When you’re car shopping, it’s tempting to go with something new. You’re the only one to ever drive it, it has that new car smell, you can get all the latest features and dealers offer enticing financing offers. You can get a low interest rate, and you may not even need to put any money down.
Despite the perks of buying a new car, used cars are the much better option. Here are the biggest benefits of buying a used car instead of a new car.
1. More Car for Your Money
The most obvious difference between used and new cars is the price. A used car that’s between five and 10 years old could cost half as much as the exact same make and model costs new. Even if you only buy a car that’s one-year old, you’ll still save thousands, and the car will have many of the same features.
By going the used route, you could also get a superior car for the same price you were going to pay for a new car. Instead of getting a new Honda or Toyota, you could get a used luxury car. No matter what type of car you buy, you’ll get more when you buy used.
2. Fewer Extra Costs
The price difference isn’t the only way that used cars save you money. You won’t end up paying for any of those extras that dealers try to tack on. Registration costs are higher on newer cars, which means you’ll pay less registering a used car. Don’t forget about sales tax, either, which can drive the cost of a new car up considerably. There are quite a few states where you don’t need to pay sales tax if you buy a used car from a private party.
3. Better Value
When it comes to value, cars are almost never a good investment. Unless a car is a classic, it’s going to depreciate year after year. However, new cars are much worse in this regard than used cars.
The majority of a car’s depreciation occurs when you drive it off the lot and during the first three years of its lifespan. The moment you take possession of a new car, it becomes a used car, which can take thousands off its value. Its value will then decrease drastically over those first three years.
With a used car, you’re buying it after it has gone through that initial depreciation. It won’t lose its value as quickly after that, meaning you lose less.
4. Lower Insurance
One of the most significant factors insurance companies use to determine premiums is the value of the car. Since new cars have a higher value than comparable used cars, you’ll pay less for insurance every month on a used car.
You can save even more on insurance by avoiding certain policy options that are often necessary or highly recommended with new cars. For example, if you get a loan to buy a new car, you may need theft insurance, but you can get rid of that with a used car if you want.
Gap insurance is also common with a new car. This covers the difference between the value of the car and what you have left on your car loan if it’s totaled. Let’s say you buy a car for $25,000 and total it when you’ve paid your loan down to $23,000. Because of how quickly new cars lose value, that car may only be worth $21,000 at that point, leaving you short $2,000. Gap insurance covers that gap for you, but it costs extra, and you won’t need it with a used car.
5. Wider Selection
There are plenty of new cars on the market, but the fact remains that when you’re shopping for a new car, you’re limited to the current model year and you need to buy it from a dealer. When you shop for a used car, you have many more options. If you like a model that was discontinued, you can look for that. You can buy from a private party and likely save even more money over what you’d pay at a dealer, plus you won’t have a car salesman pressuring you to make a deal.
Customers have often gone with new cars for peace of mind because those cars are more reliable. But technology is getting better and better. Many cars from the last decade can last to 200,000 miles or more when maintained properly. If you’re looking for your next vehicle, going used is a sound decision. You can still get a great car and spend much less than you would with a new car.