5 Reasons Why a Used Car is a Good Buy
With the amount of used cars Lexington auto dealers have sitting on their lots, it shouldn’t be a surprise the consumer demand for used cars has risen in the past few years. Why? Because in 2016, a used car that’s five years old is from 2011; and that means it’s equipped with modern technology. Even if you just jump back two or 3 years, you have a vehicle that has most of the new technology in current cars.
Along with the modern technology, most of the cars that are considered used are still made with the same reliable modern design; which means they are meant to last. My point is, the cars made in the 2000s are meant to last a long time. With that being said, take a look at these 5 reasons why a used car is a good buy.
Depreciation is when a car leaves a lot, and then begins to lose it’s value. Typically, the vehicle depreciates the most within the first 5 years of ownership. Therefore, buying a used car means you are able to avoid that significant depreciation a new car suffers. Which also means used cars retain their value better than a new car. The minimized depreciation does a couple things; makes you feel good knowing that your investment is actually worthwhile, and it makes trading it in or selling it privately much more profitable. Unlike a new car, which loses a chunk of its value the first time you drive it off the lot.
That means the moment you get your brand new car, and not even put a single mile on it, the value has already dropped significantly; which puts you in negative numbers if you try to sell it back to the dealership for whatever reason. Therefore, a used car is a much more sound investment, and retains its value well.
This is a big advantage of buying a used car, and it compliments the minimal depreciation of a used car nicely. Overall, it costs much less to own a good used car — and unless you buy a used car that constantly has issues — you are guaranteed to save money now and in the long run. The total cost of a used car will cost the same as putting a downpayment on a new car, and won’t have the long-term loan and costly interest rate of a new car. The advised amount to put down on a new vehicle is 20%, which means if you have a vehicle, like a 2016 Chevy Cruze, that costs an MSRP of $16,620, the downpayment would be $3,324. The cost of the downpayment on that vehicle is more than enough to get a decent used car, like a Honda Civic or a Toyota Camry, that will last you for many years.
Along with costing less upfront buying it, it costs much less afterwards as well. When you need to get the vehicle insured, it has the potential to cost less than insuring a new car. The used car is considered to be less valuable to most insurance agencies, and therefore doesn’t warrant as much protection. Unlike a new car, which will be much more expensive because of the shiny new parts that need to be replaced.
On top of the lower-costing insurance, it also costs less to register a used vehicle, because in most states the sales tax is what determines the registration fee. This means that Cruze priced at $16,620 vehicle is going to cost much more to put it on the road when compared to a used vehicle that costs around $3k. Obviously, the sales tax will be significantly higher on the more expensive vehicle.
However, it’s important to note that it’s only cheaper if you get a reliable used vehicle. If you get a car that you are throwing $300-$400 a month at in repairs, you’d be better off putting that amount of money into a new car instead. Which is why it’s important to find a used car that’s in good condition; and thankfully finding a reliable used car is much easier now than it was 10 years ago.
They Are Just As Reliable
Because now and days, cars are built to last. It’s not like buying a car from 1984; where if it has 100,000+ miles on it’s a risky buy. Now and days, a car from 10 years go with 100,000+ miles is just getting warmed up. While that might be a bit of an exaggerated statement, my point is if you took both cars and put them next to each other and drove them to determine which one would last longer, chances are the one from 2006 would. That’s because it’s built with a modern and long-lasting design in mind, along with state-of-the-art materials and technology. Primarily, the design of the engines are vastly superior compared to the ones from the ‘90s, and are meant to run for much longer.
Engineering that promotes longevity for the body and underneath the hood means that a newer-used vehicle will easily have 5-6 years left in it; granted it was well cared for and in good condition.
Similar Safety Features
Also partial to newer-used vehicles are safety features and technology that the vehicles from the ‘90s didn’t have. Safety features like rearview cameras, electronic traction control systems, and lane rear cross traffic alert are possibly in vehicles between 2-5 years old. That means that for a lower price not only are you getting similar reliability and performance, but also the same type of safety features.
It’s expected that a vehicle from 2004 or 2006 might not have the same type of safety features, but take a look at models that are a from 2010 or up. Even though technology progresses quickly, you might be surprised to see the same type of safety features offered.
Less of a Credit Risk
Something that most people don’t think about when buying a new car is how much of a potential credit risk it is. Yes, getting a car with a long-term loan is a good way to start building credit,or getting your bad credit back on track; but what happens if you lose your job in the middle of paying back your car loan? You are left with 36 more months of payments on your loan, and have no way to pay it back fully. Not only will your new car get repossessed, but you will tank your credit score. Failing to make payments on time, especially car payments, is a surefire way to put you in a situation that’s very hard to get out of; because now you need to shop for a vehicle with bad credit — which is much harder than with good credit.
With a used car, you might be able to pay the whole vehicle off up front, or maybe you have a used vehicle with a much shorter loan term and interest rate. This means that you are able pay off your car loan faster, or not owe any money at all if you are able to pay the total cost of the used car upfront.
Like I said before, most of these benefits can only be reaped with the purchase of a used car that’s in good condition. The years and mileage don’t really matter, unless the mileage pushes 250,000, then you might want to look elsewhere. As long as it’s from the 2000s and it was well-cared for, you are sure to find yourself a well-running used car that will last you for years to come.
Along with the long-term reliability, you will also get the added bonus of owning it for much less money with the same benefits of a new car — and it can even look just as flashy.