Survey finds car buyers are choosing used

It appears that a number of factors, including the state of the economy and the increased reliability of cars over the last decade, are leading Americans to increasingly consider buying a used car over a new one.

According to a new survey from Cars.com, 32 percent of car buyers who would have normally purchased a new car, shopped for a used car because of the state of the economy. That number has risen 5 percent from a similar survey done in October of last year.

Cars.com editor in chief Patrick Olsen said there are an increasing number of benefits to buying a used car.

“Consumers are still focused on cost-cutting, and one way to do that is to find a solid used car to help save on the depreciation costs that typically come with buying a new car,” he said.

Although cost savings is a big factor for the jump in used car sales, another factor driving the purchases is the increase in reliability for new cars over the last decade which has trickled down to the used car market.

A recent report from R.L. Polk & Co. finds that the median age of vehicles in the U.S. is growing and now stands at 9.4 years.

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An important step to a used car purchase – the inspection

When purchasing a used car, there are a number of factors that should come into play besides the price and look of the vehicle – most importantly, an inspection.

Although the look and price of a car are likely to be the first things that draw a consumer to a used car, Consumer Reports says used car buyers need to make sure what’s under the hood is working in proper order before making a purchase.

The magazine suggests that drivers look over as much of the car as they can, from checking the condition of the car’s body, to popping in a CD or cassette to make sure the sound system works.

“No matter who you buy from, always look over the vehicle thoroughly and take it to a mechanic for a complete inspection. Dress in old clothes and give the car a good going-over,” writes the news provider. “You can learn a great deal just by using your eyes, ears, and nose.”

Used cars are growing in sales as people find they are an inexpensive alternative to a new car and discover that car reliability has increased dramatically over the last decade.

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Car buyers increasing their loan lengths

It appears that with the state of the economy continuing to falter, Americans are becoming more open to extending the length of their car loans.

In October, the median length of loans in the U.S. was 48 months, according to a survey done by Cars.com. But in another survey from the website last month, the median loan length jumped to 60 months.

Although it looks like car buyers are becoming more willing to spend up to 60 months to pay off their vehicle, the survey finds that a growing number of people are actually extending the length of their loans beyond the five year mark.

The survey from Cars.com finds that the amount of people with loans of either 72 or 84 months increased from 10 percent in October to 26 percent last month.

Patrick Olson, editor in chief of Cars.com warns that taking loans of this length has consumers running the risk of being underwater.

“Obviously, the economy has consumers looking for ways to save by extending loans and cutting monthly payments,” Olsen said. “However, the real risk with that is consumers may wind up upside-down on their loan, owing more money on the car than it’s worth.

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Is Audi the car of the celebrities?

It appears that Audi might be the hot car these days as a number of celebrities have been seen sporting around in the cars of late with the most recent being newlywed Gisele Bundchen.

Bundchen, who married New England Patriots quarterback Tom Brady last month, was spotted by paparazzi driving an Audi A8L, which according to Edmunds.com starts at around $78,000.

Also fans of the Audi A8L are Heidi Klum and her husband Seal who have been seen driving the carmaker’s W12 model which runs about $120,000 and can go 0-60 in under six seconds.

Obviously none of the A8L drivers are concerned with gas mileage as Audi says the car gets a combined 18 miles per gallon.

The Brazilian model joins a number of other celebrities driving Audi’s including the carmaker’s most recent spokesman, actor Jason Statham who said he was happy to be the face of Audi’s Super Bowl commercial since he drives one in real life.

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Used car sales remain strong

Yet another report finds that as the economy continues to sag, more Americans in the market for a car are turning to used cars.

The Federal Reserve’s Summary of Commentary on Current Economic Conditions, more commonly referred to as the Beige Book, finds that consumer interest in used vehicles remained strong in February, even while new car sales plunge.

According to the report, in many of the major markets the Fed tracks, used car sales outperformed their new car equivalents.

“Sales of new automobiles and light trucks remained exceptionally sluggish, with Philadelphia, Richmond, and Kansas City reporting further declines from an already slow pace of sales,” finds the report. “Used vehicles fared better in general, with Kansas City and San Francisco noting that they were selling well and Cleveland and Chicago reporting improvement over the previous period.”

This appears to be an ongoing trend for the car industry as Edmunds.com reported in February that in the three months prior, more than half a million people who would have bought a new car during a better economic period chose a used car instead.

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More car buyers using the web to research

A recent report from Nielsen Online finds that a growing number of Americans are using the internet to help find and research their next car purchase.

The study found that even while the car industry struggled in recent months, more people in the car market have been increasing their use of sites like Edmunds.com and the Kelley Blue Book site, kbb.com.

From December to January, Nielsen Online says five of the top automotive websites saw their traffic increase, which the company says is typically a leading indicator of short-term vehicle demand.

Because the traffic for sites like kbb.com have been an indicator of future car sales, Nielsen Online says that if traffic continues to increase, it could mark an increase in the car market in the coming months.

The internet is having an increased effect on car buyers as more Americans turn to their computers to get information on cars before they step foot in a showroom or auto auction. Earlier this year CarFax reported that 75 percent of used car shoppers had been influenced by its report.

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Lower gas prices means more used hybrids on used car lots

Lower gas prices have dropped the demand, and therefore the price of used hybrid vehicles, which may make it a good time for consumers to shop for a used hybrid.

Although gas prices have fallen from the high figures consumers struggled with over the last few years, experts expect prices to go on the rise again at some point. But until that happens, it appears the appeal of hybrids has waned in light of gas prices under $2 per gallon.

Juan Flores, director of vehicle valuation for Kelley Blue Book told USA Today that sales of used hybrids are down 23.5 percent since last summer when gas was at its peak price, and have fallen 4.5 percent since January.

This has caused an excess of used hybrids on lots around the country, which could be good news for drivers looking to get their hands on a used hybrid vehicle.

Earlier this week Toyota unveiled its 2010 Prius at the Geneva Motor Show which the company says will get an EPA rated 50 miles per gallon.

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Car owners taking better care of their vehicles

It appears that car owners have been taking better care of their vehicles in recent years, which means the purchase of a used car is more reliable than it was in the past.

Especially as the economy has sagged, more people have put money into their cars to make improvements that they might have ignored in prior years.

Time Purcell, owner of Christie’s Service Station in Westport, Connecticut told the New Canaan News that he has seen an increase in people spending money on the maintenance of their vehicles instead of just buying a new car.

Purcell told the news provider that people have become used to having their cars services regularly when they were under warranty. When the warranty expires, drivers continue to use shops like his to get extensive checkups.

The rise in maintenance of these cars combined with increased reliability of new cars over the last decade has made used cars more attractive than they once were.

“[Consumers are] realizing that the used cars of today are not the used cars of a few years ago, and that realization is not positive for new car sales,” Jesse Toprak, an analyst at Edmunds told Dow Jones recently.

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New Jersey plans to pull cars from rivers

Authorities in New Jersey will have a number of wet cars on their hands in the next month when they begin to pull submerged vehicles from the Hackensack River in an attempt to clean up the waterway.

The Record of Bergen County reports that over the last week New Jersey state police have used sonar and help from environmental advocates to locate cars that have been dumped into the river over the course of decades.

The Hackensack Riverkeeper organization has been working with state troopers to help locate the vehicles and the organization’s head says the plan to remove the cars is good for the community.

“As they deteriorate they add even more pollution to the river,” he told the Record. “It makes a good statement to the community that we’re working with the state police to get these cars out of here. It also shows that we’re not going to tolerate this.”

State police hope to be able to identify the owners of the submerged vehicles and plan to prosecute.

It appears to be an effort throughout much of the region as the Newark Star-Ledger reports that state police also scoured the Passaic River in the past week.

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French company unveils air-powered car

With the high price of gas and the fear that the world’s supply of oil is in decline, some automakers are looking to alternatives to power the next generation of automobiles including some outside-the-box ideas.

At the Geneva Motor Show this week French company MDI unveiled a car that it says can run on something that is in great abundance in the world – air.

The company says that the car, dubbed the AirPod, can travel for 137 miles on a 46-gallon tank of compressed air, according to the International Herald Tribune.

In order to refill the vehicles, the news provider says drivers can plug the car into any standard outlet for eight hours to recharge the tank or visit “air stations” which will fill the chamber in two minutes.

The three-wheeled car is expected to hit roads later this year for about $7,500.

Also unveiled at the Geneva Motor Show was Toyota‘s next generation of its gas/electric hybrid, the Prius. The company says the 2010 model will get an EPA rated 50 miles per gallon, making it the most fuel efficient production car in the U.S.

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