By Shannon Sanford
When it comes time to purchase another car, you must make the choice between new or used. This difficult question may make you wonder what you would be gaining by buying a used car. To help you better understand why a used car is better, here are nine advantages of buying a used car instead of a new car.
It's no surprise that the price of a used car is generally going to be much cheaper than the price of a new car. Many used vehicles are going to be low-priced, with some even less than five digits. You could pay as low as $1,000 to $9,000 depending on the year, make, and model of vehicle you are looking for. You can potentially save as much as 30% by looking at some of the older versions of your favorite make and model.
Shorter Loan Terms
When you purchase a used or pre-owned vehicle from a dealer, you'll typically get a shorter loan term with less interest. Overall, it's a much better situation for you as the purchaser. You can even negotiate that the dealer pays the sales tax in some instances. It's a win/win.
One of the reasons that used cars are still on the road is that they are reliable. A new car may have several issues with it. There may be recalls on the vehicle, which can be life-threatening. Buying new leaves you to deal with these problems while buying used may avoid it all together.
Avoid Massive Depreciation
When you buy a new car, the depreciation will inevitably take a huge hit as soon as you drive it off the lot. But by buying used, you avoid this altogether. The original owner has taken the original depreciation hit. This is not to say that you won't experience any depreciation; every car deals with this over the years in some capacity. However, buying used means that you'll take a much lighter hit comparatively.
Fewer Sales Tax
The sales tax on new cars is outrageous. This is mostly because the price is so high. Exact sales tax is different for every state but it is generally calculated at 10% of the car's sale price. 10% of a $2,000 used vehicle will be a lot lower than 10% of a $20,000 new vehicle.
If you ever want to add new or upgraded features to your used car, such as a new radio or new upholstery, it'll generally be a lot cheaper than if it was a new car. New cars usually require parts that need to be purchased directly from the manufacturer, which can easily drive up the price. With used cars, you can put in new features for a lot less than you'd spend otherwise.
Lower Insurance Rates
Insurance is something that we pay every month, so it makes sense that you'd want this bill to be as low as possible. If you're buying a new car, your insurance rate can double in price. It could realistically increase from $100 to $200 just because you decided to purchase a new car. Used cars may also raise your insurance rates, but it could potentially be lower depending on what car you had previously.
When you purchase a new car, you're limited to what is left. On the other hand, there are hundreds of thousands of used cars on the market every day. At dealerships, there are an endless amount of used cars that are being traded in constantly. Generally, dealerships will get their new cars at the beginning of the year, and that's just what they have. With used cars, you can choose based on features, make, model, year, color, and more.
If you have a used car, parts will be abundantly available. If you ever have to replace a part, most mechanics can find parts for a lot cheaper than new cars. New cars require special parts that have to come straight from the manufacturer, which means they will cost more money.