Buying a used car instead of a new one can save you a lot of money. The average price of a new car is $36,402. By comparison, the average price of a used car sold by a new-vehicle dealership was just $20,835 [1]. And that figure is probably even lower if you take into account used cars sold through private parties and independent lots.
But a lower purchase price isn’t the only thing used cars have going for them. Buying a pre-owned ride can be beneficial in other ways, as well.
The often-overlooked benefits of buying a used car
There are several often-overlooked benefits associated with purchasing a used car. Here are some of the most significant perks.
Note: The following is for informational purposes only and should not be treated as a substitute for professional financial advice.
- Lower insurance rates
Used cars typically cost less to insure than new cars. The cost of comprehensive insurance, which covers the vehicle in the case of an accident, is primarily based on the car’s value. Because a new car is worth more than a used one of the same make and model, new vehicle insurance rates are higher.
- Less chance of getting into debt
Just 18% of Americans can afford the cost of a new car [2]. And that’s part of the reason why U.S. consumers have around 1.3 trillion dollars in car debt [4]. When you buy a used vehicle, you start with a smaller purchase price. That means there’s less of a chance you’ll get in over your head in debt.
- Reduced depreciation
A new car begins to depreciate as soon as you take ownership. Within the first year, you can expect a car’s value to drop by 20% to 30% [3]. When you buy used, however, you let someone else take that initial hit in depreciation.
- You can get more bang for your buck
While you may not be able to afford your dream car brand new, there’s a possibility that, if you buy used, the same make and model will fit into your budget. After all, someone else has already paid the car’s initial depreciation costs. And that means, typically, you get more bang for your buck when buying used.
- Lower sales tax and no hidden fees
New cars are generally more expensive than used cars. And that means, with a new vehicle, you’ll end up paying more sales tax. Dealerships also have a bunch of hidden fees you can avoid by buying used.
- You can relax more
With a flawless new car, you have to worry about getting scratches and dents. Used cars, on the other hand, usually come with at least a couple of minor cosmetic defects. So, you can relax knowing you’re not the first one to curb a wheel or get a door ding.
- Late-model used cars are generally very reliable
A few decades ago, a car that lasted 100,000 miles was considered an anomaly. But, thanks to modern technology, today’s vehicles often last well over 200,000 miles. So, if you buy a late-model used car, chances are, it will have plenty of life left.
You can alleviate the stress of buying used with a pre-purchase inspection
Aside from the well-being perks described above, you can purchase that used car without spiking your blood pressure.
POMCAR is a veteran-owned-and-operated nationwide provider of used vehicle pre purchase inspections. PPIs are all we do. We have an extensive network of qualified technicians ready to perform a 270-point inspection and deliver a meaningful report. Check us out at www.pomcar.com
Sources:
- https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474855962
- https://www.wsj.com/articles/the-seven-year-auto-loan-americas-middle-class-cant-afford-their-cars-11569941215
- https://www.nerdwallet.com/blog/insurance/car-insurance-basics/car-depreciation/
- https://www.forbes.com/sites/mayrarodriguezvalladares/2019/05/01/as-auto-lending-delinquencies-rise-discrimination-is-even-more-dangerous-to-the-economy/#2733dd2070e3