Buying used cars isn’t just cheaper based on the sticker price; it’s also less expensive in terms of fees and insurance. This makes a used car an excellent option for those who want to stick to their financial plans.
New cars lose value quickly after leaving the dealership, with some models losing up to 40 percent of their worth within the first year alone. But used cars don’t depreciate as fast.
Most people consider buying a used car because it lets someone else bear the brunt of the steep depreciation that typically occurs during a new car’s first year. This can be as high as 20%, with additional declines each year afterward. The value of a used car can also fluctuate due to factors like mileage, condition (like large dents or stains), fuel economy, and shifts in consumer preferences for specific types of cars.
Luckily, there are ways to slow down a vehicle’s depreciation. For example, reducing your mileage can make a big difference. Also, certain vehicles have lower depreciation rates than others — SUVs and pickup trucks tend to hold their value better. You can also learn about a particular vehicle’s depreciation rate by searching online.
You Can Afford It
Car costs can make up a big chunk of your budget, especially if you’re financing. You’ll also have to pay for gas, maintenance, and insurance. That’s why shopping around for the best prices is so important. Fortunately, you can save money by shopping for used cars. Many dealers and private sellers have online listings where you can find used cars for sale. Be sure to research each one and have it inspected by a mechanic.
You’ll also spend less on sales tax when you buy a used car, and your insurance will cost less since it’s based on the vehicle’s price. This can add up to huge savings in the long run. Plus, you’ll be less likely to end up upside down on your loan.
You Have More Options
While a new car may be the latest and greatest, used vehicles also offer plenty of options to consumers. Manufacturers are constantly tweaking and redesigning vehicles, but many changes may not affect your car when used. Additionally, many used vehicles are still under warranty. This is especially true for certified pre-owned cars, which have gone through a rigorous inspection and often benefit from being covered by their original manufacturer warranty. Buying a used vehicle will save you money on registration fees since many states structure those fees based on the vehicle’s age or weight. That’s a big saving over the sticker price. You can also save on insurance by purchasing a used car. However, make sure you do your research before selecting a specific model.
You Don’t Have to Worry About Repairs
While it’s possible to find some used cars that look like they came off the showroom floor, most have normal wear and tear. However, a good car wash and some maintenance can make them look almost new again.
Additionally, most used cars are cheaper to insure. This is because they’re typically less expensive to repair and have a lower depreciation rate.
If you’re looking for a safe investment, consider a certified pre-owned (CPO) vehicle. These are often lease returns with low mileage, thoroughly inspected and repaired, and include manufacturer warranties to help keep you protected.
You Can Keep It
As a result, it’s less likely that you’ll end up upside-down on your loan when you buy a used vehicle. This is because most sellers will verify a Carfax or AutoCheck report to ensure that the car wasn’t in an accident, has no outstanding recalls, or that the odometer hasn’t been tampered with. New vehicles also usually come with higher interest rates, which will cost you more money in the long run. If you’re concerned about the environment, you’ll also be more responsible by buying a used car. Most vehicle carbon emissions are produced during production and initial logistics, so a used car is a more environmentally friendly choice. You’ll also save on sales tax and insurance when you purchase a used vehicle.