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 offering you interactive tools and financial calculators that provide objective and unique content, by enabling you to conduct your own research and compare data for free – so that you can 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 products that appear on this website are provided by companies that pay us. This compensation may impact how and where products appear on the site, such as for instance, the sequence in which they be listed within the categories of listing, except where prohibited by law. Our mortgage, home equity and other home lending products. But this compensation does have no impact on the information we publish, or the reviews that appear on this website. We do not cover the universe of companies or financial offerings that might be open 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 with the details of borrowing money to buy an automobile. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers gain confidence to control their finances with precise, well-studied facts that break down complicated subjects into digestible pieces. The Bankrate promise
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This compensation could impact how, where and when products appear within listing categories and categories, unless it is prohibited by law. This is the case for our mortgage, home equity and other home lending products. Other factors, such as our own rules for our website and whether or not a product is available within your region or within your own personal credit score may also influence the way and place products are listed on this website. We strive to offer an array of offers, Bankrate does not include details about every financial or credit item or product. A used car purchase over an entirely new one is a great alternative for many drivers. While rates in the U.S. soar to record huge numbers, Americans are seeing its effects at the grocery store check-out and in the . Also, with new vehicle costs averaging close to $47,000 in early 2022, as per Kelley Blue Book now might be the perfect opportunity to save money and purchase a used . Buying used will save you money Going for a used car rather than a new one can help you save money in a variety of ways. The cost of a used car is less based on sticker price alone — however, that’s not where the savings stop. Additionally, you’ll be reaching for your wallet much lower than if you were driving a brand-new vehicle with regards to fees including insurance, depreciation of the vehicle and insurance. The in the 4th quarter in 2022, the cost for a used vehicle is $526. Those purchasing a brand-new car pay $716 according to . Saving over $180 a month adds up quickly and you could save thousands of dollars by purchasing a used car over an entirely new one. Although paying a cheaper cost for the same vehicle model from a different year is the obvious reason to buy a used car but there are other reasons as well. Five advantages of purchasing a used car Used cars aren’t all created equal. It is important to determine whether a car you are considering purchasing has a good condition or bad condition. In that regard , here five top advantages of buying a secondhand car. 1. A lower depreciation rate for vehicles is a fact of the road, but an older vehicle has lower depreciation than a brand new vehicle. New cars generally depreciate around 20 percent when they are driven off the lot. The majority of cars be lost 10 percent in value within the first year. That’s a loss in value of 30 percent during the initial calendar year. 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 have already undergone its major depreciation. Brand new cars depreciate when they leave the dealership however a used car has a slower rate of depreciation and this means that you’ll have a higher stability for your loan-to-value ratio. 2. Costs for insurance are lower. They differ based on age, driving history, credit score, mileage and the location. In general — because the car will cost less — insurance for a used car will be less expensive than that of a new car. The most important factor to consider when deciding the the value of the vehicle. Because it is less expensive than a more modern version, the cost of insurance will be lower. Regarding the recommended coverage, if your vehicle is old, then you may want to consider liability only when your state permits it, and not add collision and comprehensive insurance if your car is more recent. But insurance rates are not always uniform, so to save money be certain to research the expected cost of auto insurance prior to leaving the lot of the dealer. 3. Lower dealer fees As insurance rates differ by zip code, the expected charges that are associated with a used vehicle are not created equal across all 50 states. But they are less expensive than those for a brand new car due to the fact that the cost to purchase the automobile is much lower in the first place. This is especially true of the sales tax you may have to pay. To be prepared for the additional charges that are associated with using the state DMV website for more information on title tax and registration fees 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 an used vehicle. You can save money by purchasing used rather than new. If you have your sights set on a luxury vehicle however, you might not be in a position to purchase this year’s model, but one that’s two or three years old may be more suitable for your budget. It’s also important to consider the fact that carmakers are no longer redesigning their vehicles every year, so the tech and style differences may be less noticeable. Estimate the savings you could save and compare which best suits your needs with an . 5. A greater sense of security the past, using used vehicles was viewed as a risk and many drivers saw it as a threat, but the availability of vehicle history reports has altered the landscape. Drivers now can see details about the vehicle’s ownership history as well as the history of accidents and status on the title, mileage, and more. Before signing off on a used vehicle take advantage of the services offered by websites such as Carfax as well as AutoCheck to view the history report for the vehicle. Based on the vehicle’s identification number, or VIN. These reports give numerous valuable details including verification of the 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 the possibility of hidden issues in an older vehicle purchasing a certified used car could be the right choice for you. It will save you money when you purchase a used car but you will also have more confidence in the reliability of the car. Certified pre-owned — or CPO programs differ from one manufacturer to the next. In essence, CPO cars are ones that conform to a manufacturer’s standards and carry some form of guarantee against defects, like a brand-new car warranty. To find out more, look through dealership inventories for the CPO vehicle you’re searching for. Every dealership uses its own terminology when it comes to pre-owned choices, so make certain to do some research before visiting the showroom. A majority of these cars include additional warranties, so check the warranty to know what it covers. Following steps: Buying a secondhand vehicle is a fantastic opportunity to take the wheel without spending as much as you would for a new vehicle. You’ll experience less depreciation on your vehicle and pay less on registration and insurance but still be in assurance that your car is in great condition. If you are looking to finance a car that is used ensure that you check for the latest rates to ensure you’re getting the best deal available. That’s what financing can provide. Leanr SHARE more:
This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the ins and outs of securely borrowing money to buy 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 take control of their finances by providing precise, well-researched and informative facts that break down otherwise complex topics into manageable bites.
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