A car is usually one of your most expensive purchases. When buying a car, you have a choice between new or used. Both options have advantages and disadvantages. The driving factor for most people is budget. A used car can be a good deal if the miles are still low and the vehicle has a decent amount of warranty left. Below are some key benefits of purchasing a used car or truck.
Lower Price and Reduced Depreciation
It’s a fact that a new car no matter the brand or model loses thousands of dollars in value before the ink dries on the sales paperwork. For example, a BMW or Mercedes from 2012 would be worth about the same as a mid-level priced 2016 Honda or Toyota. A vehicle typically loses most of its value within the first few years then the decline is more gradual after that. So basically, it’s common sense, no matter what vehicle you buy, it will be cheaper if you buy that model used. If you are in the Portland area, look for a used car and truck dealership portland or.
Reduced Registration Fees
In most states, the registration fee is based on the value of the vehicle. This can mean the difference of hundreds of dollars per year between a new and used car. As the value of the car drops, so does the fees. The fees are usually the highest within the first five years.
New Car Dealer Fees
There are numerous fees that new car dealers will charge buyers. Some of the fees can be declined, while others are built into the price. The most notable charges are destination fees, shipping charges and dealer preparation. You can also be charged hundreds for rust protection or additions like pinstriping. Many of these things can be done much cheaper at another company.
One of the big concerns for most buyers concerning used cars is will it be reliable long term. Of course, the key factor when buying used is to not buy too old or with high miles. As with anything, as a vehicle ages it is more prone to breaking. Unlike decades ago, cars are designed to last well beyond 100,000 miles if properly maintained. Buyers also have the option of purchasing a pre-owned certified vehicle that has certain guarantees over regular used cars. It is best to buy a car with some manufacturer warranty remaining. Buyers also have the option of purchasing an extended warranty on the vehicle.
Like registration fees, most insurance rates are based on the value of the car among other things. As the value goes down, so does the rates. The higher the value of the vehicle, the more it will cost the insurance company to fix it.
Sure, the new car smell and being the first owner has its appeal, but is this really the best financial decision? The thousands that you can save by buying used can be put to better use. Yes, a used car typically takes a bit more time to find the best deal, but it is well worth it.