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 decisions by offering you interactive tools and financial calculators that provide objective and unique content. We also allow users to conduct research and compare information for free – so that you can make informed financial decisions. Bankrate has partnerships with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The products that appear on this website come from companies that pay us. This compensation can affect the way and where products appear on the site, such as for instance, the sequence in which they appear in the listing categories in the event that they are not permitted by law. This applies to our mortgage or home equity products, as well as other products for home loans. This compensation, however, does affect the information we publish, or the reviews that you see on this site. We do not contain the vast array of companies or financial offers that may be accessible to you. SHARE Barry Austin Photography/Getty Images
4 minutes read. published March 02, 2023.
Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is an expert with the details of borrowing money to purchase 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 dedicated to helping readers gain the confidence to control their finances with concise, well-researched and well-organized information that breaks down otherwise complex topics into manageable bites. The Bankrate promise
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This compensation could influence the manner, place and when products are listed and categories, unless it is prohibited by law. This is the case for our mortgage or home equity, and other home lending products. Other elements, like our own website rules and whether the product is available in your area or at your own personal credit score can also impact how and where products appear on this website. We strive to offer the most diverse selection of products, Bankrate does not include the details of every credit or financial item or product. The option of buying a used car instead of the purchase of a brand new car is a good option for many motorists. As rates within the U.S. soar to record huge numbers, Americans are seeing its impacts at the grocery store checkout as well as at the . And with the new vehicle costing close to $47,000 as of early 2022 as per Kelley Blue Book this might be the perfect time to save some money and purchase a used . Buying used will save you money Going for a used car rather than a new one can make a huge difference in a variety of ways. A used vehicle will cost less based on price on the sticker alone, however, that’s not where the savings end. You will also be reaching for your wallet lower than if you were driving an entirely new vehicle in terms of fees such as insurance, vehicle depreciation and other fees. The 4th quarter in 2022 for a used vehicle is $526. Those who finance a brand new car paid $716, according to . Saving over $180 a month adds up quickly and you could save thousands of dollars by purchasing an older vehicle instead of a new one. Although paying a cheaper cost for the same vehicle model from an earlier year is the most obvious reason to purchase an used car, there are others too. Five benefits of buying used Not all used cars aren’t made equal. It is important to determine whether a vehicle you’re considering buying can be considered in decent or poor shape. With that in mind , here are five of the best advantages of buying a secondhand car. 1. A lower depreciation rate for vehicles is a fact of the road, but an older vehicle has less depreciation than a new vehicle. New cars generally depreciate around 20 percent when they are removed from the dealership. And most cars will be lost 10 percent in value within the initial year. It’s a loss of 30 percent in the first one-year period of ownership. The value of a used car decreases at a much slower rate than a new vehicle. This is because when you’re driving of the vehicle, it’ll have already undergone its major depreciation. Brand new vehicles depreciate at the moment they leave the showroom, but a used vehicle equals slower depreciation and this means that you’ll have a higher stability for your loan-to-value ratio. 2. Costs for insurance are lower. They depend on your age, driving record and credit score, mileage and your location. Typically — just as the vehicle will cost less, the insurance cost for a used car is typically lower than that of a brand-new vehicle. One of the main factors in determining the the value 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 then you may want to consider liability only if your state allows it, versus adding collision and comprehensive insurance if your vehicle is more modern. Insurance rates aren’t always uniform, so to save money be certain to research your expected auto insurance cost before leaving the dealership. 3. Lower dealership costs Just as insurance rates differ by zip code, the charges that are associated with a used car aren’t equally across the 50 states. But they are less expensive than the costs associated with a new vehicle due to the fact that the cost to purchase the automobile is much lower in the beginning. This is particularly true for any sales tax that you might be required to pay. In order to prepare for the extra charges that are associated with using the state DMV website for specifics regarding title tax and registration fees as well as documentation fees. 4. More bang for your buck The ability to stretch your budget for car purchases is another major benefit when you buy used cars. You can save money by buying used instead of new. If you’re at a high-end car but you’re not able to afford this year’s model, but one that is two or three years old could better fit your budget. It is also important to think about the fact that car manufacturers are no longer redesigning their models every year, meaning that the technology and style differences may be less apparent. Calculate these potential savings and compare which best suits your needs with the help of . 5. More peace of mind In the past, driving used cars carried a stigma and many drivers saw it as a danger however, the accessibility of car histories has changed the landscape. The drivers now have access to information about a car’s ownership as well as the history of accidents as well as status on the title, mileage, and more. Before signing off on a used vehicle take advantage of websites such as Carfax and AutoCheck to view the history report for the vehicle. Based on the vehicle’s identification number, or VIN, these reports provide numerous valuable details including verification of the mileage and whether the vehicle was ever declared a total damage by an insurer. A certified pre-owned vehicle is an option if you’re still concerned about potential hidden problems in a used vehicle buying a certified pre-owned vehicle could be the right choice for you. It will save you money by buying a used car but you will also have more confidence in the security of the vehicle. Certified pre-owned — or CPO programs differ between manufacturers. In essence, CPO cars are ones that meet a manufacturer’s established standards and carry some form of guarantee against defects similar to a warranty for new cars. To find out more, look through inventory at the dealership for the CPO car you’re looking for. Each dealership has its own terminology when it comes to pre-owned options so be certain to do some research before visiting the showroom. Many of these models also include additional warranties, so make sure to check the duration of this assurance to find out what it covers. The next step is to purchase a used vehicle is a fantastic option to get behind the wheel without shelling out more than you would for a brand new car. You will be met with less vehicle depreciation and spend less on registration and insurance while still having confidence that your vehicle is in good condition. When it is time to finance a used car ensure that you check for current rates so that you can be sure you’re getting the best price available. This is what financing will give. Leanr SHARE more:
Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ins and outs of securely taking out loans to purchase an automobile. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to take control of their finances through providing concise, well-studied details that cut otherwise complex topics into manageable bites.
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