Top advantages to buying a used car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by providing you with interactive tools and financial calculators that provide objective and unique content. We also allow you to conduct your own research and evaluate information for no cost and help you make financial decisions with confidence. Bankrate has partnerships with issuers such as, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The offers that appear on this website come from companies who pay us. This compensation can affect the way and where products are displayed on this site, including for instance, the order in which they may be listed within the categories of listing in the event that they are not permitted by law. This applies to our mortgage, home equity and other home loan products. However, this compensation will not influence the information we provide, or the reviews that you read on this site. We do not contain the vast array of companies or financial deals that could be open to you. Share: Barry Austin Photography/Getty Images
4 min read The publication was published on March 02, 2023.
Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the details of 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 the end of 2021. They are dedicated to helping readers gain confidence to control their finances by providing precise, well-studied information that breaks down complicated subjects into digestible pieces. The Bankrate promise
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This compensation could affect the way, location and when products appear in listing categories, except where prohibited by law. We also offer mortgage, home equity and other home lending products. Other factors, like our own website rules and whether a product is offered in your area or at your personal credit score could also affect the way and place products are listed on this site. Although we try to offer a wide range offers, Bankrate does not include the details of every credit or financial products or services. A used car purchase over a new vehicle is an excellent option for many drivers. As rates within the U.S. soar to record huge numbers, Americans are seeing its consequences at the supermarket checkout as well as at the . Also, with new vehicle costing close to $47,000 in early 2022, according to Kelley Blue Book this could be the best opportunity to save money and purchase a used . A used car can save you money Buying a used vehicle instead of a brand new one could save you big bucks in a variety of ways. A used vehicle will cost less on the basis of cost of the sticker — however, that’s not where the savings stop. It will also mean that you’ll reach for your wallet lower than if you were driving a brand-new vehicle with regards to fees, insurance and vehicle depreciation. In the 4th quarter in 2022 the price for an used car is $526. Drivers who finance a brand new car paid $716 according to . Saving over $180 a month can add up quickly and you could save thousands by going for an used vehicle over an entirely new one. While paying a lower purchase price for the same model of a different year is the obvious reason to buy used cars, there are others as well. Five advantages of purchasing a used car Used cars aren’t all made equal. It is essential to know whether a vehicle you’re considering buying has a good condition or bad condition. With that caveat , here are five of the best advantages of buying a secondhand car. 1. A lower depreciation rate for vehicles is a fact of daily driving, however an used car has less value than a brand-new vehicle. New cars generally depreciate around 20 percent when they are driven off the lot. The majority of cars lose another 10 percent in value in the initial year. That’s a loss in value of 30 percent within the first one-year period of ownership. The value of a used car decreases at a much slower rate than a new vehicle. This is because when you’re driving of the vehicle, it’ll already have experienced the major depreciation. Brand new cars depreciate when they leave the lot 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. Lower costs for insurance vary based on your experience with driving, your age as well as your credit score, mileage and your location. Typically — just because the car will cost less — insurance for a used vehicle will be less expensive than that of a brand-new car. The most important factor to consider when deciding the value is the worth of the vehicle. Because a than a newer version, the price of insurance is likely to be lower. For coverage recommendations for your vehicle, if it 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 vehicle is more modern. However, insurance rates aren’t always consistent so to save money, make sure to and research the estimated cost of your auto insurance before leaving the dealership lot. 3. Lower dealer fees As insurance rates differ by zip code, the expected fees that come with your used vehicle are not created equal across all 50 states. But they are less expensive than those associated with a new vehicle due to the fact that the cost of the vehicle is less in the first place. This is especially true of the sales tax you may have to pay. To be prepared for the additional fees that come with used to purchase a vehicle, visit your state’s DMV website for specifics regarding the registration fee and title tax and fees for documentation. 4. A lot more bang for your buck Stretching your car-buying dollar is another major benefit when you buy used cars. You can save money by purchasing used rather than new. If you’re set on a luxury vehicle but you’re not in a position to purchase the latest model, however one that is 2 or 3 years old could better fit your budget. Also, it is important to take into consideration the fact that carmakers are no longer redesigning their vehicles each year, which means that the technological and style differences may be less noticeable. Estimate the savings you could save and compare which is the best for you using the help of . 5. More peace of mind In the past, driving used vehicles was frowned upon and many drivers saw it as a danger however, the accessibility of car history reports has altered the perception. The drivers now have access to information about the vehicle’s ownership history, accident history as well as the status of the title, mileage, and more. Before approving a used vehicle take advantage of offerings from websites like Carfax and AutoCheck to see history reports of the car. Based on the vehicle’s identification number, or VIN, these reports give various valuable information such as proof 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’re still concerned about potential hidden problems on a vehicle you’ve used before, purchasing certified pre-owned might be the right choice for you. You’ll still save money when you purchase an used vehicle, but you will you will also have more assurance of the quality of the car. Certified pre-owned or CPO programs differ between manufacturers. In essence, CPO cars are ones that are in compliance with a manufacturer’s standards and carry some form of warranty against defects, similar to a warranty for new cars. For this, you must check dealership inventories for the CPO vehicle you’re searching for. Every dealership uses its own lingo for pre-owned alternatives, so be sure to research online prior to visiting the showroom. Most of these vehicles also include additional warranties, so check the length of that assurance to find out what it covers. Next steps Buying a used vehicle is an excellent way to take the wheel without spending as much as you would for a brand new vehicle. You will be met with less depreciation on your vehicle and pay less on registration and insurance and still have assurance that your vehicle is in good condition. When it is time to finance a car that is used, be sure to check current so you know you’re getting the best price available. This is what financing will give. More SHARE with Leanr:
This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ways and pitfalls of taking out loans to purchase a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are enthusiastic about helping readers gain the confidence to take control of their finances with precise, well-researched and informative details that cut complex topics into manageable bites.
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