Top advantages to buying a used car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by offering you interactive financial calculators and tools that provide objective and unique content, by enabling you to conduct your own research and compare data for free and help you make informed financial decisions. Bankrate has agreements with issuers such as, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The products that appear on this site are from companies that pay us. This compensation could affect how and where products appear on the site, such as for instance, the order in which they appear in the listing categories, except where prohibited by law. This applies to our mortgage home equity, mortgage and other home loan products. However, this compensation will not influence the content we publish or the reviews you read on this site. We do not include the vast array of companies or financial deals that could be accessible to you. SHARE: Barry Austin Photography/Getty Images
4 minutes read. The publication was published on March 02, 2023.
Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is an expert in understanding the ins and outs of securely borrowing money to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers gain confidence to take control of their finances by providing precise, well-studied information that breaks down otherwise complicated topics into bite-sized pieces. The Bankrate guarantee
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We are compensated for the promotion of sponsored goods and, services, or when you click on certain links posted on our website. This compensation could influence the manner, place and in what order items appear in listing categories and categories, unless it is prohibited by law for our mortgage and home equity products, as well as other products for home loans. Other elements, like our own proprietary website rules and whether a product is available within your area or at your personal credit score may also influence how and where products appear on this website. While we strive to provide a wide range offers, Bankrate does not include information about each credit or financial product or service. Purchasing a used car over the purchase of a brand new car is a good alternative for many drivers. While rates in the U.S. soar to record high numbers, Americans are seeing its effects at the grocery store check-out and in the . With new car costing close to $47,000 as of early 2022 as per Kelley Blue Book, this could be the best opportunity to save money and invest in a used . Buy used and save money Buying a used car rather than a new one can help you save money in several ways. The cost of a used car is less than the price on the sticker alone, but that’s not where the savings end. Additionally, you’ll be reaching for your wallet much lower than if you were driving the brand new car in terms of fees, insurance and vehicle depreciation. The fourth quarter of 2022 the price for a used car is $526. Those financing a new vehicle paid $716, according to . Saving over $180 a month can add up quickly and you could save thousands of dollars by purchasing a used car over an entirely new one. While paying a lower cost for the same vehicle model from a different year is the most obvious reason to purchase used cars but there are other reasons too. Five benefits of buying used Not all used cars aren’t made equal. You must before deciding if a used car has a good condition or bad shape. With that caveat , here are five great reasons to buy a used vehicle. 1. Depreciation of vehicles is an unavoidable reality of daily driving, however a used vehicle offers much lower depreciation than a brand new vehicle. New cars generally depreciate around 20% when taken off the lot. The majority of cars lose another 10 percent in value within the initial year. It’s a loss of 30 percent within the first year of ownership. A used vehicle depreciates in a slower manner than a new vehicle. This is because when you’re driving of the vehicle, it’ll have already experienced its significant depreciation. Brand new cars depreciate when they leave the dealership, but a used vehicle is more depreciated and this means that you’ll have a higher stability for your loan-to-value ratio. 2. Lower insurance costs Insurance costs vary based on your experience with driving, your age and credit score, mileage, and location. The majority of the time — and just as the vehicle will cost less — insurance for a used vehicle will be less expensive than the cost of a brand new car. One of the main factors in determining the value is the worth of the car. Because it is less expensive than a more modern version, the price of insurance will be lower. For coverage recommendations, if your vehicle is older , you might want to consider liability only in the event that your state permits it, versus adding comprehensive and collision coverage if your vehicle is newer. But insurance rates are not always uniform, so to save money, make certain to research the estimated cost of your auto insurance prior to leaving the lot of the dealer. 3. Lower dealer fees As insurance varies by ZIP code, the expected fees that come with your used car are not equally across all 50 states. But they are less expensive than the fees associated with a new vehicle due to the fact that the cost of the vehicle is much lower in the beginning. This is particularly true for any sales tax that you could be required to pay. In order to prepare for the extra costs associated with the use of to purchase a vehicle, visit your state’s DMV website for more information on the registration fee and title tax and fees for documentation. 4. A lot more bang for your buck The ability to stretch your budget for car purchases is another major benefit of buying an used vehicle. You can buy more car by buying second-hand rather than new. If you’ve got your eyes set on a luxury vehicle but you’re not able to afford this year’s model. However, one that is about two or three years old might be more appropriate for your budget. Also, it is important to take into consideration the fact that carmakers have stopped re-designing their vehicles every year, which means that the technological and design changes may be less noticeable. Consider these savings potential and compare which is the best for you using the help of . 5. A greater sense of security the past, buying used vehicles was viewed as a risk and many drivers viewed it as a danger, but the availability of car history reports has changed the perception. Drivers can now access information about the vehicle’s ownership history as well as the history of accidents and the status of the title, mileage, and much more. Before approving an used car, take advantage of the services offered by websites such as Carfax and AutoCheck to view the history report on the vehicle. Based on the vehicle’s identification number, also known as a VIN. The reports offer various valuable information such as proof of mileage and whether the vehicle was ever declared a complete damage by an insurer. Certified pre-owned option If you’re worried about the possibility of hidden issues on a vehicle you’ve used before buying a certified pre-owned vehicle could be the right choice for you. You will still save money by purchasing an older car, but also increase your confidence in the security of the vehicle. Certified pre-owned — or CPO programs differ between manufacturers. The basic concept is that CPO cars are vehicles that are in compliance with a manufacturer’s standards and have some type of warranty against defects, similar to a new-car warranty. For this, you must check the inventory of the dealership for the CPO vehicle you’re searching for. Each dealership has its own terminology when it comes to pre-owned alternatives, so be certain to do some research before going to the showroom. Many of these models also come with additional warranties, so check the assurance to find out what it covers. Following steps: Buying a secondhand vehicle is an excellent opportunity to take the wheel without spending the same amount as you would for a brand new vehicle. You will be met with less vehicle depreciation and spend less on insurance and registration but still be in assurance that your vehicle is in good condition. If you are looking to finance a used car ensure that you check current so you know you’re getting the best deal available. This is what financing will provide. Leanr SHARE more:
Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers with the details of borrowing money to buy an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to control their finances with clear, well-researched information that breaks down complex topics into manageable bites.
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