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 tools and financial calculators as well as publishing objective and original content. We also allow users to conduct research and evaluate information for no cost – so that you can make informed financial decisions. Bankrate has agreements 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 compensate us. This compensation could affect how and where products are displayed on the site, such as such things as the order in which they appear in the listing categories in the event that they are not permitted by law for our mortgage, home equity and other home lending products. But this compensation does affect the content we publish or the reviews you see on this site. We do not cover the entire universe of businesses or financial deals that could be accessible to you. Share: Barry Austin Photography/Getty Images
4 min read Published 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 understanding the details of borrowing money to buy cars. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to manage their finances through providing precise, well-studied information that breaks down complex topics into manageable bites. The Bankrate promise
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So, this compensation can influence the manner, place and in what order items appear in listing categories in the event that they are not permitted by law for our mortgage, home equity and other home lending products. Other elements, like our own rules for our website and whether the product is available in the area you reside in or is within your own personal credit score may also influence how and where products appear on this website. Although we try to offer an array of offers, Bankrate does not include details about each credit or financial item or product. Purchasing a used car over an entirely new one is an excellent alternative for many drivers. As the rates in the U.S. soar to record high numbers, Americans are seeing its consequences at the supermarket checkout and at the . Also, with new vehicle costing close to $47,000 as of early 2022 as per Kelley Blue Book, now might be the perfect moment to save some cash and buy used . A used car can save you money Buying a used car rather than a new one can save you big bucks in many ways. A used vehicle will cost less based on cost of the sticker — however, that’s not where the savings stop. Additionally, you’ll be reaching to your wallet less than if you drove an entirely new vehicle with regards to fees, insurance and vehicle depreciation. The in the Fourth Quarter of 2022, the cost for a used car is $526. Drivers financing a new vehicle paid $716, as per . The savings of more than $180 per month adds up quickly and you could save thousands of dollars by choosing an used vehicle over a new one. Although paying a cheaper purchase price for the same model that is from different year is an obvious motive to buy an used car There are other benefits too. 5 advantages to buying used There are many reasons to buy used. Not all used cars are identical. It is important to determine whether a car you are considering purchasing has a good condition or poor shape. With that caveat , here are five great reasons to buy a used car. 1. Depreciation of vehicles is a fact of the road, but a used vehicle offers much less depreciation than a new vehicle. New cars typically depreciate about 20 percent when they are taken off the lot. The majority of cars be lost 10 percent in value during the initial year. It’s a loss of 30 percent within the first one-year period of ownership. The value of a used car decreases at a lower rate than a brand new one. This is because when you’re 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 However, a used car equals slower depreciation and this means that you’ll have a higher stability for your loan-to-value ratio. 2. Lower costs for insurance differ based on experience with driving, your age and rating on your credit, the mileage and your location. In general — since the car is less, insurance for a used car will be less expensive than the cost of a brand new car. The most important factor to consider when deciding the is the value of the vehicle. Because it is less expensive than a more modern version, the cost of insurance should be less. In terms of recommended coverage If your car is older , you might be able to think about liability if your state allows it, as opposed to adding collision and comprehensive coverage when your vehicle is newer. Insurance rates aren’t always uniform, so to save money be certain to research your expected auto insurance cost prior to leaving the dealership. 3. Lower dealer fees As insurance varies by ZIP code, the expected charges that are associated with a used car are not equal across the 50 states. However, they are much less than those associated with a new vehicle since the price to purchase the automobile is less in the first place. This is especially true for the sales tax you may have to pay. To prepare for the additional charges that are associated with using the state DMV website for more information on title tax and registration fees and documentation fees. 4. More bang for your buck The ability to stretch your budget for car purchases is another major benefit that comes with buying used cars. You can get more cars by buying second-hand rather than new. If you’re at a high-end car however, you might not be able to afford this year’s model. However, one that’s two or three years old could better fit your budget. It’s also important to consider the fact that carmakers do not have to redesign their vehicles every year, which means that the technological and design changes may not be as noticeable. Consider these savings potential and compare which is the best for you using a . 5. A greater sense of security the past, driving used vehicles was frowned upon and many drivers saw it as a threat However, the availability of car history reports has altered the landscape. Drivers can now access information regarding the car’s owner, accident history, title status, mileage and much more. Before signing off on the purchase of a second-hand vehicle, make use of the services offered by websites such as Carfax as well as AutoCheck to view the history report on the vehicle. Based on the car’s vehicle identification number, also known as a VIN, these reports offer an array of valuable information including verification of mileage of the vehicle and whether it was ever declared a complete damage by an insurer. Certified pre-owned option If you’re still concerned about hidden issues that could be present on a vehicle you’ve used before buying a certified pre-owned vehicle could be the best option for you. It will save you money by buying a used car but gain additional assurance of the quality of the car. Certified pre-owned — also known as CPO — programs differ from manufacturer to manufacturer. In essence, CPO automobiles are those that are in compliance with a manufacturer’s standards and have some type of warranty against defects, similar to a warranty for new cars. For this, you must check inventory at the dealership for the CPO vehicle you are looking for. Each dealership has its own lingo when it comes to pre-owned alternatives, so be certain to do some research before heading to the showroom. A majority of these cars come with additional warranties, so check the duration of this assurance to find out the scope of. The next step is to purchase a used vehicle is a great opportunity to get behind the wheel without shelling out the same amount as you would for a new car. You’ll be rewarded with less vehicle depreciation and spend less on insurance and registration and still have peace of mind that your car is in good condition. If you are looking to finance a car that is used, be sure to check current so you know you’re getting the best deal possible. That’s what financing can give. Leanr more SHARE:
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 ins and outs of securely taking out loans 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 dedicated to helping readers gain the confidence to take control of their finances with concise, well-studied facts that break down otherwise complicated subjects into bite-sized pieces.
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