Budgeting, Debt

Car Buying: Why Buying Used Is the Best Option

For some people, buying a different car is a lifestyle choice. For others, it’s a matter of necessity. Whatever your reason for entering the automobile market, the first choice you’re faced with is whether to buy new, buy used, or lease. From an economics standpoint, buying used is usually the most financial sound choice. Here are 3 reasons why you want to consider buying used for your next car purchase.

1. You’ll save a lot of money.

Of course, it’s obvious that a used car costs less than a new car; but the difference is substantial because new cars depreciate very quickly. According to Consumer Reports, a new car loses 46 percent of its value after three years. So if you paid $25,000 for a new car, it would only be worth $13,500 after three years. On the other hand, if you bought that three-year old car, you’d have a pretty nice vehicle, and will have spent much less on it.

2. Today’s used cars are more reliable than used cars of the past.

For years, there has been a big push by automobile manufacturers to lease cars; and that’s a boon to the used car buyer. Typically, lease terms run for two or three years, at which time the lessee turns the car back to the dealer. You can probably guess what happens to the car then – it’s sold as a certified pre-owned (CPO) vehicle. These CPO vehicles are a great value for the used car buyer because the lease terms limit the number of miles the car can be driven and require superior care and maintenance. Otherwise, the lessee pays a penalty. So the person who buys the CPO vehicle gets a low-mileage, like-new vehicle at a used car price. It should be noted that CPO vehicles are typically more expensive than a regular used car, but they’re still a great value, especially since the dealership is certifying that the car is essentially like new.

3. Buying used is no longer like buying “a pig in a poke”.

It used to be, when you looked at a used car, you were at the mercy of the person selling it when it came to the vehicle’s history.  We all know that image of the greasy, untrustworthy car salesman.  That’s no longer the case, at least when you buy from a reputable dealer. Today, most dealers offer a vehicle history report from providers like Carfax and AutoCheck. In fact, if the seller doesn’t offer a history report, it’s probably best to pass on that vehicle. Of course, a vehicle history report may not identify every possible cause for concern associated with a particular used car, but they still add some peace of mind when buying one.

While buying a used is more risky than buying new or leasing; today’s used vehicles are, for the most part, better than ever. Vehicle history reports that can reveal important details about a car’s past, and automaker CPO programs offer a reasonable assurance that you’re getting the cream of the used car crop.

Here is some additional information about buying used:

http://www.bankrate.com/finance/auto/5-smart-reasons-for-buying-a-used-car-7.aspx

https://www.nerdwallet.com/blog/loans/compare-costs-buying-new-car-vs-used/

 

 

 

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