Besides a home, a car could be the most expensive purchase you can make. In as much as you may relish getting behind the steering wheel of a flashy vehicle, it is of importance to responsibly consider the financial ramifications. As a consumer, you need to undertake an in-depth research on the best type of car to buy to avoid cases of regrets. Below are some of the reasons why you should contemplate purchasing a used vehicle.
Buying a used car is cheaper than buying a new one. A new car invites substantial costs. Many financial institutions usually ask for at least 10% on new car loans. If you pay a lesser deposit, your monthly installments will certainly be higher. Additionally, with a used car, it will be less expensive in case you find it necessary to upgrade to a more flamboyant model. A used car is, therefore, the go-to option if you want to retain some cash in your account without sacrificing on quality.
Some excessive fees are also responsible for the incredibly high costs of new vehicles. These vehicles have hidden fees attached to their actual prices in the form of shipping charges, destination charges, and dealer preparation fees. Some cars even have advertising fees attached to them, all which add to inflated prices of the new vehicles.
With each passing month and mile, cars fast lose their value. Amusingly, the steepest decline in a vehicle’s value happens the very moment you drive your new car off the dealership yard. Ordinary vehicles depreciate by at least 30% of their value during the first two years of ownership. With used cars, the bulk of depreciation has already happened and is less likely to experience a steep decline in value as in the case of a new one. If you intend to buy a used car sometime in the future, it is of the essence that you find used car value guides to acquaint yourself with the value of your desired model in the future. Leasing guides are also a decent alternative for consulting since lease payments are calculated by the cars’ residual, or resale values.
Just as in financing, the age of a car greatly influences the insurance rates. Since a used car is of a lesser value than a newer version, its cost of insurance should be less. Additionally, some insurance elements of a used car (e.g. collision and theft) can be dropped. Nevertheless, you need to carry out a proper research that will save you from insurance frustrations regardless of the vehicle you choose.
Sometimes, as a prospective buyer, you may feel the urge to purchase an old car model or wheel design. If this is the case, odds are you are not going to come across one in a new condition. Nothing limits you to only the latest models released in the past year or two as would be the case when buying a new car. By purchasing a used car, you are spoilt for choice by the wide selection inventory at your disposal. This urge can only be satisfied by going for a used car, a model of your choice.
In many places, the rate of annual registration fee depends on your vehicle’s transaction price and its model year. In most cases, the registration fees undergo a sharp decline a few years after the manufacture of a car. The fall is sharpest during the first three years, after which it starts leveling off. By opting for a used vehicle, you save an approximate of a thousand dollars by avoiding new car registration fees.
Contrary to before, car shopping is now an all too new experience. A plethora of information about an individual vehicle is only a click away. There are sites (e.g. KBB.com) that you can use to search for the price of a particular model and year. Other companies (e.g. CarFax) provide vehicle history reports. By scrutinizing the cars’ identification number (VIN), they can provide lots of information ranging from mileage verification to whether a car has ever been declared written off by an insurance company. With such sites to consult, buyers of used cars can now minimize or avert the risk of buying damaged cars or those with hidden problems.
Alternatively, you can find out the experiences of many other car buyers who have in the past acquired the vehicle you are eyeing. If they were satisfied with their purchase, so should you.
New cars feel comfortable, are easy on the eye, smell great, and command a second glance while on the road. However, these “attributes” will set you a few hundred or thousand dollars back. Having to pay through the nose to acquire them is a satisfactory indicator as to why you should embrace used vehicles.