When you decide to buy a replacement vehicle, you have two options: new or used. Many people choose new. They may think that the car will last longer. They might think it is the better overall decision. Let’s look at why buying a used car is the smarter decision.
It Is the Better Financial Decision
That new car depreciates the moment you drive it off the lot. In fact, it loses about 10 percent of its value just because you drove it off the lot. It loses up to 20 percent of its value in the first year. If you buy a used car, most of the depreciation has already occurred. The car’s value is now based on its mileage and its current condition. Its value won’t go down much unless you drive the wheels off of it.
Nor do you have to choose between a new and very used car. You could buy a one or two year old car and pay far less than the list price, but you can drive it for a decade or more. Get over new car fever, and your entire financial situation can change for the better. For example, you won’t be tempted to trade in cars every 12 to 36 months. And you won’t be stuck with a perpetual 500 to 700 monthly payment. Buy a used car and pay it off, and you’ll suddenly have money to pay off credit card debt, save and invest.
You Might Be Able to Afford More Car
If you are willing to consider El Paso used cars, you will find that you can afford “more” car. You might be able to afford that third row seat in the minivan or larger truck bed, if you buy used instead of new. Alternatively, you might be able to afford a luxury car if you buy it used, while a new luxury car is beyond your reach. Or you could buy a one or two year old version of the new car you wanted, and you have more money every month to spend on other things you want. Whether that’s a roadside assistance program or car detailing every month is your decision.
You Know More about the Vehicle
New cars come with a risk few of us fully appreciate. You don’t know the reliability of the car model until it has been out for a while. This is why first year models of any car are the most unreliable, especially when it comes to their transmission.
If the car is two or more years old, its reliability and dependability have been established. Furthermore, you can determine if the car has had any recall work done. You should take any used car to a mechanic for a thorough assessment and run a vehicle history report to make sure it wasn’t totaled. However, this gives you more insight as to its real condition than a new car that you think is problem-free.
The Overall Cost of Ownership Is Lower
Auto insurance rates are based on the repair and replacement value of the vehicle. A used car is typically cheaper to insure. On the flipside, you don’t have to worry about getting insurance to cover the difference between the amount insurance pays out if the car is totaled and what you owe on it. And you’re going to pay the same amount in gas and tolls for a used car as a new car.