Purchasing a car is a huge expense. If you want to be smart and save some money, a used car is a great option. When you arrive at the dealership, the shiny new cars on display are tempting. The whole showroom smells like brand new leather. It makes you want to purchase a brand new car right on the spot.
The temptation can easily turn to despair when you turn over the price tag. However, doing so will cause you to spend more money than necessary. There are some other reasons to purchase a used car. Let’s have a look at those reasons.
- They Cost Less Money
If you really love a certain model of car, take a look at the models a year or two older. On average, you are going to spend $13,000 more on a brand new car than a used car of the same make and model.
You may wonder how a car can cost so much less in a short amount of time. The answer is depreciation. Unlike a reality purchase, vehicles depreciate as soon as they roll off the lot for the first time. It is no longer a new car, and it isn’t worth as much money. After three years, you can lose up to 40 percent of your vehicle’s value.
- Sales Tax
Depending on the state you live in, there may be a specific sales tax on new cars, but not used cars. This doesn’t apply to ever state, but it may be a good idea to research. Also, the sales tax that is added to the price of a new car is going to be significantly higher than used. When you research how to buy a used car from a dealer, read about the taxes.
- Like New Condition
Many people are leery about purchasing used cars because of their condition. However, most cars are built to last for over a hundred thousand miles. Dealers don’t like to place cars in bad condition on their lot. Most of the used cars you find will be in great working order. If you are concerned, you can have an unbiased mechanic take a look under the hood before purchase.
Many dealerships now have programs that certify the car has been inspected, and all needed repairs have been completed. They typically get sold with a warranty. Also, if the car is under 100,000 miles, they may still carry the warranty from the factory. If you buy a certified car from the dealership, it may cost just bit more, but it will be nowhere near the price of a brand new vehicle.
- Reduced Insurance Costs
Car insurance is often determined by the value of your vehicle. Since you purchased your vehicle for less money, the insurance will generally be less expensive as well. This saves you even more money; who doesn’t love to save money?
- Stretching Your Dollars
The good thing about car manufacturers is they no longer drastically change each year’s model. A new car and a two-year-old car typically look exactly the same. The technology is generally the same, minus a few small features. This means you are getting the most for your money.
- Avoid Main Depreciation
As mentioned earlier, the largest gap for depreciation happens in the first two to three years. This is the chunk of time when your car value is going to drastically drop. After that time span, your car will lose value, but not as fast. If you purchase a two-year-old car and trade it in in two or three years, you won’t lose as much money as you would have if it was a brand new car.