Sign the paperwork for a brand-new vehicle, drive it off the lot, take a short ride around the city, then try to return the car to the dealership. The vehicle isn’t new anymore, it’s a used car. And because it’s a used car, it’s worth significantly less than what you just paid for it an hour prior.
While some makes hold their value longer, on average most shoppers can expect a new car to lose up to 54% of its value within the first three years. For all the perks that buying a new vehicle comes with, depreciation remains a substantial factor, and is a great reason to buy used instead.
Thanks to that pesky depreciation, your budget can go a lot further in the used car market than it would if you were to buy new! If your budget is only getting you an entry level (or base) new vehicle, that same budget in the used car market could get you more features, and equipment. At the same time, a lightly used Audi or BMW will be at a similar price point with that of a new Kia or Hyundai. Whether you’re looking for a better brand, or just more features, your money will take you further in the used car market.
Your vehicle’s value a primary factor in your insurance premiums. The more valuable your vehicle, the more money the insurance company would have to pay out in the event of an incident. Thanks to depreciation, you might not notice the difference between your three-year-old Bentley and a brand new one, but your insurance company will!
Remember in the 70’s when cars only had a 5 digit odometer? There’s a reason our odometers are digital! Modern vehicles are built to last longer than ever. According to IHS Automotive, by mid-2015, the average vehicle driving on American roads reached a record high of 11.5 years of age. That number is continually rising, which means you can save thousands of dollars and still expect a long life from your used car.
Thanks to low payment options, leasing is becoming increasingly popular. Most leases are written for a short term, and include strict restrictions pertaining to mileage, vehicle maintenance, and overall condition. This means, people must take good care of the vehicle, or face expensive penalties at the end of the lease. When the lease ends, vehicles are often returned, and the returned vehicle must find a new home. That new home, is a used car lot!
This means you get a ‘like new’ vehicle, with low mileage, and up-to-date maintenance records, and you still save thousands!
The downside to buying used is that you haven’t been there to oversee the complete history of the vehicle, and it’s care. The good news is that today’s vehicles are better than ever. All vehicles have an online history report. These reports tell you important details about the used vehicle such as; how many owners it’s had, the previous registration status and location, accident claims, flood or hail damages, and service history.
Low financing rates and warranty options have been a motivating factor in car purchases for years! While it’s true that you will typically pay a higher interest rate on a used vehicle loan than on a new vehicle loan, historically low rates mean that dealers can offer lower than ever financing rates on used vehicles! Many dealers also offer warranties on their used vehicles. Bonus; these warranties usually don’t have the same kilometer restrictions that are imposed on new vehicles. That’s a win!
Ah, data. This is where buying used has a huge advantage. When you buy new, there’s no data on your vehicle – no one has owned it for long enough to form an opinion, or trend. Often, you will have to deal with recalls, and other unexpected setbacks. When you buy used there are online communities, blogs, and forums devoted solely to your new car! Here you can learn common issues, complaints, service schedules, and more from your online community.
Moreover, time and history have allowed the internet to form averages on asking prices. This can help you form estimates on how much a particular vehicle should cost, ensuring that you don’t overpay for your next ride!
Shopping for a new vehicle can sometimes seem overwhelming. We are committed to providing you with the information you need to make an informed decision. Whether you purchase here, or elsewhere. We want to make the process as painless as possible!
Speak with a specialist today!