Buying new cars can be really tempting, but catching your breath before you purchase anything can be a wise idea. Give yourself time to look at how much you could save over time by opting to buy used cars than new ones. Purchasing a used car can save you boatloads of money, provide the same satisfaction as a new car, and provide cost efficient transportation for many years.
According to experts, an average american owns 6 to 9 cars in a lifetime, each costing between $30,000 to $35,000. You could save nearly $60,000 to $90,000 out of your automobile finances during your lifetime, if each of those cars was 3 years old, instead of new.
The word DEPRECIATION, as sinister as it may sound, can have a big role in saving money when buying used cars. In a buyer’s standpoint, DEPRECIATION is you friend.
The Tricks of the Trade
By fully understanding how depreciation works, you can use it to your advantage and save a huge amount of cash over your lifetime. You usually hear that as soon as you buy a car, it loses 20% of its value. Unfortunately, even in less than a minute, a 30 to 35 GRAND car will lose 20% of its value—around 6 to 7 GRAND, as you merrilly drive off the lot. At the end of its first year, wear and tear plus mileage could raise that to 30%—that’s $9000 to $10,500. You might be wondering why you are not feeling it, it is actually because the effects will kick in much later—when you trade in or sell your car.
Look at how depreciation affects these two similar cars, one new and one used.
New Car – You just bought a car for 30 grand and sold it three years later for 15 grand. In this case, the depreciation cost is $15,000.
Used Car – Let’s just say you bought the same car, except it is 3 years old when you bought it. You could have bought the car for only 15 grand. After three long years you could sell it for 10 grand. Basically, the depreciation cost of the used car is only $5,000.
However, people would still think that driving a brand new car is way better than a used one, and it does not take a genius to say that it is correct. If you are willing to pay extra 10 grand to drive a new car, then go for it. But then again, it is always a smart idea to think twice before spending a huge amount of money. It will all boil down to the question, “How much impact can 10 grand to do your life?”
The Stigma of the Old Used Cars
There is nothing new when people downplay used cars by saying that you are just buying someone else’s problems. That is arguably incorrect nowadays. Look at the characteristics of our cars today.
All types of cars require regular maintenance such as tire rotations, brake jobs and oil changes. However, today’s cars can be driven much farther in between these regular maintenance visits. Even the tires and brake pads today last way longer than before.
Reliability: Today’s cars are much more dependable than before. It is common nowadays for some cars to reach more than 100,000 miles before requiring major repairs.
Other advantages of Used Cars
It’s pretty obvious that buying a used car is way cheaper and more often than not cars today are more dependable. Here is a couple more advantages of buying used cars:
Cheaper Registry Renewals
Registration costs for used cars go down every year.
Upgrade to a Luxury Car
Since you can save 30% or more, you can pick a higher class of car. After all, your budget for a low class but brand new car may cover the price of a used higher class car. You can even buy two used cars for the price of one brand new car.
Lower Insurance Premiums
The car insurance cost depends on the worth of the car. When purchasing collision and comprehensive coverage, the insurance cost will be less when the car is cheaper. Some might say, “It’s okay to drop collision and comprehensive coverage,” but the smart thing to do is keep them since they pay for the repairs to your car. And in the end, you will save even more.
The first dent on a brand new car can cause great disappointment and annoyance to the owner. On the other hand, if you bought a used car with a couple of tiny dents already, then the next dent will not be a very big issue.
Reasons Why You should Consider Buying Used Cars
- No Hidden Fees – There could be lots of amazing deals on new cars, but you’ll be surprised when you see the hidden and crazy fees on some new cars such as destination fees, shipping fees, and dealership preparation or processing fee. Unfortunately, some prices of new cars include hidden advertising fees that can be as pricey as 1 grand. Typically, a used car has no hidden fees, but you may still be charged a processing fee which can be a few hundred bucks, though it varies by state.
- Certified and Thoroughly Inspected – Certified Pre-Owned or CPO cars reassure buyers of used cars that they are getting a price efficient and thoroughly inspected car. Certified Pre-Owned vehicles have been refurbished, inspected, and are certified high quality by the manufacturer or other certifying authority. The best thing about Certified Pre-Owned vehicles is most of them only got parts replaced and not major repairs. There are some instances that they did not require even a replacement or minor repair but only repaint and change oils. Certified Pre-Owned vehicles usually have extended warranty, special financing and other benefits and perks.
- Lower Customization Cost – When buying a used car, you are not required to settle for expensive dealership add-ons. You may install your own add-ons at a lower cost than on a new car. You can basically customize your used car for the same amount of money that could have been spent only for the new car’s price.
- Better for the Environment – During manufacturing and initial shipment is when almost 25% of the carbon dioxide a car produces occurs. It is good for the environment if you buy used cars since it reduces the carbon dioxide output. Used vehicles impact the environment less compared to hybrid, newer vehicles. Hybrid vehicles use lead acid, lithium ion, nickel-metal hydride batteries are more hazardous to the environment than a used car because of the toxic waste left behind by batteries and acid.
- Warranties – Some used cars are still covered by their original warranty while other used cars still have the option of creating a new warranty. An extended warranty on a used car can give you access to factory trained technicians to work on your car with quality components and speedy service. Aside from that, you can also utilize a portion of your savings from opting to buy a used car instead of a new one and have a warranty that covers everything until 100,000 miles or more.
So you are done checking out all the benefits of buying a used car, now you are one step closer to saving tons of cash. However, you still have to make sure that the used car you are buying is everything they are telling you in their online ad. Here is a list of what to look for when purchasing a used car through a dealer or a private seller so you can seal the deal with peace of mind.
Things to Check before Buying a Used Car
- Vehicle History – Gather as much information as you can from the current owner about the vehicle’s history and then do your own research. Running a Vehicle Identification Number or VIN check through a paid service like AutoDNA and CARFAX will give you the information about the car’s history, whether it’s an accident or if there is anyone claiming to have lien on it, and if there are any recalls on the model.
- Test Drive – More often than not the test drive is the most vital part of shopping for a used car. Plan your route and put the vehicle through the paces to check its acceleration, maneuverability, braking and suspension. Take it somewhere you can get the feel of changing gears, if possible, take it on the highway and try parallel parking to somehow get an idea of how it feels to do your usual maneuverings using the car. Always be on the lookout for any possible blind spots the car might have.
- Mileage – According to experts, an average car will rack up around 20,000 km each year—the distance manufacturers use to establish standard warranty coverage. To calculate if the car you are eyeing has high or low mileage, divide the number on the odometer by the age of the vehicle. Always remember that a car with high mileage will have more wear and tear on its mechanical parts. In this case, you might want to reconsider your options.
- Paint Damage or Rust – Do an ocular inspection by taking a walk around the car and keep an eye out for any paint chips or rusty spots. Tiny, localized rust patches are not really a deal breaker since they can be fixed really easily. You might want to reconsider the purchase if there are places where the metal is totally rusted through.
- Mechanic Inspection – One you find the car that you think is worth your money, take it to a professional mechanic or your trusted service facility for inspection. Have your trusted mechanic perform physical and ocular inspection to determine if the vehicle has any underlying problems or areas that might present potential issues. It is definitely not a free service, but it could save you from buying a defective vehicle and avoid stress in the near future.
- Frame Issues – While doing an ocular inspection, you should also look for any problems with the frame. You should check the car sitting level, or if there is anything hanging from the undercarriage. Carefully check the bumpers and take a look at the inside of the trunk for new bolts or any deformation that could indicate a recent accident or damage.
- Upholstery – The seats and the interior fabric can get damaged easily. Keep your eyes open for any stains, tears and cracked leather on all the front and back seats—repairs on the upholstery can cost a lot.
- Things under the Hood – The engine is the most vital part of any vehicle. You can just pop the hood and do some ocular inspection on the engine and be on the lookout for cracked hoses and belts, fluid leaks and corrosion while the car is turned off. Don’t forget to check the oil and the transmission dipsticks for discoloration. The oil should be light brown in color and the transmission fluid should be red or pink.
- Interior Electronics – Make sure that the stereo and the other electronic components in the cockpit are working properly by pressing some buttons. If you will be driving in areas with harsh weather and climate, you might as well check the air conditioning and the heat before sealing the deal.
- Tire Condition – It is a steal if the tires are new, but most of the time the tires on used cars are slightly worn. Beware because uneven tread or extra wear on some of the tires usually mean poor alignment, which can be a symptom of suspension, steering or frame issues. Once you do the test drive and notice that the car is pulling to the right or left when driving, it only means the car has poor alignment.
Now that you are well aware of all the benefits of used cars and how to save extra cash for upgrades and whatnot, it’s time to talk about the most important question, “Do you already have a car in mind?” Save yourself from stress and check out our site for a possible match and bargain.