New cars are great to own, but they can cost a lot of money. There are typically high transaction fees associated with buying a brand new vehicle, and nearly every vehicle loses part of its value the moment you drive it off the lot. If you’re looking for a budget-friendly car purchase, you should consider a used vehicle. Below are some reasons why.
You Can Purchase Nearly New Cars
As soon as someone purchases a new vehicle and drives it off the lot, its value decreases. Some car buyers decide after a few months that the vehicle they purchased is not one they want to keep around. Many trade in a recently-purchased car to get a new one they will appreciate more. This common scenario contributes to a market of almost-new cars with low mileage and only a couple years of wear. There are used cars on the market that are essentially new for a much lower price than their brand-new counterparts. These nearly-new cars can be excellent investments for the savvy car buyer. While some almost-new cars are on the market simply because their owners wanted something new, many more are formerly leased vehicles. People lease new vehicles because they want to drive a new car with relatively low monthly payments. Currently, the average lease term is 36 months, and many people choose not to purchase the car after their lease is up. These cars then end up on the used car market. They can be well-cared-for, have low mileage and may be great options for nearly new purchases.
Used Cars Cost Less to Insure
Insurance companies charge less for comprehensive and collision coverage the older the vehicle you cover. Instead of spending a lot of money on financing and insuring a new vehicle, you can save hundreds a month on insuring an older model. After just a couple of years insurance coverage drops significantly. Look up quotes online and you will see that there is a big difference between a brand-new vehicle and one that is a few years old. When you purchase a vehicle, you should pay attention to how much it would cost to insure it in addition to your financing options. You want to save as much money as possible and not put yourself at financial risk.
Take Some Precautions
Find a used car with a Carfax report. Learn about the history of the vehicle and whether or not it’s been in a collision. You can also view how many previous people owned a particular vehicle to get a sense of its history. Clean cars with good Carfax reports and low mileage are ideal when it comes to purchasing a used vehicle.