A brand-new car has captured your attention. An ad has just convinced you that you need a new car. But no matter how you compute the expenses in your head, you know the price is just something you can’t afford. Worry not, as buying brand new isn’t the only means for you to become a car owner. There’s an alternative that’s just as good and is even better than buying new: opting for a used car.
Buying a used car can give you the same satisfaction as buying a brand new one. For instance, used Honda cars offer the same purpose for your needs, and they come along with a host of other advantages you just can’t overlook.
These are some of the reasons why buying a used car is better than buying a brand new one:
1. It Costs Less
Topping this list is the obvious difference in the price. Because you’re already buying a used car, the cost of one will be significantly lower than a brand-new car. If you’re on a tight budget, then this is a big advantage to enjoy. Remember that cars depreciate quite fast. It’s not worth getting yourself into a long financial turmoil just to keep up with the expense of paying for the car.
With this lower sticker price also comes another advantage: you may be able to buy a car of a more expensive variant than you previously wouldn’t have had afforded to pay for, if you opted for a brand-new car. Or perhaps, you can try a bigger car that can grow with you and your family’s needs. With the savings alone, you’re already getting yourself a practical purchase.
2. It Has Already Gone Through Depreciation
Cars depreciate fast. And when you buy a brand-new car, you’re also paying for a bulk of its depreciation. Remember that by the time you bring out the car from the dealership, its classification will automatically change from ‘new’ to ‘used,’ and as much as 20% of its value will be reduced.
When you buy a used car, a bulk of the depreciation has already occurred. This means you’re not paying for the portion of the car’s value that falls into the depreciated value. Most used cars are sold around the second to third-year mark, and that means you’re no longer paying for the value of depreciation lost on those years.
3. It May Lead To Lower Insurance Rates
Because the sticker price and value of the car are also lower, this would mean lower insurance rates. Generally, insurance companies base the amount payable of the insurance on the car’s value.
Because the car’s value is now lower, the insurance premiums will be lower as well. This fact is advantageous as it means less impact on your budget. Car insurance, particularly for brand-new cars, can be very expensive.
When you’re buying a car, don’t just think about the payment per se as that’s not the only financial obligation you’re going to face. As an inherent part of car ownership, there’s also the insurance expense. You’ve got to ensure these payments won’t hurt your monthly or annual budget.
4. It Leads You To A Smaller Loan Amount
Because the value of the car is smaller, if you have to take out a loan to pay for your chosen vehicle, the loan amount will be significantly lower as well. This brings about a host of so many other advantages like a lower interest rate. Surely, you wouldn’t want to spend your hard-earned money paying for high interest rates. Along with that, the monthly payments for your car will be lesser as well.
If you’re going to take out a loan to pay for your car, the best rule of thumb to follow is to not settle for the minimum down payment amount. If you can afford to give more than that, then put in as much as you can. This can open you up further to even lower monthly payments and interest rates.
Conclusion
With the advantages mentioned above, are you now better convinced that buying used cars is the best option? In closing, however, it’s important to highlight that these advantages aren’t necessarily absolute. You can only enjoy them, for as long as you also put in the right amount of research and preparation into your buying process.
There are so many used cars sellers, and not everyone will allow you to enjoy the advantages above. Be thorough and only purchase from a reputable seller. By doing so, your purchase of a used car can be just as good as a brand new one.
