Top advantages to buying a used car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by providing you with interactive tools and financial calculators, publishing original and objective content. This allows you to conduct your own research and evaluate information for no cost to help you make sound financial decisions. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website come from companies that pay us. This compensation can affect the way and where products are displayed on this site, including such things as the order in which they may appear within the listing categories and other categories, unless prohibited by law. Our mortgage or home equity products, as well as other products for home loans. However, this compensation will affect the information we publish, or the reviews you read on this site. We do not include the universe of companies or financial deals that could be accessible to you. Share: Barry Austin Photography/Getty Images
4 minutes read Read published March 02, 2023.
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is an expert in understanding the ways and pitfalls of borrowing money to purchase an automobile. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are committed to helping readers gain the confidence to manage their finances with concise, well-researched and well-organized information that breaks down complex topics into manageable bites. The Bankrate promises
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This compensation could influence the manner, place and when products appear within listing categories in the event that they are not permitted by law for our mortgage and home equity products, as well as other home loan products. Other elements, like our own proprietary website rules and whether a product is offered in your region or within your personal credit score could also affect the way and place products are listed on this site. While we strive to provide the most diverse selection of products, Bankrate does not include information about every credit or financial products or services. A used car purchase over a new vehicle is a good option for many drivers. As rates of inflation in the U.S. soar to record huge numbers, Americans are seeing its effects at the grocery store checkout and at the . And with the new vehicle costing close to $47,000 as of early 2022 in accordance with Kelley Blue Book, now could be the best moment to save some cash and purchase a used . Buying used will save you money Going for a used car rather than a new one could save you big bucks in several ways. The cost of a used car is less than the cost of the sticker — however, that’s not where the savings end. It will also mean that you’ll reach to your wallet smaller than you would if you owned a brand-new vehicle in terms of costs including insurance, depreciation of the vehicle and insurance. The 4th quarter in 2022, the cost for a used vehicle is $526. Drivers financing a new vehicle paid $716, as per . The savings of more than $180 per month adds up quickly and you could end up saving thousands by going for a used car over the new model. While paying a lower cost of purchase for the same vehicle model of different year is an obvious reason to buy used cars but there are other reasons also. Five benefits of buying used Not all used cars aren’t created equal. You must before deciding whether a car you are considering purchasing can be considered in decent or bad condition. In that regard , here are five great reasons to buy a used vehicle. 1. Depreciation of vehicles is a fact of daily driving, however an used car has lower depreciation than a brand new vehicle. New cars typically depreciate about 20 percent when they are driven off the lot. And most cars will lose another 10 percent in value during the initial year. That’s a loss in value of 30 percent in the first year of ownership. A used vehicle depreciates at a lower rate than a new vehicle. This is because once you are behind the wheel of the vehicle, it will already have experienced the major depreciation. Brand new vehicles depreciate at when they leave the lot However, a used car is more depreciated so you’ll be able to have a more stable loan-to-value ratio. 2. Lower insurance costs Insurance costs differ based on experience with driving, your age as well as your the credit score of your, and the location. The majority of the time — and just as the vehicle will cost less, insurance for a used car tends to be lower than that of a brand-new vehicle. The most important factor to consider when deciding the the value of the vehicle. Since a car is more expensive than a modern version, the cost of insurance should be less. For coverage recommendations If your car is old, then you may be able to think about liability when your state permits it, and not add comprehensive and collision coverage if your car is more recent. However, insurance rates aren’t always consistent so to save money be certain to research your expected auto insurance cost prior to leaving the dealership lot. 3. Lower dealer fees As insurance prices differ by ZIP code, the anticipated charges that are associated with a used vehicle are not created equally across the 50 states. They are, however, less costly than those associated with a new vehicle because the cost for the car is much lower than the cost of the vehicle in the first place. This is especially true for any sales tax that you could be required to pay. To prepare for the additional charges that are associated with using to purchase a vehicle, visit your state’s DMV site for details on the title tax, registration fees as well as documentation fees. 4. You get more value for your money The ability to stretch your budget for car purchases is another advantage that comes with buying a used car. You can buy more car by purchasing used rather than new. If you’re at a high-end car, you may not be able to afford this year’s model, but one that’s 2 or 3 years old could better fit your budget. Also, it is important to take into consideration the fact that automakers have stopped re-designing their vehicles each year, which means that the technological and style differences may be less noticeable. Consider these savings potential and even compare which best suits your needs with an . 5. More peace of mind In the past, buying used cars carried a stigma and many people saw it as a threat, but the availability of car history reports has changed the landscape. Drivers can now access information about the vehicle’s ownership history as well as the history of accidents, title status, mileage and more. Before signing off on the purchase of a second-hand vehicle, make use of the services offered by websites such as Carfax and AutoCheck to review the history report for the vehicle. Based on the vehicle’s identification number, or VIN. The reports provide various valuable information including verification of the mileage and whether the vehicle was ever declared a complete damage by an insurer. Certified pre-owned option If you are still worried about potential hidden problems on a vehicle you’ve used before buying a certified pre-owned vehicle could be a great option for you. You’ll still save money by buying an used vehicle, but you will increase your confidence in the security of the vehicle. Certified pre-owned — also known as CPO — programs differ from one manufacturer to the next. The basic concept is that CPO automobiles are those that are in compliance with a manufacturer’s standards and carry some form of guarantee against defects similar to a new-car warranty. For this, you must check the inventory of the dealership for the CPO vehicle you’re searching for. Each dealership has its own lingo in relation to used alternatives, so be sure to explore online before heading to the showroom. A majority of these cars include additional warranties. Make sure you check the warranty to know what it includes. The next step is to purchase a used vehicle is a great way to get behind the wheel without shelling out the same amount as you would on a brand new vehicle. You’ll experience less depreciation on your vehicle and pay less on insurance and registration but still be in peace of mind that your vehicle is in great condition. When the time comes to finance a car that is used make sure you are current so you know you’re getting the best deal available. And to that financing will give. Leanr more SHARE:
This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ways and pitfalls of borrowing money to buy cars. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping readers gain the confidence to control their finances through providing precise, well-researched and informative facts that break down complicated topics into digestible pieces.
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