Top advantages to buying a used car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by providing you with interactive financial calculators and tools as well as publishing objective and original content, by enabling users to conduct research and evaluate information for no cost – so that you can make sound financial decisions. Bankrate has agreements with issuers such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The offers that appear on this site are from companies that pay us. This compensation may impact how and where products are displayed on the site, such as, for example, the sequence in which they appear within the listing categories and other categories, unless prohibited by law. Our mortgage, home equity and other home loan products. This compensation, however, does have no impact on the information we provide, or the reviews that you see on this site. We do not cover the entire universe of businesses or financial offerings that might be accessible to you. SHARE: Barry Austin Photography/Getty Images
4 min 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 specializes in assisting readers in navigating the details of borrowing money to purchase cars. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain confidence to take control of their finances with precise, well-studied facts that break down complicated subjects into digestible pieces. The Bankrate promises
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This compensation could influence the manner, place and when products appear in listing categories, except where prohibited by law. We also offer mortgage and home equity products, as well as other home loan products. Other factors, like our own proprietary website rules and whether a product is offered in the area you reside in or is within your self-selected credit score range can also impact how and where products appear on this site. We strive to offer an array of offers, Bankrate does not include details about every financial or credit item or product. The option of buying a used car instead of a new vehicle is a good option for many drivers. As the rates in the U.S. soar to record levels, Americans are seeing its effects at the grocery store checkout as well as at the . With new car costing close to $47,000 by the time 2022 begins, as per Kelley Blue Book it could be the best time to save some money and purchase a used . Buying used will save you money Buying a used vehicle instead of a brand new one could make a huge difference in several ways. The cost of a used car is less than the sticker price alone — but that’s not where your savings end. Additionally, you’ll be reaching for your wallet much smaller than you would if you owned a brand-new vehicle with regards to fees such as insurance, vehicle depreciation and other fees. The in the Fourth Quarter of 2022, the cost for an used car is $526, while drivers who finance a brand new car paid $716 according to . The savings of more than $180 per month adds up quickly, and you could save thousands by going for an used vehicle over an entirely new one. While paying a lower cost for the same model from a different year is the obvious reason to buy a used car There are other benefits as well. 5 advantages to buying used There are many reasons to buy used. Not all used cars are identical. You must before deciding whether a car you are considering purchasing is in good or bad condition. With that caveat Here are five great advantages of buying a secondhand car. 1. Depreciation of vehicles is an unavoidable reality of the road, but an older vehicle has lower depreciation than a brand new vehicle. New cars generally depreciate around 20% when driven off the lot. The majority of cars also lose 10 percent of their value during the first year. It’s a loss of 30 percent in the initial one-year period of ownership. A used vehicle depreciates at a lower rate than a new vehicle. This is because when you are behind the wheel of the vehicle, it’ll have already experienced its significant depreciation. Brand new cars depreciate as soon as they leave the showroom, but a used vehicle has a slower rate of depreciation and this means that you’ll have a higher stability for your loan-to-value ratio. 2. Costs for insurance are lower. They vary based on your age, driving history and rating on your credit, the mileage and location. The majority of the time — and just since the car is less, the insurance cost for used vehicles is typically lower than the cost of a brand new vehicle. One of the main factors in determining the value is the worth of the car. Since a car is more expensive than a modern version, the cost of insurance should be less. In terms of recommended coverage If your car is older then you may be able to think about liability if your state allows it, as opposed to adding collision and comprehensive coverage when your vehicle is more modern. Insurance rates aren’t always consistent so to save money be certain to research the expected cost of auto insurance before driving off the dealership lot. 3. Lower dealership costs Just as insurance varies by ZIP code, the expected costs associated with your used car aren’t equal across the 50 states. They are, however, less costly than the costs associated with a new vehicle since the price of the vehicle is much lower than the cost of the vehicle in the first place. This is especially true for any sales tax you might be required to pay. To prepare for the additional charges that are associated with using , check your state DMV website for more information on the registration fee and title tax and documentation fees. 4. More bang for your buck The ability to stretch your budget for car purchases is another advantage that comes with buying a used car. You can buy more car by buying second-hand rather than new. If you have your sights set on a luxury vehicle but you’re not able to afford this year’s model, but one that’s 2 or 3 years old might be more appropriate for your budget. Also, it is important to take into consideration the fact that car manufacturers are no longer redesigning their vehicles each year, which means that the technological and style differences may be less noticeable. Consider these savings potential and even compare which is the best for you using a . 5. More peace of mind In the past, driving used cars carried a stigma and many people saw it as a risk However, the availability of car history reports has altered the landscape. Drivers now can see details regarding the car’s owner and accident history and the status of the title, mileage, and more. Before you sign off on the purchase of a second-hand vehicle, make use of the services offered by websites such as Carfax or AutoCheck to review the history report for the vehicle. Based on the car’s vehicle identification number, or VIN, these reports provide numerous valuable details such as proof of mileage as well as whether the car was ever declared to be a total loss by an insurance company. Pre-owned certified if you’re still concerned 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’ll still save money by buying an older car, but also gain additional assurance of the quality of the vehicle. Certified pre-owned — or CPO programs differ between manufacturers. The basic concept is that CPO cars are ones that meet a manufacturer’s established standards and come with a form of guarantee against defects, similar to a warranty for new cars. For this, you must check dealership inventories for the CPO car you’re looking for. Every dealership uses its own language in relation to used choices, so make sure to research online prior to visiting the showroom. Many of these models also come with additional warranties, so check the coverage to understand what it covers. The next step is to purchase a used vehicle is a fantastic option to get behind the wheel without spending as much as you would for a new vehicle. You will be met with less depreciation on your vehicle and pay less on registration and insurance and still have assurance that your car is in good condition. If you are looking to finance a car that is used ensure that you check for the latest rates to ensure that you’re getting the most favorable price available. That’s what financing can bring. More SHARE with Leanr:
The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the details of taking out loans to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain the confidence to control their finances through providing precise, well-researched and informative details that cut complex topics into manageable bites.
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