![Car dealership in Rockville Maryland Jeep](https://upload.wikimedia.org/wikipedia/commons/f/f8/Car_dealership_in_Rockville_Maryland_Jeep.jpg)
A used car, a pre-owned vehicle, or a secondhand car, is a vehicle that has previously had one or more
retail
Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
owners. Used cars are sold through a variety of outlets, including franchise and independent
car dealers,
rental car
Renting, also known as hiring or letting, is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for a ...
companies,
buy here pay here In the used car market in the United States and Canada, buy here, pay here, often abbreviated as BHPH, refers to a method of running an automobile dealership in which dealers themselves extend credit to purchasers of automobiles. Typically, purchas ...
dealerships, leasing offices, auctions, and private party sales. Some car retailers offer "no-haggle prices,"
"certified" used cars, and
extended service plans or
warranties
In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract",Hogg M. (2011). ''Promises and Contract Law: Comparative Perspectives''p. 48 Cambri ...
.
Used car industry
Used car export industry
Depreciation levels of vehicles differ a lot in exporting and importing countries due to differences in income levels. The price of a vehicle depreciates faster in high-income countries than in low-income countries. Used vehicles sellers in high-income countries can thus sell their used vehicles for a higher price in low-income countries. This is the incentive to export used vehicles.
The major car exporting countries (which includes both new and used vehicles) are Japan, the EU, USA, and Canada.
In the EU, 60% of used cars are marketed in other EU countries. The used car exports in the EU are focused on East Europe, the Caucasus, Central Asia, and Africa.
In the US, used vehicle exports are focused on Mexico, Nigeria, and Benin.
The African continent gets 90% of its imports from Europe and many of these cars would not meet European emissions.
Used car industry in the USA
Established in 1898, the Empire State Motor Wagon Company in
Catskill, New York
Catskill is a town in the southeastern section of Greene County, New York, United States. The population was 11,298 at the 2020 census, the largest town in the county. The western part of the town is in the Catskill Park. The town contains a v ...
was one of the first American used car lots.
The used vehicle market is substantially larger than other large retail sectors, such as the school and office products market (US$206 billion in estimated annual sales) and the home improvement market (US$291 billion in estimated annual sales).
With annual sales of over
US$
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
350 billion, the used vehicle industry represents almost half of the U.S. auto retail market and is the largest retail segment of the economy. In 2016, about 17.6 million used cars and trucks were sold in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, and 38.5 million were sold worldwide.
Used vehicle retailer
![Kleen Kars sign, Salt Lake City, Utah](https://upload.wikimedia.org/wikipedia/commons/2/27/Kleen_Kars_sign%2C_Salt_Lake_City%2C_Utah.jpg)
The
Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
recommends that consumers consider a car retailer's reputation when deciding where to purchase a used car.
Vehicle history reports
In 2006, an estimated 34% of American used-vehicle buyers bought a vehicle history report. Vehicle history reports are one way to check the track record of any used vehicle. Vehicle history reports provide customers with a record based on the vehicle's
vehicle identification number
A vehicle identification number (VIN) (also called a chassis number or frame number) is a unique code, including a serial number, used by the automotive industry to identify individual motor vehicles, towed vehicles, motorcycles, scooters ...
(VIN). These reports will indicate items of public record, such as
vehicle title branding
Vehicle title branding is the use of a permanent designation on a vehicle's title, registration or permit documents to indicate that a vehicle has been written off due to collision, fire or flood damage or has been sold for scrap.
The designation ...
,
lemon law buybacks,
odometer fraud
Odometer fraud, also referred to as "busting miles" (United States) or "clocking" (UK, Ireland and Canada), is the illegal practice of rolling back odometers to make it appear that vehicles have lower mileage than they actually do. Odometer fraud ...
, and
product recall
A product recall is a request from a manufacturer to return a product after the discovery of safety issues or product defects that might endanger the consumer or put the maker/seller at risk of legal action.
The recall is an effort to limit ruin ...
. The report may indicate minor/moderate collision damage or improper vehicle maintenance. An attempt to identify vehicles that have been previously owned by hire car rental agencies,
police and emergency services or taxi fleets is also made. Consumers should research vehicles carefully, as these reporting services only report the information to which they have access.
In some countries, the government is a provider of vehicle history, but this is usually a limited service providing information on just one aspect of the history, such as the United Kingdom's
Ministry of Transport history. The
U.S. Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
's National Motor Vehicle Title Registration System has only about a dozen approved data providers, about half of which sell car history data to consumers; the rest work only with car dealers. None of them are currently free of charge to consumers and many are not free even to the car dealers. The
Better Business Bureau
Better Business Bureau (BBB) is a private, 501(c)(6) nonprofit organization founded in 1912. BBB's self-described mission is to focus on advancing marketplace trust, consisting of 97 independently incorporated local BBB organizations in the Unit ...
recommends using one of these approved data providers when researching a used car. The history reports use several sources to gather the data for each vehicle, including the police, the
Driver and Vehicle Licensing Agency
The Driver and Vehicle Licensing Agency (DVLA; cy, Asiantaeth Trwyddedu Gyrwyr a Cherbydau) is the organisation of the UK government responsible for maintaining a database of drivers in Great Britain and a database of vehicles for the entire ...
(DVLA), finance houses, the national mileage register, insurance companies, and industry bodies.
Several of the services, most notably those in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
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.
In the UK, the DVLA provides information on the registration of vehicles to certain companies for consumer protection and anti-fraud purposes. Companies may add to the reports of additional information gathered from police, finance, and insurance companies. Car history check services are available online for the public and motor trade customers.
In India, the Ministry of Road Transport and Highways is responsible for providing information related to vehicle registration and service history.
Used car pricing
Used car pricing reports typically produce three forms of the pricing information.
* Dealer or retail price is the price expected to pay if buying from a licensed new-car or used-car dealer.
* Dealer trade-in price or wholesale price is the price a shopper should expect to receive from a dealer if trading 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 expected to pay if 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
The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...
has fueled the availability of information on the prices of used cars. This information was once only available in trade publications that dealers had access to. There are now numerous sources, such as online appraisal tools and internet classified ads, for used car pricing. Multiple sources of used car pricing means that listed values from different sources may differ. Each pricing guide receiving data from different sources and makes different judgments about that data.
The pricing of used cars can be affected by geography. For example,
convertible
A convertible or cabriolet () is a passenger car that can be driven with or without a roof in place. The methods of retracting and storing the roof vary among eras and manufacturers.
A convertible car's design allows an open-air driving expe ...
s have a higher demand in warmer climates than in cooler areas. Similarly,
pickup truck
A pickup truck or pickup is a light-duty truck that has an enclosed cabin, and a back end made up of a cargo bed that is enclosed by three low walls with no roof (this cargo bed back end sometimes consists of a tailgate and removable covering) ...
s may be more in demand in
rural
In general, a rural area or a countryside is a geographic area that is located outside towns and cities. Typical rural areas have a low population density and small settlements. Agricultural areas and areas with forestry typically are describ ...
than
urban
Urban means "related to a city". In that sense, the term may refer to:
* Urban area, geographical area distinct from rural areas
* Urban culture, the culture of towns and cities
Urban may also refer to:
General
* Urban (name), a list of people ...
settings. The overall condition of the vehicle 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.
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
The lemon (''Citrus limon'') is a species of small evergreen trees in the flowering plant family Rutaceae, native to Asia, primarily Northeast India (Assam), Northern Myanmar or China.
The tree's ellipsoidal yellow fruit is used for culina ...
") 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.
Laws and regulations
Geographically specific laws
Africa
There are some 54 African countries that set import age restrictions on used vehicle imports, while 27 African countries do not place any import restrictions on used vehicle imports, and just 5 African countries (Egypt, South Africa, Sudan, Morocco) ban all used vehicle imports.
* Mauritius, Seychelles, Algeria, and Chad set an age restriction of 3 years
* Gabon and Senegal set an age restriction of 4 years
* Libya, Mozambique, Niger, and Tunesia set an age restriction of 5 years
* Côte d'Ivoire sets an age restriction of 7 years
* Kenya, Mauritania, Namibia set an age restriction of 8 years
* Eritrea, Benin, Democratic Republic of Congo set an age restriction of 10 years
* Liberia, Nigeria and Eswatini set an age restriction of 12 years
Gambia, Ghana, Mali, Côte d'Ivoire, and Cape Verde have also implemented punitive taxation for vehicles beyond a certain age. Algeria also has an internal consumption tax and Uganda has an environmental tax.
Zambia and South Africa also have an inspection test requirement as a precondition to vehicle registration on vehicle imports
Asia
=China
=
=Japan
=
Japan has an inspection tests as a precondition to vehicle registration on vehicle imports
Europe
=European Union
=
Used cars have a statutory warranty according to the system of laws of the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
, the so-called "Liability for defects", which lasts for 12 months.
North America
=Canada
=
In Ontario, Canada, new and used vehicle sales are regulated by the
Ontario Motor Vehicle Industry Council
OMVIC (Ontario Motor Vehicle Industry Council) is a council that regulates motor vehicle sales in Ontario that administers and enforces the Motor Vehicle Dealers Act on behalf of the Ontario Ministry of Government and Consumer Services (MGCS). OM ...
(OMVIC). In Alberta, Canada, new and used vehicle sales are regulated by the Alberta Motor Vehicle Industry Council (AMVIC).
Transport Canada
Transport Canada (french: Transports Canada) is the department within the Government of Canada responsible for developing regulations, policies and services of road, rail, marine and air transportation in Canada. It is part of the Transportati ...
mandates that all vehicles that are not made to comply with U.S. Federal Motor Vehicle Safety Standards are only eligible for importation if its age is 15 years old and above.
=United States
=
Used vehicles usually must be 25 years or older to be imported, but that requirement can be waived if a
Show or Display The "Show or Display" rule is a statutory amendment to the United States Federal Motor Vehicle Safety Standards (FMVSS) that allows certain privately imported automobiles to be exempted, if the vehicle in question is deemed to meet a standard of "h ...
exemption is given. The exemption for Show or Display limits the mileage to 2,500 miles (4,023 Kilometers) a year, and only select cars are eligible for the exemption. Canadian-market vehicles can also be federalized under separate regulations.
There are no age limits for used car exporting. Used cars can be exported at any time regardless of age or condition.
Central America
Panama has a used vehicle import age restriction of 10 years, while Mexico has an age restriction of 5 years.
In the Caribbean, most countries have age restrictions on used vehicle imports.
South America
Bolivia, Paraguay, and Peru are the only countries in South America that allow used vehicle imports. Paraguay has a used vehicle age limit of 10 years, while Peru has it set to 5 years.
Oceania
=Australia
=
In the
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
n state of
Queensland
)
, nickname = Sunshine State
, image_map = Queensland in Australia.svg
, map_caption = Location of Queensland in Australia
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, established_ ...
, when the odometer reading is fewer than , and the car was manufactured less than 10 years before the sale date, the warranty is three months or , whichever happens first. If the odometer reading is or more, or the car was manufactured 10 years or more before the sale date, there is no warranty. Also, motorcycles, caravans, and commercial vehicles do not have a warranty at all. A commercial vehicle is a car with nine seats or more, as well as a vehicle that is able to carry one ton of goods, unless it is a utility, which is a car designed to carry goods. For example, a Holden Commodore Utility or a Ford Falcon Utility. As these are cars that come with the back section being part of the car's body. Other vehicles that have an interchangeable back section are regarded as
cab chassis
A chassis cab, also called a cab chassis or half truck, is a type of vehicle construction, often found in medium duty truck commercial vehicles.
Instead of supplying the customer with a factory pre-assembled flatbed, cargo container, or other e ...
and the back of the vehicle can be ordered from the factory or can be custom-built to suit the needs of the vehicle buyer. The same as a light truck can be ordered as a tip truck or a body truck
See also
*
Certified Pre-Owned
*
Car supermarket
A car dealership, or car dealer, is a business that sells new or used cars, at the retail level, based on a dealership contract with an automaker or its sales subsidiary. Car dealerships also often sell spare parts and automotive mainten ...
*
Grey import vehicle
Grey import vehicles are new or used motor vehicles and motorcycles legally imported from another country through channels other than the maker's official distribution system. The synonymous term parallel import is sometimes substituted.
Car make ...
*
Decrepit car
A decrepit car is a car that is often old and damaged and is in a barely functional state. There are many slang terms used to describe such cars, the more popular including junk car, beater, clunker, hooptie, jalopy, shitbox, junker, and banger ...
*
Lemon (automobile)
In American English, a lemon is a vehicle that turns out to have several manufacturing issues affecting its safety, value or utility. Any vehicle with such severe issues may be termed a lemon, and by extension, so may any product with flaws too g ...
References
External links
Ontario Vehicle Information Packageoffers Ontario vehicle registration history
provides the status of the vehicle (if any) in Saskatchewan and its damage claims history in Saskatchewan since Jan. 1, 1998.
Federal Trade CommissionVincheck VIN checking in the U.S.
Rules about statutory warranties for selling used vehicles in Queensland: Department of Justice and Attorney-General
{{DEFAULTSORT:Used Car
Car ownership
Used car market