If you’re in the market for a new car, check around at different dealerships. Used vehicles are always quite affordable, and there are many benefits to buying used rather than new ones. When considering a purchase, this article serves as a handy guide for the top reasons you should opt for used instead of new and what to watch out for when buying used cars.
1. Less Vehicle Depreciation
Vehicle depreciation is defined as the decrease in the value of a vehicle over time. This is the amount that your car loses in value as soon as you drive it off the lot. If you buy a new car, you are paying for the brand, color, and options available when purchasing it from the dealership. Over time, the factory options may get upgraded on your vehicle, but assume those are upgrades you will not get for free when buying a new car.
You are also paying for the dealer’s profit — those percentages of a car’s worth that they get to keep. On average, a new vehicle loses close to 15% of its value within the first three years and 5%. After four years, that depreciation could cost you as much as $26,000. It can be a significant amount to lose on early-term purchases.
2. Lower Insurance Cost
Insurance costs are another great reason to choose used vehicles over new ones. Newer cars depreciate rapidly, and you will see your premiums increase significantly if driven on the road for a few years without the proper coverage. You will spend more on insurance than you would for a new vehicle within those first couple of years. Also, remember that insurance companies charge higher rates for new drivers with little-to-no experience behind the wheel.
3. A Better Lot Selection
When purchasing a new car, you have access to a complete list of options and features. However, when buying an older model that needs some repairs or has significantly depreciated, it’s not always the case. If you are only after a safe and reliable vehicle for your personal use, this may not be an issue. However, if you want to buy a car that you can upgrade or customize, your options will be limited. The good thing is that used car dealerships are generally not selective in their sales models. You will always have the option of purchasing a vehicle that has been updated with additional features and accessories.
4. Save Money on the Purchase Price
A new car is significantly more expensive than a used vehicle. This is always the case, but it’s particularly true when buying a newer car that has never been on the road and has been sitting in the showroom. Assuming you are going for a similar model year and model type, buying a used car will help you save money on the purchase price.
Compared to a new car, used vehicles boast significantly lower depreciation rates, lower insurance premiums and vehicle taxes, and, of course, reduced purchase costs.