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 better financial decisions by providing you with 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 to help you make sound 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 Profit The products that appear on this website are provided by companies who pay us. This compensation could affect how and where products appear on this site, including, for example, the order in which they appear in the listing categories and other categories, unless prohibited by law. This applies to our mortgage or home equity products, as well as other home loan products. This compensation, however, does not influence the content we publish or the reviews you read on this site. We do not include the vast array of companies or financial deals that could be accessible to you. SHARE: Barry Austin Photography/Getty Images
4 min read Published March 02, 2023
Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in understanding 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 editing and writing for Bankrate since late 2021. They are passionate about helping readers gain 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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Therefore, this compensation may affect the way, location and in what order items appear in listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, like our own website rules and whether the product is available within your area or at your personal credit score may also influence 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 financial or credit item or product. The option of buying a used car instead of a new vehicle is a good alternative for many drivers. While rates within the U.S. soar to record huge numbers, Americans are seeing its impacts at the grocery store checkout and at the . And with the new vehicle costs averaging close to $47,000 in early 2022, as per Kelley Blue Book, now might be the perfect moment to save some cash and purchase a used . A used car can save you money Going for a used car rather than a new one could help you save money in several ways. A used vehicle will cost less based on sticker price alone -- but that's not where your savings stop. Additionally, you'll be reaching for your wallet less than if you drove an entirely new vehicle in terms of fees, insurance and vehicle depreciation. In the Fourth Quarter of 2022 for a used vehicle is $526. Drivers who finance a brand new car paid $716 according to . The savings of more than $180 per month adds up quickly, and you could end up saving thousands of dollars by purchasing a used car over an entirely new one. Although paying a cheaper cost for the same model of different year is an obvious reason to buy used cars but there are other reasons also. 5 advantages to buying used There are many reasons to buy used. Not all used cars are created equal. It is important to determine if a used car is in good or bad condition. In that regard , here five top motives to purchase a used car. 1. Depreciation of vehicles is a inescapable fact of the road, but a used vehicle offers much less value than a brand-new vehicle. New cars generally depreciate around 20% when driven off the lot. Most cars will be lost 10 percent in value during the first year. This is a loss of 30 percent within the first one-year period of ownership. A used vehicle depreciates at a much slower rate as a brand new car. This is due to the fact that once you're driving of the vehicle, it will have already undergone its major depreciation. New cars appreciate the moment they leave the lot However, a used car is more depreciated and this means that you'll have a a more stable loan-to-value ratio. 2. Costs for insurance are lower. They depend on your age, driving history, rating on your credit, the mileage and the location. The majority of the time -- and just since the car is less, the insurance cost for used vehicles is typically lower than that of a new vehicle. The most important factor to consider when deciding the the value of the vehicle. Because a than a newer version, the price of insurance should be less. For coverage recommendations 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 insurance if your car is more recent. However, insurance rates aren't always the same, so in order to save money, be certain to research the estimated cost of your auto insurance before driving off the dealership lot. 3. Lower dealer fees As insurance rates differ by zip code, the anticipated costs associated with your used car are not equal across the 50 states. But they are less expensive than the costs associated with a new vehicle because the cost of the vehicle is much lower in the first place. This is particularly true for the sales tax you could be required to pay. In order to prepare for the extra charges that are associated with using the state DMV site for details on the registration fee and title tax and fees for documentation. 4. You get more value for your money Making the most of your car purchase is another advantage of buying an used vehicle. You can get more cars by buying used instead of new. If you're set on a luxury vehicle but you're not able to afford this year's model, but one that is two or three years old could better fit your budget. It's also important to consider the fact that automakers have stopped re-designing their models every year, which means that the technological and style differences may not be as noticeable. Estimate the savings you could save and then compare which one is right for you with an . 5. Peace of mind the past, using used vehicles was viewed as a risk and many drivers saw it as a threat, but the availability of vehicle histories has changed the landscape. Drivers now can see details about a car's ownership as well as the history of accidents and title status, mileage and more. Before approving an used car, take advantage of the services offered by websites such as Carfax as well as AutoCheck to view the history report of the car. Based on the car's vehicle identification number, or VIN. These reports give various valuable information including verification of mileage of the vehicle and whether it was ever declared a total loss by an insurance company. Certified pre-owned option If you're still concerned about the possibility of hidden issues on a vehicle you've used before buying a certified pre-owned vehicle could be the right choice for you. You'll still save money by buying an older car, but also gain additional confidence in the security of the car. Certified pre-owned -- also known as CPO -- programs vary between manufacturers. The basic concept is that CPO cars are vehicles that are in compliance with a manufacturer's standards and come with a form of guarantee against defects, similar to a warranty for new cars. To do this, check the inventory of the dealership for the CPO vehicle you're searching for. Every dealership uses its own terminology when it comes to pre-owned choices, so make sure to research online prior to heading to the showroom. Most of these vehicles also come with additional warranties. Make sure you check the length of that coverage to understand what it covers. Following steps: Buying a secondhand vehicle is an excellent way to get behind the wheel without shelling out more than you would for a new car. You'll experience less vehicle depreciation and spend less on insurance and registration and still have peace of mind that your vehicle is in great condition. If you are looking to finance a car that is used make sure you are for the latest rates to ensure that you're getting the most favorable deal possible. This is what financing will provide. Leanr SHARE more:
This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ins and outs of securely taking out loans to purchase cars. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to manage their finances by providing concise, well-studied facts that break down otherwise complicated topics into digestible pieces.
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