If you’re looking for sheer value for money when purchasing your next car, used cars are the way to go. For most people, buying a car is one of the biggest investments in their life, and you can easily go overboard if you spend a lot more than you can on a car, especially a new one.
But, thanks to the used market, you can find the right car for a much cheaper price, saving you a lot of money in the long run. You can easily find a used Volkswagen Golf for sale, along with other popular models if you want something simple and efficient, or you can opt for a luxury car like a BMW 3 Series at a much lower price.
It is a well-known fact that cars depreciate a significant amount of their value during the initial years of ownership. The moment you drive a new car off the lot, it will instantly lose around 10% of its value. Use it for a year, and that number increases to 20%. Even if the car is taken care of perfectly, it will still lose a set value in depreciation, making cars a very bad investment. But, in some cases where you plan on driving a lot or need the latest features, a new car makes sense. However, for a budget-conscious buyer who’s looking to maximize value, a used car is a much better option since the first owner already paid for depreciation.
In most cases, the depreciation curve will start to level off after three years, and after the five-year mark, it will be negligible in comparison. So, buying a three-year-old car will get you the best deal possible, essentially paying half the purchase cost for a fairly new car. Older models offer even more value but the wear and tear will be higher depending on usage and maintenance. When you eventually sell your car and buy another, you will have lost a lot less money in depreciation compared to a new car.
Buy a “better” car
Another big advantage when going the used route is the sheer variety of cars available. Because of the lower prices, you can even shop from a segment or two above, getting you a lot of extra features or a bigger car in general. This will also mean the car will be safer, more technologically advanced, and more powerful compared to a showroom fresh example at the same price.
For example, if you have the budget for a new Honda Civic, you can easily opt for a used Honda Accord that offers a lot more space and features, while still saving a lot of money. But be warned though, some cars are better than others. Shopping for a used luxury car like a BMW might be possible, but the maintenance and ownership costs will be similar or even higher than a new BMW, especially if the car is older and worn out. But, shopping for a car that comes a segment or two above is possible.
Lower running costs
Right from the moment you buy a used car, the overall ownership costs will be a lot less compared to a new one. One of the bigger expenses when buying a new car is insurance since the value of the vehicle is considered when calculating rates. But, when you buy an already depreciated used car, its declared value will be a lot less in comparison, leading to lower insurance costs.
A lot of US states also charge lower registration fees based on the car’s age. In most cases, cars older than three years will have to pay a lot less for registration, saving you even more money. Sales tax is also another factor to consider, and most states don’t charge sales tax when you buy a used car. Although maintenance costs can be slightly higher than usual, all these saving benefits lead to lower running costs compared to a new car.
Unlike new cars which require a lot of overhead, financing is a lot easier with used cars since they’re worth a lot less. If you’re buying from a used car dealership, they will easily arrange a finance option for you, and take care of the process. Down payment rates are also a lot lower with used cars. Financing is usually done for certified pre-owned vehicles.
Certified pre-owned cars
If you still want some peace of mind when buying a used car, most manufacturers offer certified pre-owned models that come with warranty packages and other benefits. Although there are dealer level and manufacturer level CPO cars available, both will include some sort of warranty and other perks with the purchase. However, the latter will almost always be a better package with a better warranty, roadside assistance packages, and more.
Most cars that are available through the CPO route are off-lease and lightly used trade-in models. Since a lease requires customers to take good care of the car to avoid hefty fines, most leased cars will be in excellent condition with good maintenance history and minimal wear. CPO cars will also have lower mileage compared to regular used cars since there are limits to the distance driven annually on a lease.
Reliability of modern cars
Unlike older cars which broke down every once in a while, almost all new models are more reliable, thanks to modern technologies and features. A recent study found that the average age of a car in the US currently stands at nearly 12 years, meaning owners are keeping their cars a lot longer since there are no major reliability concerns.
Most modern cars can easily sail past 200,000 miles with timely maintenance. The key here is maintenance, and a badly maintained car will have a lot more issues. So, make sure you get it thoroughly checked by a mechanic before taking the plunge. Vehicle history reports will also prove useful in this regard.
Vehicle history reports
Thanks to modern services like AutoCheck and CARFAX, finding out a vehicle’s history has become a lot easier than ever. Reports usually include maintenance records, number of previous owners, previous registration status, accidental and other damages, repair history, lemon law history, and give you accurate mileage. All this means dealerships or private sellers won’t be able to fool you or roll back the odometer, making your purchase a lot safer.