Did you know more than half of all car buyers opt for a used vehicle? Since buying a car is no small investment, a lower price often drives buyers to pre-owned options, but other factors should be taken into consideration, as well. Here are some advantages and disadvantages to choosing used over new.
The Pros of Buying a Used Car
Almost every positive aspect of used vehicles involves price. First, once a car is driven off the lot, it depreciates. In fact, most lose an average of 20 percent value within the first year; that number rises to 40 percent after three years. This rapid decline means added value for anyone looking to buy a used car, especially if you want to pay cash and avoid interest. Even if you finance, a smaller loan amount means less debt, which is always a plus. And of course, this means you can pay off the loan quicker and budget for other necessities. In addition, since used cars have a lower overall value, they are cheaper to insure, making them ideal for young or high-risk drivers who pay higher rates.
Aside from cost, industry improvements in dependability and quality mean consumers have more viable used car options than ever. With top-tier brands like Toyota, Honda, Ford and Hyundai making vehicles that can drive more than 200,000 miles, you can buy used and still keep the car for 5-7 years. That statistic is difficult to ignore.
The Cons of Buying a Used Car
Yes, carmakers have exceeded expectations when it comes to generating long-lasting cars, but there remains an element of risk when buying used. You can get a history report that outlines previous service, accidents and title status, and you might even get more information from the seller. Beyond these basics, however, you might never know exactly how previous drivers treated the vehicle. And the risk doesn’t only extend to buyers. Often, lenders charge higher interest rates for used purchases to offset their exposure.
In some cases, used vehicles may not come with a warranty, which makes you especially vulnerable to inconvenient and costly repairs. While dealerships might provide their own warranties, private party transactions rarely do.
The Verdict
Familiarizing yourself with both sides is a solid starting point, but if you’re seriously considering buying a used vehicle, you should thoroughly research current options (expert and consumer reviews can help) and talk to local dealerships about financing options and warranties.
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