A brand-new car depreciates 10% once you leave the car lot and another 20% after the first year.
If you’re in the market to buy a new vehicle and not sure whether to choose a new or used car, you should consider a used one.
A lot of people in your position ask, “should I buy a car used?” After all, buying a brand-new car provides you with many luxuries and a warranty, but there are many reasons you should stick with a used car.
If you’re tossing around the idea of which type of vehicle you should buy, here are the top reasons to select a used car.
You Will Pay Less
If you’re wondering if it is better to buy a used or new car, the first thing to consider is the price you’ll pay. If you’re willing to spend a lot of money, and if you can afford to do this, then a new car might be right for you.
It’s not hard to see the price differences between new cars and used cars. Just visit a dealership and look at the price tags. You’ll instantly see the difference, and the difference is significant.
Most people prefer saving money, though, when purchasing vehicles. They look for deals and try to find the best options with affordability. You will pay a lot less for a used car than a new one in all situations.
If saving money is essential to you, start shopping for a used vehicle. You’ll not only pay less for the sticker price, but you’ll pay less for other costs, too, as you’ll see if you continue reading.
You Will Pay a Price Closer to the Car’s True Value
One of the reasons you’ll pay less for a used car is due to the way depreciation works with vehicles. A brand-new car costs more than it is actually worth, and you can see this by viewing a depreciation chart.
As mentioned above, the instant you leave the car lot with a brand-new car, the car’s value drops 10%. If you purchase a vehicle for $30,000, for example, it will be worth $27,000 when you pull away.
If you financed the entire purchase, you would instantly have an underwater loan on the car.
Buying a used car allows you to purchase a car that already depreciated. The price of the used car will reflect the depreciation it previously experienced. The result is that you end up paying a price that is closer to the car’s real value.
When you leave the lot with a used car, the value might drop a little, but it will not lose 10%.
You Can Research the Car Through a History Report
With the technology available today, you do not have to buy a used car blindly. You can research a vehicle before you buy it by obtaining a vehicle history report for the vehicle.
Suppose you look up used Fords for sale near me and find a few you like. You could visit the dealership to view and test drive these cars. If you want one of them, you could ask for a vehicle history report.
The history report on a vehicle tells you details about the number of owners, the service history, and the accidents it was in.
You can use this strategy to find the right used car to buy, but you can also look up other methods for learning how to choose a used car.
No matter what car you select, you should test everything on it and inspect it thoroughly. You should always test drive a car before buying it, too, and you may even want to read reviews about the vehicle before purchasing it.
You Can Pay Lower License and Registration Fees
You should also compare the costs you will pay for registration and license fees on new versus used cars. When you make this comparison, you’ll notice that the prices for these fees are significantly lower for used cars compared to new ones.
Most states set their fee structures on the value and age of vehicles. To register and plate a brand-new car, you will always pay more because it is newer and more valuable.
Older cars are worth less money and are older, so you will pay less for these fees when you visit your local Department of Motor Vehicles (DMV). You can look up the fee structures in your state by visiting the DMV website for your state.
Your Insurance Will Cost Less
The last difference to examine is the costs of insurance. If you own a car, you must purchase an auto insurance policy. It is the law.
If you don’t know a lot about the way insurance companies calculate rates, you might not understand the difference between insuring a new car versus a used car.
Insurance companies charge rates based on numerous factors. The age and value of the vehicle are highly weighted factors that affect the costs you will pay, though.
You pay higher rates for insuring a new car because its value is worth more. If you prefer saving money on insurance costs, choosing a used car will result in paying lower premiums. It’s as simple as that.
Should I Buy a Car Used? More Information to Help You Decide
Asking, “should I buy a car used?” is always a good question to consider when you need a different vehicle to drive. Now, you should understand the benefits you can reap by choosing a used car instead of a new one.
Would you like to learn more about the options you have? If so, check out our blog for helpful and insightful information related to the car-buying process.