I recently wrote about the benefits of buying a new car, but often, used cars are actually the better deal. Here is why:
Used Cars Are a Better Deal than New Cars
Depreciation: Most cars depreciate 20-30% during the first 2 years of ownership. Why should you spend your hard earned money when you can let someone else take the loss instead?
More bang for your buck (and I don’t mean backfiring!): You can often afford to buy a better car with more options than you would be able to buy if you bought a new car. For example, let’s say you have a $20,000 budget for a car. You can buy a decent new car, with few options. But if you are willing to buy a 2-3 year old used car, you can generally get a model higher with more options – some of which would normally add hundreds or even thousands of dollars to the tab on a new car, such as a moon roof, 6 disk changer, alloy wheels, heated seats, etc.
Quality is always improving: A couple decades ago, “used car” was synonymous with “junk.” Cars were disposable objects designed to last 10 years at most. Today’s cars will last a lot longer if you take care of them. There is no reason that you can’t buy a 2-3 year old car and not expect to drive it for at least 7-10 years before you trade it in because you are tired of it – not because it is falling apart.
Extended warranties: More and more manufacturers are offering certified used cars and extended warranties. These options may add a few extra dollars to the upfront costs, but can potentially save you hundreds or thousands of dollars down the road. They also give you the piece of mind to know that if something under warranty goes wrong, you won’t be on the hook for the total cost.
That new car small goes away: In 6 months, you probably won’t know the difference anyway. After a few months the new car smell is gone, you will have spilled your coffee on the floor once or twice, your shoes will drag dirt into the carpets, and your kids… well, they will be kids! To be honest, you probably won’t mind as much if these things happen to a used car because it is expected. But if they happen to your new car… well, that just causes stress! In fact, many people who buy new cars are so paranoid about things happening to their car that they don’t enjoy them as much as they should. It’s a car; not a museum piece.
Which should you buy? As I already mentioned, I wrote about the benefits of buying a new car, now I’m telling you to go buy a used car. Which should you do? I think you should research your options and choose the best decision for your situation.
photo credit: mzacha.