Whether you are buying new or used, a new car is always a significant investment. This means that you’ll want to do it right to save you any headaches further down the line. Buying a used car isn’t necessarily the most glamorous, but if your ultimate goal is to save yourself some money while getting the most for your budget, buying used could save you a lot of money.
Sure, buying new and used both come with their pros and cons but here are three key reasons why buying used might be the best option for you.
Minimising depreciation
Avoiding a lot of depreciation is probably the number one reason to buy a used car instead of a brand new one straight from the dealership. Cars always depreciate over time, but a brand new car can lose up to 20% of its value as soon as it’s driven off the dealership lot, even though it is still as good as new. When you add that most new cars will lose another 10% in their first year, this always makes buying a new car a bad idea investment wise. Depreciation will vary depending on the model, as some lose value quicker than others, but consumers can expect that a new car will lose up to 50% of its value within the first three years. Buying a used car will, therefore, save you a lot of money without you losing out on quality. While finding a year old used car that’s up for sale is hard to come by, if you look hard enough, you can find deals on vehicles that are only two or three years old. These cars will most likely still be nearly as good as new and will have the same features as the brand new model in the dealership, potentially saving you thousands.
Lower insurance costs and registrations fees
The car’s value is the key to determining the cost of car insurance, so the cheaper the car, the more affordable the insurance. Due to their inevitable depreciation, used cars are financially less valuable than their brand new counterparts, resulting in much cheaper insurance. This is a particularly smart way to get more affordable insurance for young adults, who are typically faced with very high insurance rates due to being deemed more of a risk. Older cars often cost less in registration fees as well, as these are also more often than not, based on the value of your vehicle, resulting in a two for one on savings.
Getting more for your money
Even though you might not be able to afford the brand new car of your absolute dreams right now, that doesn’t mean that you can’t buy something very similar and even significantly fancier, that’s simply a few years older. Shopping for a used car can be a lot more fun, as thanks to depreciation, the money and budget that you do have can take you a lot further compared to if you were buying new. Your budget might only stretch to the very basics of your favourite model with limited features in the new car market, but if you shop around and look for that model a few years ago, that same budget might be able to afford you something at mid to top-level instead. Speaking of budget, there are also many motor service companies, such as Sutton Motor Services Ltd, who can help you secure the best financial deal for your budget if you need extra help with your finances.