Posted Monday, July 12, 2021
Whether you’re getting your first ride or replacing your current car, you may find yourself wondering whether you should buy new or used. A brand-new vehicle can be enticing, but you may want to take a closer look at the many benefits of a used car before you make your final decision. Below is a list of compelling reasons why you should consider purchasing a used vehicle instead of a new one.
Your vehicle is probably one of the most expensive purchases you’ll ever make, especially if you’re planning to get a luxury car. As such, you’ll want to get the best possible value for your money. Because new car values depreciate so rapidly, buying a used car enables you to save a substantial amount of money without giving up much in terms of quality.
Regardless of its age, a used vehicle generally costs significantly less than a brand-new one of the same make and model. This is because a car loses about 20% of its value the moment you drive it off the dealership lot. For example, a brand-new luxury car that costs $40,000 will have a market value of $32,000 as soon as you purchase it. By the end of its first year, wear and tear and mileage can bring the depreciation up to 30%, leaving a residual value of $28,000.
Let’s look at the impact of depreciation on two similar vehicles — one new and one used. If you buy a new luxury vehicle for $40,000 and sell it for $20,000 three years later, the cost of depreciation is $20,000. On the other hand, if you buy the same car when it’s three years old, you’ll pay only $20,000 for it. After driving it for three years, you can probably sell it for about $13,000. This means the used vehicle will cost you only $7,000 in depreciation, resulting in $13,000-worth of savings.
Since a used vehicle costs considerably less than a new one, you’ll be able to pay off your auto loan sooner and reduce the total amount of interest you need to pay. Therefore, you’ll have more money to pay for other expenses every month. Also, because you’re paying less to purchase a used vehicle, you have the option to purchase a better car or move up to a higher trim level. Instead of buying an ordinary car, you can choose a used SUV or luxury vehicle that you otherwise couldn’t afford to buy if it were new.
If you decide to purchase a new vehicle, you’ll be limited to models that have been launched over the past two years. Although more than a hundred new models are introduced every year, you’ll have a lot more options if you are shopping for a used vehicle. The used-car market offers thousands of vehicles of different types, makes, models, model years, and trim levels to meet the budgets, needs, and lifestyles of every driver. It also includes vehicles that are now being produced in small numbers or have been discontinued, such as station wagons, retro muscle cars, and non-commercial minibuses.
Your budget may further limit your options if you choose to purchase a new vehicle. For instance, if you have a budget of $15,000, you probably won’t be able to buy anything other than a bare-bones subcompact car, which leaves you with only a handful of choices. However, with the same amount of money, you can afford a wide array of vehicles in the used-car market, including higher trims of recent models and previous-generation luxury cars.
With the advancement of automotive technology, vehicles have become more dependable and durable than ever before. It isn’t uncommon for modern cars to run past the 100,000-mile mark without needing a major repair. Therefore, you shouldn’t have trouble finding a reliable used vehicle that still has plenty of life left in it. If you’re looking for a truly dependable vehicle, you may want to consider buying a used late-model or luxury car. A luxury car is a great option because it typically comes with refined components that can last longer than standard components.
In the past, purchasing a used vehicle was a risky affair because you couldn’t know for sure if a car had been in an accident or had sustained major damage. This is no longer a concern, as you can now find out everything you want to know about a specific car by simply getting a vehicle history report. Such a report provides a wide range of information about a vehicle’s past, including its previous owners and accident history. This gives you a clearer insight into the condition and actual value of the car.
If you want to do research before you buy, you can easily find online reviews on any make and model of vehicle that has been released for several years. There are many automotive websites that offer unbiased expert reviews on all kinds of vehicles. You can also find online car forums where owners meet and share honest opinions about their cars.
Another benefit of buying a used vehicle is that it can help you save substantially on auto insurance over the long run. Generally, a vehicle that’s older and less valuable is cheaper to insure because it costs the insurer less to replace it in the event of a total loss. Depending on the age of the vehicle you intend to buy, you can also skip collision and comprehensive coverage to further reduce your car-insurance premium.
The annual vehicle registration fee you need to pay depends on the model year and market value of your vehicle. Usually, this fee is highest in the first three years of ownership, and then levels off after five years. If you purchase a used vehicle that’s more than three years old, you can avoid the highest registration rates and probably save hundreds of dollars.
If you’re planning to buy a used vehicle, browse the huge selection of top-quality vehicles at Exclusive Motorcars. Feel free to contact us if you want to schedule a test drive.