When it comes time to buy a car, many dream of choosing the latest model they’ve seen in all the advertisements. While that shiny exterior and new features may seem exciting, the vast majority of buyers would be better off choosing a used vehicle. The benefits of choosing used cars extend beyond the obvious, and the choice can leave you with a more enjoyable experience behind the wheel as well as more money in your pocket.
No Drive-Off Depreciation
Possibly the greatest downfall to buying a brand-new car is the immediate loss of value when it is driven off the dealer’s lot. It is possible to buy a new car for $40,000, regret your choice the next day, and have the dealership take it back for only $30,000 because it isn’t technically new anymore – even if you only drove it ten miles. However, with a used car, this pitfall is completely avoided, as the car’s previous owner already took the drive-off depreciation hit on your behalf.
Skip Biggest Depreciation Period
When a new car drives off the lot, the next-highest period of depreciation is the first three years of the car’s life. As newer models are released, the car’s systems experience wear and tear, and factory warranties expire, many new cars plummets in value. Again, with a used car, someone else has already taken this financial blow for you. While cars are not considered an investment due to their constant depreciation, having a car keep more of its value over time is vital if you ever want or need to sell.
Lower Chance of Risky Financing
A large portion of those who buy new cars truly cannot afford to do so without signing on the dotted line for large amounts of debt. While “low monthly payment” and “$0 down” ads seem attractive, these offers can often trick consumers into promising to pay higher monthly payments than they can afford. As these promotional financing offers are much less common for used cars, new-to-you buyers can more easily grasp the entire financial burden they take on during purchase. Of course, with the lower prices offered for used cars, financing in general becomes less likely. You can make smaller payments for repairs using quick online loans but that should be for once a year option instead of becoming a routine.
Deal-Hunter’s Paradise
Choosing to purchase a used car is the best way to let your deal-hunting skills shine during the vehicle purchase process. While a dealership’s fixed price is generally the only option to purchase a new car, the world opens up for the savvy buyer of a used car. Cars can be purchased from a neighbor, the internet, a traditional dealership, a used-car shop, or even a local mechanic. Given all these options, you are much more likely to find an amazing deal on a car that fits your needs. Used cars are also better vehicles for negotiation, as the seller likely bought it for a small percentage of what they expect to sell for.
Also, read: Risks of Selling A Used Car Privately
Options to Guarantee Quality
The biggest fear people complain of when considering a used car is the fear of the unknown – there are no guarantees that the previous owner performed regular maintenance, drove the car in a particular way, or even that they are disclosing any accidents the vehicle has been in. However, in the modern world, that kind of used car experience is rare. At dealerships or smaller shops, buyers are almost always presented with a vehicle history report free of charge, which details everything from accidents to oil changes based on the car’s VIN number. Additionally, some dealerships offer certified pre-owned options or limited warranties on used vehicles.
Higher Variety Available
While new cars are only available in this year’s model, a car enthusiast can choose from a myriad of options when choosing a used vehicle. Previous years, models that have been discontinued, or customized paint jobs are a few extra options that open up for the world of used cars. While not every option available is a gem, the larger variety certainly enables consumers to choose what’s best for them.
Opportunity to Downgrade Features
New cars can often come with flashy new technology embedded in the dash, extra features like autostart or seat warmers, and exciting upgrades to the car’s interior. While these features can be fun, the added bumps to the car’s sticker price are often not worth it for the average consumer. While new cars may come with many such features, choosing from a variety of used cars offers the opportunity to downgrade features that aren’t worth the expense. Why pay for a new car with a sunroof if you don’t like feeling the wind on your head, or pay for heated seats if you live in Florida? A used car can avoid these excesses that may be built into the purchase of a new car.
Lower Associated Costs
An often overlooked, yet financially impactful advantage of used vehicles is the savings on associated costs. Not only do used vehicles cost less to drive off the lot, but they also cost less to own. Insurance premiums are the biggest factor, as older cars don’t cost nearly as much to insure. A used-car buyer also saves on excise tax, registration, and even speeding tickets in some areas. While some of these costs are offset by the extra costs of increased maintenance or the occasional repair, the savings still balance out in favor of used-car buyers. The average American spends about 20% of their income on basic transportation, and the figure is even higher for low-income households. As this is such a large portion of the average budget, every little decrease can add up to huge savings.
Conclusion
It is quite easy and also fun to repurpose household items it not only brings out your creative side, but it also declutters your home and saves you time and money getting things to hold or store your stuff when they’re already available. So before you regard that item as junk and waste of space, pause to consider what purpose you can serve. Get your creative sides working, and you just might be saved an extra trip to the market.
Katherine Rippey is a seasoned writer with in depth knowledge of FInancial Management. She’s featured on many prominent financial blogs, and works as a financial writer for several clients in USA & Canada.
