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 offering you interactive tools and financial calculators, publishing original and objective content. We also allow you to conduct your own research and evaluate information for no cost – so that you can make informed financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The offers that appear on this website come from companies that pay us. This compensation could affect how and when products are featured on this website, for example, for example, the sequence in which they appear within the listing categories, except where prohibited by law. This applies to our mortgage home equity, mortgage and other products for home loans. This compensation, however, does affect the content we publish or the reviews that you see on this site. We do not contain the universe of companies or financial deals that could be open to you. SHARE Barry Austin Photography/Getty Images
4 minutes read. Published March 02, 2023
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in understanding the ways and pitfalls of borrowing money to buy a car. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain confidence to manage their finances by providing concise, well-researched and well-organized information that breaks down complicated topics into bite-sized pieces. The Bankrate promise
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We are compensated in exchange for the promotion of sponsored goods and services, or when you click on specific links on our site. This compensation could influence the manner, place and in what order items appear in listing categories and categories, unless it is prohibited by law. We also offer mortgage or home equity, and other home lending products. Other elements, like our own website rules and whether or not a product is available within the area you reside in or is within your personal credit score could also affect how and where products appear on this website. Although we try to offer a wide range offers, Bankrate does not include the details of each credit or financial item or product. A used car purchase over an entirely new one is a good alternative for many drivers. As the rates of inflation in the U.S. soar to record high numbers, Americans are seeing its impacts at the grocery store check-out and in the . And with the new vehicle costs averaging close to $47,000 in early 2022, according to Kelley Blue Book now might be the perfect moment to save some cash and purchase a used . Buying used will save you money Buying a used car rather than a new one can save you big bucks in several ways. A used car will cost less based on price on the sticker alone, but that’s not where your savings end. Additionally, you’ll be reaching for your wallet smaller than you would if you owned a brand-new vehicle in terms of fees including insurance, depreciation of the vehicle and insurance. In the fourth quarter of 2022, the cost for a used car is $526. Drivers who finance a brand new car paid $716 according to . The savings of more than $180 per month can add up quickly and you could end up saving thousands by going for an older vehicle instead of a new one. Although paying a cheaper cost of purchase for the same car model of different year is an obvious motive to buy an used car, there are others too. Five benefits of buying used Not all used cars aren’t identical. It is important to determine whether a vehicle you’re considering buying has a good condition or poor shape. With that caveat below are five great reasons to buy a used vehicle. 1. Less vehicle depreciation Vehicle is a fact of daily driving, however a used vehicle offers much less depreciation than a new vehicle. New cars generally depreciate around 20 percent when they are driven off the lot. The majority of cars lose another 10 percent in value within the first year. This is a loss of 30 percent during the first calendar year. The value of a used car decreases at a much slower rate as a brand new car. This is because when you’re behind the wheel of the vehicle, it’ll already have experienced the major depreciation. Brand new vehicles depreciate at as soon as they leave the dealership, but a used vehicle has a slower rate of depreciation so you’ll be able to have higher stability for your loan-to-value ratio. 2. Lower insurance costs Insurance costs depend on your age, driving record, the credit score of your,, and the location. In general — because the car will cost less, insurance for a used vehicle tends to be lower than that of a brand-new car. A key factor in determining the the value of the vehicle. Because it is less expensive than a more modern version, the price of insurance will be lower. In terms of recommended coverage If your car is old, then you may be able to think about liability in the event that your state permits it, and not add collision and comprehensive insurance if your vehicle is newer. Insurance rates aren’t always consistent so to save money, make certain to investigate the estimated cost of your auto insurance before leaving the dealership lot. 3. Lower dealership costs Just as insurance prices differ by ZIP code, the fees that come with your used car aren’t identical across the 50 states. But they are less expensive than the fees for a brand new car since the price of the vehicle is lower than the cost of the vehicle in the first place. This is especially true of any sales tax you may have to pay. In order to prepare for the extra costs associated with the use of to purchase a vehicle, visit your state’s DMV site for details on the title tax, registration fees and documentation fees. 4. A lot more bang for your buck The ability to stretch your budget for car purchases is another benefit that comes with buying used cars. You can get more cars by buying used instead of new. If you have your sights set on a luxury vehicle however, you might not be able to afford this year’s model, but one that is 2 or 3 years old may be more suitable for your budget. It’s also important to consider the fact that automakers have stopped re-designing their vehicles each year, meaning that the technology and design changes may be less apparent. Calculate these potential savings and even compare which best suits your needs with a . 5. More peace of mind In the past, buying used vehicles was frowned upon and many people saw it as a threat However, the availability of vehicle histories has changed this landscape. Drivers can now access information about the vehicle’s ownership history, accident history and the status of the title, mileage, and much more. Before approving the purchase of a second-hand vehicle, make use of offerings from websites like Carfax as well as AutoCheck to view the history report for the vehicle. Based on the car’s vehicle identification number, or VIN. These reports provide an array of valuable information such as proof of mileage as well as whether the car was ever declared a complete loss by an insurance company. Pre-owned certified if you’re still concerned about hidden issues that could be present in an older vehicle buying a certified pre-owned vehicle could be the right choice for you. You will still save money by purchasing an used vehicle, but you will gain additional confidence in the reliability of the vehicle. Certified pre-owned — or CPO programs differ from one manufacturer to the next. In essence, CPO automobiles are those that conform to a manufacturer’s standards and come with a form of guarantee against defects, like a brand-new car warranty. For this, you must check dealership inventories for the CPO car you’re looking for. Each dealership has its own lingo in relation to used choices, so make sure to explore online before visiting the showroom. Many of these models also come with additional warranties. Make sure you check the length of that warranty to know the scope of. Next steps Buying a used vehicle is an excellent opportunity to take the wheel without shelling out more than you would for a new car. You will be met with lower depreciation costs and less on insurance and registration but still be in assurance that your vehicle is in good working order. If you are looking to finance a used car, be sure to check for current rates so that you can be sure you’re getting the best deal available. And to that financing will give. Leanr more SHARE:
Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the ways and pitfalls of borrowing money to buy cars. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are enthusiastic about helping readers gain the confidence to manage their finances through providing clear, well-researched information that breaks down complicated subjects into bite-sized pieces.
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