Pre-owned cars: Tried and tested, or used and abused?By Tessa R. Salazar
Philippine Daily Inquirer
Here’s a trick question for all you Santa-philes out there: Does Santa Claus ride a brand-new sleigh every year, or does he just buy a used one from the previous Santa?
It’s the season of giving, and everyone expects to give—or get—something “shiny and new.” But Inquirer Motoring has to ask, can’t used cars look and feel shiny and new, too? Inquirer Motoring went around and asked some people who know their cars, and we hit the books, too, to find out if the one who gives or gets a pre-owned car can be considered naughty or nice.
“The statement: ‘Buying a used car is buying someone else’s troubles,’ is illogical logic (sic), yet the fear of used merchandise persists in the mind of the consumer. If you can believe the fact that not everyone trades in a car just because it is giving him trouble, you will find it easier to make your purchase. Consider, too, that you always have the right to thoroughly inspect the car, drive it, and have it checked out by a mechanic and, when you are certain that it is mechanically fit, you have the right to buy and enjoy it.”
Salesman James R. Ross tells this to readers of his book “A Car Salesman Tells All: How to Buy a Car.” Here, he also shares with readers how to conduct their own used-car inspection, thoroughly warning them that even if the price is fantastically low, it means nothing if you must pay for major repairs or if the car suffers a thousand nickle-and-dime after-warranty ailments. These inspection tips cover the body and attached parts, engine and fluid levels, interior components, on and off switches, special areas such as air conditioning and tow equipment.
So, when is a pre-owned car better than a brand-new one?
Speedlab’s Ferman Lao, Top Gear Philippines technical editor and Car Awards Group Inc. president, says that a pre-owned car is better than a new one when a new car doesn’t offer anything significantly better than a pre-owned one.
“Nowadays, more often than not, I don’t really see new cars being able to do anything significantly better than one that’s a few years older. A car that’s more than 15 years older or more, though, will be a bit different as the jump in technology will be a whole lot bigger,” he says.
Sunshine Cabrera-Masamayor of Toyota Motor Philippines’ business development group, Kaizen and business development department of the marketing division, says, “Generally, a brand-new car is always better in quality than a pre-owned car, simply because the parts are new, and have not depreciated. For this reason, brand-new cars are priced higher than pre-owned vehicles.”
She adds that “however, for consumers who cannot afford brand-new cars, pre-owned vehicles are very good alternatives because they offer ‘value for money.’ There are used cars that are considered ‘good finds’ (in good condition, low mileage, priced right).
“Since cars depreciate as soon as customers drive them out of the dealership, there are a few individuals who have their minds set to never purchase brand-new cars, because they simply do not want to pay for the car’s depreciation.”
RB, a used-car dealer whose business address is somewhere in Jupiter Street, Makati, and who professes to have had more than a decade of experience in the used-car business, says that “the only factor that makes a pre-owned car better than a brand-new one is the fact that it is cheaper to buy it.”
So what are these experts’ absolute “non-negotiables” when they are on the hunt for a used/pre-owned car?
Lao says that documents need to be in order. Body condition has to be satisfactory, with no major body damage to the chassis. Ideally, the paint should be original, even if it’s a little weathered. The electrical system should also be as original as possible. Modifications, if any, would have to be to his liking or satisfaction.
“This all assumes that the price is also right,” Lao quips.
“Lastly, I prefer to buy directly from the car owner and not through a used-car dealer,” Lao adds.
RB says he would “never ever consider buying the car when the car is not in the name of the seller, or the LTO (Land Transportation Office) mother file has been transferred, and the car is flooded or had a major collision.”
Cabrera-Masamayor says that the most important thing to look for when buying a used/pre-owned car is its condition (if it has been flooded, damaged, or if it has a high mileage).
“Buyers can verify the vehicles’ condition through thorough inspection and test-drive. Especially for flooded vehicles, problems in the vehicles are hard to repair, and if not repaired properly, it may appear again.”
Credibility or roadworthiness
Which would be harder to determine, the credibility/trustworthiness of a seller/dealer or the roadworthiness of the car?
Lao says the credibility of the seller is harder to determine. More often than not, a lot of used-car resellers buy the cars from someone else and sell these without giving any added value to the vehicle.
“They may clean it, they may fix it up a bit to make it more saleable and what not. But in general, if you know how to determine a car’s roadworthiness, then you aren’t getting your money’s worth; but for potential buyers who can’t, there may possibly be some benefit to buying from resellers,” says Lao.
Lao adds: “There are horror stories, of course, like a friend of mine who bought a car from his kumpare who was into buying and selling. The money literally went up in smoke when after a couple of days, the car caught fire while parked in his garage. My friend never got his money back.”
RB says both the credibility of the seller and the roadworthiness are difficult to determine.
“Sometimes the seller sells the car in bad faith. Example, not telling her or his spouse that the vehicle is being sold, or sometimes selling the car even if he or she still owes the bank, declaring that the documents were lost. With regards to roadworthiness, you only have a limited time to road-test it before buying it, so sometimes the car’s troubles come out after you made your investment,” he says.
Cabrera-Masamayor says the roadworthiness of a vehicle can be determined through a test drive and thorough inspection, adding that “it is like subjecting the vehicle to static and dynamic testing procedures using a specific list of parameters”. She adds that “more often than not, buyers can know a vehicle’s roadworthiness if those tests are done well.”
Cabrera-Masamayor stresses that “the credibility/trustworthiness of a used-car dealer is not as easy to determine because this is subjective in nature. This process takes a longer time and experience in dealing with the used-car dealers. There are used-car concerns that are very important to determine, and dealing only with trusted used-car dealers can address these concerns. These concerns include the ‘ills’ in the industry, such as carjacking, parallel importation (with unpaid duties and taxes) and conversion (from RH-drive to LH-drive, which can lead to unsafe cars), and it is very important that they are addressed. Therefore, consumers have to be more wary of the people they are dealing with than the roadworthiness of the car, because if a seller is trustworthy, it should follow that the vehicles he is selling are of good quality, and are roadworthy.”
“We must emphasize the importance of purchasing pre-owned vehicles from authorized dealers. A very credible car dealer is in a better position to ensure that pre-owned vehicles are of good quality and are legitimate,” adds Masamayor.
Difficulties of used-car dealers
Lao says that the biggest difficulty he observes with used-car dealers in the Philippines is avoiding acquiring a car with hidden issues, either with documentation or with the unit itself.
“Fixing those issues require money, and in some cases, like the guy who sold the car to my friend (which later caught fire because of electrical problems), how can you easily tell?”
RB says that due to the recent floods, most buyers have issues with flooded cars.
“And since we deal in used cars, most of our customers would have doubts. And also since the cars are used, it is hard to gain their trust with regards to documentation. They will have doubts that the car had been stolen or the documentation is not in order. The best way I deal with the issue of flooding is I tell them to bring their own trusted mechanic to inspect the car. And with regards to documentation, I let them go along for the PNP (Philippine National Police) clearance for them to see the process and to give them peace of mind.”
Cabrera-Masamayor says that one of the main problems of the used-car industry is bad reputation.
“In most countries, the image of a used-car salesman is not positive, the used-car dealers in our country also have a generally negative reputation. A used-car salesman is perceived to be regularly stretching the truth in order to close a transaction. There is even a saying: ‘Trust everyone but not a used-car salesman.’ This situation has been in existence for a long time without any signs of improvement; hence, the industry comes with a tagline: ‘Buyers beware!’”
She adds that one factor that turns off customers is the feeling of uncertainty that they experience in either selling or buying used cars.
“Since there are no standards in the industry, the consumer experience is not pleasant, and this often leads to dissatisfaction,” adds Cabrera-Masamayor. She also cites her company’s Toyota Pre-Owned Vehicle (TCPOV) Program that she says aims to help change the used-car industry by providing the lead in offering the Filipino customers transparent operations, especially in assessing and pricing their vehicles.
“Those satisfied customers can be our advertising, through word of mouth. It is not merely reputation that we aim to change, but rather the factors that create that reputation–good vehicle quality, fair assessment and pricing, efficient and clean documentation, and honest-to-goodness warranty.”
(To be continued)