Used Cars – Are they Worth It?
Buying a used car is typically the cheaper option, according to Hearst Autos Research. An older model can cost as little as half of a newer one. Used cars also have cheaper insurance costs and higher resale values, which reduces the cost of monthly payments.
There are a few disadvantages in buying a pre-owned car; lack of reliability, age and replacement part scarcity are just a few.. The vehicle’s owner history is also worth considering, as previous crashes and damages are not always disclosed to new owners. Finally, depending on available inventory, models and colors might be limited, reducing customization potential.
New cars are a different story
There’s no need to evaluate the condition of a new car or worry about previous issues, as most come with a guarantee of reliability for at least a few years. There are also more financing options available with car loans with attractive interest rates and incentives that can be gained. New cars also come with the latest and greatest features. Buyers also don’t need to make compromises on models; they can get whatever they want. And who doesn’t love that new car smell?
While it sounds like a dream to buy a new car, there are some downsides as well. A new car’s value depreciates by 20% in the first year of ownership, tossing away thousands of dollars, according to CarFax. In addition, insurance costs are higher for new cars, according to insurance company Liberty Mutual.
Things to consider
It’s important for car shoppers to really do their research before making this big purchase. According to Yahoo! Finance, consumers should consider all the expenses involved in purchasing a car including insurance, cost of repairs and maintenance, gas, registration fees and car payments. If someone really wants a used BMW for example, they should consider the costs of replacement parts. Replacement costs for sports cars are much higher compared to non-sports cars, which may not be affordable in the long run.
In the end, it all comes down to budget and what is most important to the buyer. Consumer Reports advises to do extensive research, crunch the numbers and be willing to compromise.
Some resources to help inform car buying decisions:
– CarFax
– Consumer Reports for ratings and information
Sincerely,
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