The time comes for most of us when we just have to get a new vehicle. This could be because of an addition to the family, a need for better fuel economy, or just because you have driven the wheels off of your old vehicle. Regardless of the reason, the decision to buy new or used will most likely come into play. Although the factors influencing your decision may differ from others, the fact of the matter is that buying a used car is usually a great choice. To be fair though, we will look at the pros and cons of buying a used vehicle.
The Pros of Buying Used
Most of you are well aware that when you buy a new vehicle and drive it off of the lot an instant depreciation of value occurs. This means that you will almost instantly have negative equity in a new vehicle. A used car has already gone through the rapid depreciation and the amount of inequity will be much lower.
The recent addition of certified used car programs has taken the risk out of buying used. In years past, most used vehicles did not come with a warranty nor did they go through any kind of inspection procedures. Todays’ used car market is much more reliable and many cars are covered by a 100k mile powertrain warranty. This gives you the peace of mind of a new vehicle without the added cost.
Another consideration when purchasing a used vehicle is the cost to insure it. This includes your auto insurance and optional gap insurance. Generally speaking, the insurance rate for a used vehicle is going to be lower than the new equivalent of the same car. Gap insurance is a type of insurance that covers the difference between the loan amount and the amount the vehicle is covered for. This is usually only needed for new cars. Omitting gap insurance can save you a couple thousand dollars on your purchase.
The Cons of Used Cars
Vehicles are a status symbol for many of us. Buying a used car will often times not fulfill your need to impress others with the vehicle you have bought.
Sometimes the overall cost of a new vehicle can be lower. This is because of the interest rate. If you are a well-qualified buyer, you may be eligible for a zero interest loan on a new car. When compared to the 2-3% interest rate on the average loan on a used vehicle, you could actually pay less for the new car.
Not all used cars are certified. Extra caution must be taken when buying a used vehicle to ensure it is of high quality. This could be as simple as taking it to a mechanic for an inspection. The downside being you may have to pay to have a vehicle inspected that you do not end up buying. You should also try to find a used car that is still under warranty for peace of mind. Some cars may not have a warranty and you could be liable for repairs.
While a used car may not be for everyone, they are a great choice for many. The ability to save thousands of dollars on a nice vehicle makes buying used cars a good decision. Just remember to take the time to ensure you are buying a quality product.