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A pre-owned vehicle, also known as a used car, is a vehicle that has previously had one or more owners. Used cars are sold through a variety of outlets, which include franchise and independent dealers, rental car companies, leasing companies, and used car superstores. Some car retailers offer "no-haggle prices," and "certified" used cars, and extended service plans or warranties. Individuals can also sell and purchase used cars through resources, such as newspaper classifieds,,, EBay,, and

CarMax, Inc. sells more used cars than any other retailer in the U.S. The company, which operates 71 used car superstores in 22 states, sold 285,950 used vehicles during its 2005 fiscal year. <ref>CarMax FY05 Annual Report</ref> Comparatively, AutoNation, Inc. is second in the U.S. for selling 235,313 used vehicles in 2005. AutoNation owns and operates 338 new vehicle franchises in 16 states.<ref>AutoNation FY05 Annual Report</ref>

Used car industry

With annual sales of nearly $370 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 2005, about 44 million used cars were sold in the U.S., which is more than double that of the nearly 17 million new cars sold. <ref>CNW Marketing/Research, New vehicle volume, Automotive News</ref>

The used vehicle market is substantially larger than other large retail sectors, such as the school and office products market ($206 billion in estimated annual sales) and the home improvement market ($291 billion in estimated annual sales).

Selecting a reputable used vehicle retailer

The Federal Trade Commission recommends that consumers consider a car retailer’s reputation when deciding where to purchase a used car. Get recommendations from friends, relatives and co-workers, or contact your local consumer protection agency to obtain information about reputable car dealers or retailers.

The Federal Trade Commission's Used Car Rule requires dealers to post a Buyers Guide in every used car they offer for sale.<ref>Federal Trade Commission</ref> The Buyers Guide must tell you:

  • whether the vehicle is being sold "as is" or with a warranty;
  • what percentage of the repair costs a dealer will pay under the warranty;
  • that spoken promises are difficult to enforce;
  • to get all promises in writing;
  • to keep the Buyers Guide for reference after the sale;
  • the major mechanical and electrical systems on the car, including some of the major problems you should look out for; and
  • to ask to have the car inspected by an independent mechanic before you buy.

Used vehicle history reports

An estimated 34-percent of consumers are buying vehicle history reports for used cars more frequently, partially in reaction to the number of vehicles that may have been damaged by flooding during hurricanes. About 30-percent of manufacturer franchise dealers provide vehicle history reports to customers at no additional cost. In addition, some car retailers, such as CarMax and online car classified advertisers, such as offer vehicle history reports for their inventory at no charge to customers. Consumers can also purchase vehicle history reports online through companies like and <ref name="JDPower">J.D. Power and Associates</ref>

Researching, selecting and purchasing used cars online

Consumers are increasingly researching, selecting and purchasing used vehicles online. Nearly a quarter of used-auto shoppers (22-percent) bought a vehicle found online, meaning that they selected the car online but then had to meet with the dealer or seller in person to finalize paperwork and pick up the car. <ref name="JDPower"/> The top five Websites for used car searches according to J.D. Power and Associates include:

  • Kelley Blue Book
  • EBay Motors



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