

The Sub-Levels of Pre-owned Vehicles: Reading into the Labels at the Dealership

When it comes to searching pre-owned vehicle dealership lots. you will find that there are many different levels of "pre-owned." You need to be able to read the labels on the vehicles to understand each level, and why two seemingly similar vehicles can have such a difference in price. The following tips will help you determine which level of pre-owned you are looking at when you are shopping these lots for another vehicle. 

Pre-owned as in "The Dealer Owned It and Drove It Around"

For all intents and purposes, you could completely consider every vehicle on every dealership lot everywhere as "pre-owned" because they are all owned by the dealers before they are sold to customers. The only times these vehicles are not sold as "pre-owned" but are sold as "new" are when the dealers do not remove them from the lot to drive around and take home with them for a night or two. In fact, any pre-owned car that does not list a previous non-dealer owner is one that the dealership used to allow dealers to drive home, drive to work, and run errands with. The car or truck will still look brand new, and the mileage will be ridiculously low (usually less than five thousand miles). Hence, it can be labeled and sold as "pre-owned" because, technically, it is. 

Pre-owned as in "Former Lease Vehicle"

These are the vehicles that used to be part of a leasing program. Customers would come in and ask to lease a vehicle instead of buying one, and then they would drive off the lot with one of the lease vehicles for a period of up to five years. During that time, the leased vehicles are pre-owned by both the dealership and by the driver/lessee. These vehicles still look nice, but there are some minor signs of wear and tear, potentially including higher mileage and faint odors from smoking. The one upshot to buying this degree of pre-owned vehicle is that you know that it was fully maintained by the dealership at all times, so it is still in excellent driving condition. 

Pre-owned as in "Bought New and Driven into the Dirt"

This type of pre-owned vehicle was probably purchased new, or nearly new, up to a decade ago. It still looks nice, and it has been verified as completely safe to drive. However, it is sold without warranty and as an "as is" pre-owned vehicle. These vehicles typically have really high mileage, but they often still have lots of life left in them for a bargain price. 

Visit a pre-owned vehicle dealership for more information.