For many drivers, the purchase of a used vehicle is a great way to save money and avoid the rising cost of new vehicles. As the price of new cars in the United States continues to increase, the idea of buying used grows in popularity.
Buying Used Vehicles to Save Money
Besides being cheaper on the sticker price, a used car comes with several other benefits. Not only will it be cheaper to buy it outright, but it will also be paying less for things like insurance, fees, and depreciation compared to buying a new car.
While buying a used vehicle and paying less is great, there are other reasons to buy a used car versus a new one. Keep in mind, however, not all used cars are created equal and you should do plenty of research before you move forward with the purchase.
1. Lower Insurance Costs
The cost of insurance varies depending on various factors such as your age, credit score, driving history, and location. Usually, the insurance costs for a used vehicle are lower than those for a new car. One of the most important factors that affect the cost of insurance is the value of the vehicle.
If your vehicle is older, you may want to consider adding liability coverage only if your state allows it. On the other hand, if your car is newer, you might want to add collision and comprehensive coverage. Be aware that insurance rates can vary due to the availability of policies.
2. Less Depreciation
Although depreciation is a common part of driving, a used vehicle offers lower depreciation than a new one. New cars typically depreciate around 20% when they’re driven off the lot, and most of them will lose another 10% during the first year.
A used vehicle depreciates at a slower rate than a new one, as its major depreciation has already occurred before you started driving it. Compared to new cars, a used vehicle will have a lower loan-to-value ratio.
3. Lower Dealer Fees
Similar to insurance, the fees that come with a used vehicle are not always the same across all 50 states. However, they are less expensive than those associated with a new car due to how the cost of the vehicle is lower when compared to a new one.
Before you buy a used car, make sure that you’re aware of the additional fees that come with it, such as the registration and title tax. You can check your state DMV website for more details.
4. Peace of Mind
Before the availability of vehicle history reports, many drivers considered a used car to be a risky purchase. However, with the rise of these reports, it’s now easier than ever to see a car’s history.
Before you sign on the dotted line, take advantage of the offerings from websites such as AutoCheck and CarValve to get a history report on the vehicle. These reports, which are based on the vehicle’s identification number, provide valuable information such as the mileage and whether or not the car was in any accidents.
5. Get More for Your Money
Another great advantage of buying used is that it allows you to stretch your budget. With used vehicles, you can get more options in vehicles than you would with new ones. If you’re planning on buying a luxury vehicle, you might not be able to afford the current model.
However, if you’re in the market for a used car, consider a vehicle that’s two or three years old. Since carmakers no longer produce new models every year, the style and tech differences of the newer models might not be noticeable.
Buying Certified Used
If you’re still worried that a used car might have problems, consider buying a certified pre-owned. This type of vehicle is typically less expensive than new cars, but it comes with additional peace of mind. Unlike new cars, certified pre-owned vehicles are made by a manufacturer and are subject to certain standards. These are essentially vehicles that have been thoroughly checked and are guaranteed against defects.
Getting behind the wheel of a used car is a great way to avoid the high costs associated with buying a new vehicle. It can provide you with peace of mind that the vehicle is in good condition and worth the cost.