When you’re in the market for a vehicle, the term “program car” might pop up, sparking curiosity about potential savings. Often, these are vehicles that dealerships have used as loaners, demonstrators, or rentals. The big question is: Are Program Cars A Good Deal? While the idea of getting a late-model car with a discount is appealing, it’s crucial to understand the nuances before making a decision. As auto repair experts at obdcarscantool.store, we’re here to guide you through what you need to consider to determine if a program car is the right choice for your needs and budget.
To make an informed decision, it’s essential to delve into the specifics of program cars and how they compare to both new and other used vehicles. Here’s a breakdown of key factors to evaluate.
Understanding Program Cars and Their Background
Program cars, also frequently referred to as “demo cars” or “service loaners,” typically have low mileage and are relatively recent models. Dealerships use these vehicles to give potential buyers test drives, provide temporary transportation to customers whose cars are being serviced, or as part of short-term rental agreements. Because they aren’t brand new and have been in use, they are sold as used cars, often at a price that’s lower than the MSRP of a new model. This price reduction is the primary allure, but it’s important to investigate beyond the initial savings.
Key Considerations Before Buying a Program Car
Before you jump at the prospect of a cheaper, almost-new car, consider these critical aspects:
Verify the Vehicle History
Always start by thoroughly checking the car’s history. Request a vehicle history report from the dealership and scrutinize it carefully. This report can reveal important details about the car’s past use, including any accidents, repairs, or title issues. Don’t hesitate to ask the salesperson for a detailed account of how the car was used. Understanding its history is the first step in ensuring you’re making a sound investment.
Check the Warranty Start Date
A crucial factor often overlooked is the “in-service” date, which marks the beginning of the manufacturer’s warranty. For program cars, this date might be earlier than the date you purchase the car, as the warranty period starts when the car is first put into service, not when it’s sold to an individual buyer. Ask the dealer for proof of this date. If the warranty has already been running for months, you’ll have less coverage than you would with a new car. If the dealer isn’t willing to extend the warranty to compensate for this lost period, negotiate for a lower price to reflect the diminished warranty coverage.
Compare to Certified Pre-Owned (CPO) Vehicles
Program cars are generally sold as used vehicles and often do not qualify as Certified Pre-Owned (CPO). CPO vehicles typically undergo a rigorous inspection and come with benefits like extended warranties and sometimes complimentary maintenance. While a program car might seem cheaper initially, a CPO vehicle, even if slightly older, can offer better long-term value due to these added benefits and assurances. Consider comparing the price and benefits of a program car to a CPO vehicle of a similar model year to see which offers a more compelling deal.
Do a New Car Cost Comparison
It’s vital to compare the price of the program car against a comparable new car. Obtain a quote for the program car and then research the True Market Value (TMV®) price of a brand-new equivalent model, factoring in any available incentives and rebates. Ask yourself if the price difference between the program car and a new car truly justifies the potential downsides, such as mileage, wear and tear, and the shortened warranty period. Sometimes, the savings might not be as significant as you initially expect.
Pricing a Program Car Effectively
There’s no fixed formula for pricing program cars, but a practical approach recommended by pricing experts involves the following steps:
- Determine the TMV price of a comparably equipped new vehicle of the same make, model, and style.
- Subtract any new car incentives or rebates applicable to that make and model.
- Deduct a reasonable amount for mileage and wear and tear. A commonly suggested figure is at least 20 cents per mile driven. This deduction should compensate for both the mileage and the general wear on the vehicle.
Inspect the Condition Meticulously
Program cars, especially demo vehicles, are often used for test drives and might be parked in busy dealership lots, increasing the risk of minor damages like dings and scratches. Thoroughly inspect the car for any signs of wear and tear or damage. Ask the salesperson directly if the vehicle has had any bodywork or repainting done. A detailed inspection can reveal issues that might not be immediately apparent and affect the car’s value.
Conclusion: Is a Program Car a Smart Choice?
Program cars can indeed represent a good deal, offering a way to drive a late-model vehicle at a reduced price. However, whether they are a good deal for you hinges on careful evaluation. By verifying the vehicle history, understanding the warranty implications, comparing prices with new and CPO vehicles, and thoroughly inspecting the car’s condition, you can make an informed decision. Don’t assume that a program car is automatically a bargain. Take the time to run the numbers and do your due diligence. If the price reflects the mileage, wear, and shortened warranty, and if you are comfortable with the car’s history and condition, then a program car could be a savvy way to save money without sacrificing the benefits of a newer vehicle.
