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 smarter financial decisions by offering you interactive financial calculators and tools that provide objective and unique content. We also allow you to conduct research and evaluate information for no cost to help you make financial decisions with confidence. Bankrate has partnerships with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are advertised on this website come from companies who pay us. This compensation could affect how and where products are displayed on this site, including for instance, the order in which they may appear within the listing categories, except where prohibited by law. Our mortgage, home equity and other home loan products. This compensation, however, does not influence the information we publish, or the reviews that appear on this website. We do not contain the vast array of companies or financial offers that may be available to you. Share: Barry Austin Photography/Getty Images
4 min read published March 02, 2023.
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is an expert in navigating the details of borrowing money to buy cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain the confidence to manage their finances with precise, well-studied information that breaks down complex topics into manageable bites. The Bankrate promise
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We are compensated for placement of sponsored products and, services, or by you clicking on certain hyperlinks on our website. So, this compensation can impact how, where and in what order items are listed, except where prohibited by law. This is the case for our mortgage and home equity products, as well as other products for home loans. Other factors, such as our own rules for our website and whether or not a product is available within your area or at your own personal credit score can also impact the manner in which products are featured on this site. While we strive to provide an array of offers, Bankrate does not include information about every credit or financial item or product. Purchasing a used car over the purchase of a brand new car is an excellent option for many drivers. As rates within the U.S. soar to record levels, Americans are seeing its effects at the grocery store checkout and at the . Also, with new vehicle costs averaging close to $47,000 in early 2022, as per Kelley Blue Book, now might be the perfect time to save some money and buy used . Buying used will save you money Going for a used vehicle instead of a brand new one could make a huge difference in many ways. The cost of a used car is less on the basis of sticker price alone — but that’s not where the savings end. It will also mean that you’ll reach to your wallet lower than if you were driving the brand new car with regards to fees, insurance and vehicle depreciation. The 4th quarter in 2022, the cost for an used car is $526. Those purchasing a brand-new car pay $716, as per . The savings of more than $180 per month adds up quickly, and you could save thousands by going for a used car over an entirely new one. Although paying a cheaper purchase price for the same car model from an earlier year is the most obvious reason to purchase a used car but there are other reasons also. Five benefits of buying used Not all used cars aren’t identical. It is important to determine whether a vehicle you’re considering buying can be considered in decent or bad shape. With that caveat below are five great motives to purchase a used vehicle. 1. Less vehicle depreciation Vehicle is a fact of daily driving, however an used car has lower depreciation than a brand new vehicle. New cars typically depreciate about 20 percent after they’ve been driven off the lot. The majority of cars be lost 10 percent in value within the first year. This is a loss of 30 percent in the initial year of ownership. The value of a used car decreases in a slower manner as a brand new car. This is because when you’re behind the wheel of the vehicle, it’ll have already experienced its significant depreciation. Brand new vehicles depreciate at when they leave the dealership However, a used car equals slower depreciation and this means that you’ll have a an increased stability in the ratio of loan to value. 2. Costs for insurance are lower. They vary based on your experience with driving, your age as well as your credit score, mileage, and the location. Typically — just since the car is less — insurance for a used car tends to be lower than the cost of a brand new car. One of the main factors in determining the is the value of the vehicle. Because a than a newer 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, versus adding collision and comprehensive insurance if your vehicle is newer. But insurance rates are not always consistent so to save money, be sure to and research the estimated cost of your auto insurance prior to leaving the dealership. 3. Lower dealer fees As insurance prices differ by ZIP code, the anticipated costs associated with your used car aren’t equal across all 50 states. But they are less expensive than those that are associated with new vehicles due to the fact that the cost of the vehicle is less in the beginning. This is particularly true for any sales tax you could be required to pay. In order to prepare for the extra charges that are associated with using to purchase a vehicle, visit your state’s DMV website for more information on title tax and registration fees and fees for documentation. 4. You get more value for your money The ability to stretch your budget for car purchases is another major benefit of buying used cars. You can save money by buying second-hand rather than new. If you have your sights at a high-end car but you’re not able to afford this year’s model. However, one that is two or three years old might be more appropriate for your budget. It’s also important to consider the fact that carmakers do not have to redesign their models every year, so the tech and style differences may be less apparent. Estimate the savings you could save and even compare which is the best for you using a . 5. Peace of mind the past, driving used vehicles was frowned upon and many drivers viewed it as a danger however, the accessibility of vehicle history reports has changed the perception. Drivers can now access information about the vehicle’s ownership history and accident history, the status of the title, mileage, and much more. Before approving a used vehicle take advantage of the services offered by websites such as Carfax and AutoCheck to see history reports on the vehicle. Based on the vehicle’s identification number, or VIN, these reports provide numerous valuable details including verification of mileage of the vehicle and whether it was ever declared to be a total lost by an insurance firm. A certified pre-owned vehicle is an option if you are still worried about the possibility of hidden issues on a vehicle you’ve used before, purchasing certified pre-owned might be a great option for you. You’ll still save money when you purchase an used vehicle, but you will increase your confidence in the reliability of the vehicle. Certified pre-owned — also known as CPO — programs differ from manufacturer to manufacturer. In essence, CPO automobiles are those that meet a manufacturer’s established standards and have some type of guarantee against defects, like a brand-new car warranty. To do this, check the inventory of the dealership for the CPO vehicle you’re searching for. Each dealership has its own language 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 check the length of that warranty to know the scope of. Following steps: Buying a secondhand vehicle is an excellent option to get behind the wheel without shelling out more than you would for a new vehicle. You’ll experience less vehicle depreciation and spend less on registration and insurance while still having confidence that your vehicle is in great condition. If you are looking to finance a used vehicle, be sure to check for the latest rates to ensure you are getting the best price available. This is what financing will give. More SHARE with Leanr:
The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely taking out loans to purchase a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain the confidence to take control of their finances with clear, well-researched details that cut complicated topics into digestible pieces.
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