You decided to buy a car because it makes more sense financially as compared to
leasing. And you are going to follow our advice on how to get the best price for
that car. We aren’t done yet! Through research and testing, we have come up with
the BEST answer to the question of how long should you keep your car, and how to
get the best resale price for it!
This plan works mainly with cars that sell large quantities, have good reliability
ratings and are the ones that people look for first when buying a used car. The
best examples would be the Honda Accord and Toyota Camry. For our example, we will
go with the Honda Accord. From our experience, this car is the ideal model to use
this plan due to its high resale value, good reliability ratings and the fact that
people look to Honda as one of the first choices when buying a used car.
The quick facts on our plan: Buy a car (of course for a good deal), and then buy
a manufacturers extended warranty for the longest term possible. This warranty MUST
only be from the manufacturer itself, and should be a $0 deductible warranty. Honda
works great with this example because they are one of the few manufacturers that
offer a 8-year warranty. Many only offer 7 years.
WAIT, most research says that extended warranties are a waste of money!Why are
we going against that thought? It is simple-a warranty offers much more then just
insurance against repairs. Take a look at this example we have done:
1) Before buying the Accord, get the BEST price on a Honda extended warranty, called
Hondacare. You can easily get the best price online from various Honda dealers.
Any Honda dealer can sell you this warranty, even after you buy the car.
There are three well known Honda dealers who sell Hondacare online and who offer
the BEST prices. You just fill in their online form and get a price quote, sometimes
it is instant. Since everything is done online and through the mail, it doesn’t
matter what dealer you buy the warranty from. Go for the 8 year/120,000 warranty
with $0 deductible. The great thing about online is there is no sales tax charge.
You can find other dealers too but these two tend to offer the best price. You
can buy the warranty after you have purchased your car, it does not need to be done
on the same day. However you should get a quote and print it out prior to going in
to buying your new car. You can just type in the car info online and say it has
100 miles on it. This info is for pricing only.
2) When you purchase your new Accord, you will eventually be taken to the office
of the finance manager. Here is where they will try and sell you and all sorts of
things you don’t need which are way overpriced. A warranty will also be offered.
Before they start their sales pitch you should state that you are going buy a Hondacare
Factory warranty online and that you already have a price. They may tell you that
the 3rd party warranty they offer is better, has more features, costs less money,
etc. DO NOT BELIEVE THEM! Nothing beats the ease and coverage of a factory warranty.
The only warranty you want is genuine Hondacare, straight from Honda itself. They
may also say that you can only buy it from them, at the time of sale. That is not
true either! If they ask, take out the lowest price quote you have. Remember that
there is usually no sales tax on the online warranty. The dealer will need charge
you tax. So even if they offer to match the price, it will still cost you more.
You can bargain for an even lower price so that it comes in equal AFTER they add
in the tax. Or you can decide that the dealer was close enough, and go with them.
This way you won’t have to fill out any paperwork and they can roll it into your
loan if you are financing. Either way, you should get a great price on the warranty,
generally around $1,200.
This warranty offers free roadside assistance. If you normally get AAA service, you
will save money by canceling the AAA. That can offset some of the warranty costs.
There are also some other smaller benefits such as free rental cars, hotel stays,
etc. If most anything goes wrong on the car, it will cost you $0 to fix. There
is no paperwork to deal with as every Honda dealer has a record that you have Hondacare,
they all use the same database. Make sure to keep a nice, neat record of all of
your maintenance receipts.
3) Keep your car for between 6-7 years, or up to 90,000 miles. They key is that
you want to have some of your warranty left when you go to sell the car.
4) Around the time that you buy the car you should also buy a brand new set of Honda
genuine mats that fit the car. These you will then store away for when you sell
the car. You should get these around the time you buy the car as they will be much
more difficult and expensive to get when you sell the car.
5) About 7 years later, it is time to sell the car. Use Kelly Blue Book (kbb.com)
to determine a fair price. If your car is in good shape, you should price it near
the high end of the range. We have had good success using Craigslist and other online
selling services. Generally what we have found is that your car will be relatively
easy to sell if you follow these steps:
A) Have the car cleaned and detailed/waxed prior to showing the car
B) Have a nice neat folder/binder of all the repair receipts in date order
C) Have your Hondacare warranty readily available for review
D) Just before showing the car, put your brand new mats (that you have stored for
the last 7 years) in the car.
Here are your key points to tell potential buyers who are interested in your car:
A) This car has nothing wrong with it. Since it is covered by a factory Hondacare
warranty with $0 deductible, if there was anything wrong with it you would simply
take it to the dealer to fix, at no cost to you. This provides assurance to the
buyer that you aren’t hiding a needed major repair. It also assures them that at
any point when you have owned the car, if there was a problem, you would have taken
care of it since it is covered by the warranty.
B) You will transfer the warranty to the buyer and they get to enjoy all of the benefits
and the same protection for the remaining 8 years/120,000 mile period. Tell them
that you will pay to have this warranty transferred and will take care of all the
paperwork. This is a $50 fee and a simple form to do the transfer.
C) Show them how you have all the organized repair records and offer to show it to
D) When they look at your car all nice and clean with brand new carpet mats throughout,
along with the warranty protection and comfort that you took care of all repairs,
your car will look great compared to others they have seen. Especially when they
compare it to other cars sold by individuals. Stress to them how they never know
what repair a person is hiding, or how they could drive off with someone elses car
and the transmission goes the next day. With your car that would all be covered
at no cost to them.
E) Tell them that you have other prospective buyers interested and you will sell
to the first person who gives you the asking price. If within a few weeks, nobody
offers you the price you want, you will consider a lower price. But tell them that
the combination of the condition of the car, and the warranty protection means that
the car tends to sell quick and for the asking price.
In the end by doing this plan, you have maximized the resale price of your car and
made for a relatively easy sale of the car if you present it right. You can then
take the proceeds of your sale, and start the process over again with a brand new
car. The easier route is to just trade a car in. However you will get thousands
more if you do a little work and sell it yourself. The warranty is the main selling
tool. Good luck! Feel free to contact us with any comments or questions on this