10 Reasons To Buy A Used Car Instead Of A New One
Buying a car seems like a huge deal because of the major financial commitment — you’re putting a lot of money down, you’re giving away a huge chunk of your paycheck every month, and you’re going to be driving this thing for years, if all goes well. Instead of worrying about buying your new car, relax and start looking for a quality used car. This will not only save you stress, it will save you a lot of money. Here’s why:
1. New cars lose value quickly.
Once you drive your brand new car off the lot, it loses up to 15% of its value. That means if you turn around and try to sell it back, you’re going to get a low offer for a car that is still brand new! Which basically means you threw away several grand, depending on your car’s initial price. For the next three or four years, your new car will depreciate even more. Studies have shown that cars over three years old have already lost 54% of their value.
2. Pay less in sales tax.
Your total for the car will be less than a new car, so you will have major savings when it comes to sales tax. Sales tax varies from state to state, but if you’re saving several thousand on the car itself, you’ll be saving several hundred on the sales tax alone.
3. Pay less for insurance.
New cars are worth more, so they cost more to insure. When you buy a used car, the value is much lower so you’ll be able to save on your insurance, and maybe even reconfigure what coverage you have.
4. Cars are made to last.
Most cars on the road are over ten years old, and they are still running fine. If you get a three or four-year-old car, you can count on driving it for six or more years, if you keep up with maintenance. That’s not bad, considering how much you saved on your initial purchase of the used car. Add in maintenance over six years, and even if you decide you want a different car by that point, you’ll still have saved more than buying a new car initially. Buying a nice used car every six years will be cheaper than buying a new car every ten or fifteen years.
5. Buy a nicer car.
You really love BMWs, but you have a Honda budget. When you consider used cars on the lot, you might be able to buy a nicer car than you thought your budget would allow. Sure, you could afford a brand new Toyota, but what about that used Lexus that’s the same price?
6. Don’t worry about the dings.
Not only is the act of buying a new car stressful, but it’s also stressful to drive a new car! You’re eyeing every car on the highway as they edge toward that dotted line — and parking lots? Forget it! Park all alone in the back and hike to the store to keep that paint job pristine. With a used car, you might already have a few dings in the paint, so you won’t have to treat your car like it has a bubble around it. You’ll be able to hop in and get on the road, which is the whole point anyway, right?
7. Know your car’s history.
Used car salesmen have the stereotypical story about an old lady only driving the car to the store every week, and otherwise it’s in pristine condition and worth this much. You don’t have to listen to that spiel anymore. Thanks for car history reports like CarFax and AutoCheck, you’ll be able to find out exactly how old the car is, what repairs its had, and more.
8. Buy Certified Pre-Owned (CPO).
If you’re squeamish about buying a used car that anybody could have done anything to, despite having your CarFax report in hand, ask to look at some certified pre-owned cars. These cars might have been leased to someone for a year or two, or used by the dealership for certain things. They typically have lower mileage, are in great condition, and have been inspected before they were put on the lot. The biggest advantage to buying CPO is that you’ll get a warranty, which doesn’t usually come with a used car.
9. Be protected by lemon laws.
Each state has lemon laws that protect car buyers from cars that turn out to not work right and are unable to be repaired. You’ll have to research your state’s lemon laws before you buy — some states cover used cars too.
10. Less pollution.
What? You’re still driving a car and putting exhaust into the atmosphere, so how does buying used affect pollution? Scientific American reported that a study conducted by Toyota in 2004 discovered that up to “28 percent of carbon dioxide emissions generated during the lifecycle of a typical gasoline-powered car can occur during its manufacture and its transportation to the dealer”. That means the used car you’re looking at has already been manufactured and shipped, so by not buying new, you’re keeping a lot of pollution out of the environment. What an easy way to go green!
Want a FREE way to learn about new things that can help you reach your financial goals quicker & save more money this year than you thought possible?
Wall Street Insanity’s free newsletter is your one-stop shop for personal finance and business insight. Whether you need to pay off debt, earn extra cash, come up with a better way to save money, or are starting or running a company, you’re sure to find valuable information that can inspire you. Sign up and see what it can do for you.