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 smarter financial decisions by offering you interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct your own research and compare data for free to help you make sound financial decisions. Bankrate has partnerships with issuers such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The deals that are advertised on this website are provided by companies that pay us. This compensation may impact how and where products are displayed on this site, including such things as the order in which they may appear within the listing categories, except where prohibited by law. Our mortgage home equity, mortgage and other home loan products. However, this compensation will not influence the information we provide, or the reviews that appear on this website. We do not include the vast array of companies or financial offers that may be accessible to you. Share: Barry Austin Photography/Getty Images
4 minutes read Read Published March 02, 2023
Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is an expert in understanding the ways and pitfalls of borrowing money to purchase an automobile. 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 by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. The Bankrate guarantee
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We receive compensation for placement of sponsored products and, services, or through you clicking certain hyperlinks on our website. Therefore, this compensation may impact how, where and in what order items appear within listing categories in the event that they are not permitted by law for our mortgage, home equity and other home loan products. Other elements, like our own proprietary website rules and whether a product is available in the area you reside in or is within your self-selected credit score range may also influence the manner in which products are featured on this site. While we strive to provide a wide range offers, Bankrate does not include the details of every credit or financial item or product. A used car purchase over an entirely new one is an excellent alternative for many drivers. As rates within the U.S. soar to record high numbers, Americans are seeing its effects at the grocery store checkout and at the . Also, with new vehicle costing close to $47,000 by the time 2022 begins, according to Kelley Blue Book it might be the perfect opportunity to save money and purchase a used . Buy used and save money Buying a used vehicle instead of a brand new one can help you save money in many ways. The cost of a used car is less on the basis of price on the sticker alone, but that’s not where your savings end. It will also mean that you’ll reach for your wallet smaller than you would if you owned an entirely new vehicle with regards to fees such as insurance, vehicle depreciation and other fees. The fourth quarter of 2022, the cost for a used car is $526. Drivers purchasing a brand-new car pay $716 according to . Saving over $180 a month adds up quickly and you could end up saving thousands of dollars by choosing an older vehicle instead of a new one. While paying a lower cost for the same model that is from different year is an obvious reason to buy used cars but there are other reasons too. 5 advantages to buying used There are many reasons to buy used. Not all used cars are made equal. It is essential to know whether a vehicle you’re considering buying can be considered in decent or bad condition. With that caveat , here five top reasons to buy a used car. 1. Depreciation of vehicles is a fact of driving, but an used car has less value than a brand-new vehicle. New cars typically depreciate about 20% when taken off the lot. And most cars will lose another 10 percent in value in the initial year. It’s a loss of 30 percent within the initial year of ownership. A used vehicle depreciates at a much slower rate than a brand new one. This is because once you’re behind the wheel of the vehicle, it will already have experienced the major depreciation. New cars appreciate the moment they leave the showroom, but a used vehicle is more depreciated so you’ll be able to have a more stable loan-to-value ratio. 2. Lower costs for insurance depend on your age, driving record and credit score, mileage and your location. In general — because the car will cost less, insurance for a used car tends to be lower than the cost of a brand new car. A key factor in determining the value is the worth of the car. Since a car is more expensive than a modern version, the cost of insurance is likely to be lower. Regarding the recommended coverage for your vehicle, if it is older then you may be able to think about liability in the event that your state permits it, as opposed to adding collision and comprehensive coverage when your car is more recent. Insurance rates aren’t always consistent so to save money, be certain to research your expected auto insurance cost prior to leaving the lot of the dealer. 3. Lower dealership costs Just as insurance rates differ by zip code, the anticipated costs associated with your used car are not equally across all 50 states. But they are less expensive than those for a brand new car due to the fact that the cost for the car is less in the first place. This is especially true of any sales tax that you could 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 as well as documentation fees. 4. More bang for your buck The ability to stretch your budget for car purchases is another benefit when you buy a used car. You can save money by purchasing used rather than new. If you have your sights for a luxurious car but you’re not able to afford this year’s model, but one that’s 2 or 3 years old may be more suitable for your budget. It’s also important to consider the fact that carmakers have stopped re-designing their vehicles each year, which means that the technological and style differences may not be as noticeable. Consider these savings potential and compare which is the best for you using an . 5. A greater sense of security the past, using used cars carried a stigma and many people saw it as a threat However, the availability of vehicle history reports has changed the perception. Drivers can now access information regarding the car’s owner and accident history and title status, mileage and much more. Before approving an used car, take advantage of websites such as Carfax or AutoCheck to see history reports of the car. Based on the car’s vehicle identification number, also known as a VIN. These reports provide an array of valuable information such as proof of mileage of the vehicle and whether it was ever declared a total loss by an insurance company. Pre-owned certified if you’re still concerned about potential hidden problems in an older vehicle buying a certified pre-owned vehicle could be a great option for you. You will still save money when you purchase an older car, but also increase your confidence in the reliability of the vehicle. Certified pre-owned or CPO — programs vary between manufacturers. The basic concept is that CPO automobiles are those that meet a manufacturer’s established standards and come with a form of warranty against defects, similar to a new-car warranty. To find out more, look through the inventory of the dealership for the CPO vehicle you are looking for. Each dealership has its own lingo for pre-owned choices, so make certain to do some research before going to the showroom. A majority of these cars come with additional warranties, so check the length of that assurance to find out what it covers. Following steps: Buying a secondhand vehicle is a great option to drive without having to pay as much as you would on a brand new car. You’ll experience less vehicle depreciation and spend less on insurance and registration but still be in confidence that your car is in great condition. When it is time to finance a car that is used ensure that you check current so you know you’re getting the best deal available. That’s what financing can provide. More SHARE with Leanr:
This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ways and pitfalls of taking out loans to purchase cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are enthusiastic about helping readers gain confidence to take control of their finances with precise, well-researched and informative information that breaks down complex topics into manageable bites.
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