Learn all the reasons why buying a used car often makes more sense financially. Better value for the money is only one of the reasons
Many aspiring car buyers still don’t entertain the idea of buying a used car. This is in spite of the numerous benefits of treading that path. These days, a decent used car dealership can help you get a fair deal on some amazing cars that will give new ones a run for their money.
What many people have failed to realize is that they can buy a high-quality used car that is still in good condition, which often makes more sense than buying a new car. Below are some reasons why it is a wiser investment than purchasing a new one.
Minimum Depreciation and Good Value for Money
What many people don’t know is that the value of a new car decreases up to 20% as soon as they drive it off the lot, and decreases in value by 10% across the first year of purchase. Think about that for a moment and you will come to the truth that when you purchase a brand-new car, you end up paying 30% more than necessary if you had acquired the same vehicle used, a year later.
When you buy a used car, it means that you have let the first owner take that depreciation blow. If you are smart or lucky enough to find a two-year-old used car, you might be looking at paying less than half of the brand-new, dealership sticker price and still maximum service years out of it.
Taking Advantage of Today’s Reliable Modern Vehicles
Although buying used cars was initially a bit of a risky investment, those days are long gone. Most mid-20th century cars were not built to last beyond 5-7 years, unlike today. Virtually every new generation car has an expectancy of a decade of service. For example, In the US, the average age of a vehicle in service is 11.6 years, which is up from just 6.7 years in 1995.
This is why a five-year-old used car that’s in excellent condition still has 10 or more years in its tank with thorough maintenance, and above all, it will not cost you as much as a brand-new vehicle.
High-Quality Used Vehicles Are Everywhere
These days, leasing is on the increase in both America and Canada. An estimation has it that 30% of all recent car transactions are leased, rising up to 10 percent in the past 5 years.
Most of these dealers resell those previously leased cars. Meanwhile, they usually about 3 years old, and still in top-notch shape. However, they have had their costs beat down because of their previous ownership, thereby making them incredible and reliable deals worth considering.
To top it off, they are most of the time still covered by manufacturer powertrain warranties among other warranties, giving you an extra yard of confidence with the deal.
The Internet has A Car’s Accident History
Unlike in the past where you are expected to trust and go by the approval of your used car dealership considering the vehicle’s past record, incidents, and shape, things have changed on that front these days.
With the vehicle’s VIN (Vehicle Identification Number) and internet-based tools like CarFax and Carproof, you can quickly look up the history of the vehicle you’re interested in with ease. There you can see what incidents the car had seen previously if any.
Lesser In Insurance Costs and Payments
Apart from factors like age, prior accidents, among other individual factors, car insurance is primarily dependent on the value of the car.
And since vehicle values take a hit during the first few years after purchase, acquiring a used car and having it insured will cost you less in the long run than buying a new vehicle.
More suitable Financing Terms
Interest rates on used vehicles are still normally a bit costlier than when the vehicles are new. It is because used car dealerships don’t usually need to “sell” their cars as hard – they don’t have to compel you with a 0% APR 5 year financing scheme.
Nevertheless, the interest rates on used vehicles are highly competitive, so you can agree on low down payments and long repayment terms to get a fair deal on your financing for the used car.
Same Price – Better Car!
Going for a used car will see you getting your hands on a car that would have been beyond your reach financially. For example, a $40,000 Audi that was leased for 3 years, and is being resold now has dropped 30-35% of its original value over those three years and is now being sold for $25,000 notwithstanding still being in great shape. That is where you come in. You will be getting a good conditioned Audi for the price of a lesser car.
Making the Smarter Choice
Why stretch your financial strength to the limit in the pursuit of a brand new car when you can still get good value and more in buying a quality used one? If you never knew, now you know why you shouldn’t stats back it up.