I am now a believer in buying used cars. (Yes, I know, the term now is “Pre-Owned”, but I’m still hard-wired to say “Used”!) I bought my first, and current, used car in December, 2012, a 2007 Toyota Corolla, and it’s still going strong.
There are a number of things which I’ve learned that are better buying used, and I do mention cars being among them in my post, “Used vs New: Which is Best to Buy?” Now, here are the reasons why.
First, used cars are cheaper! This is true for most things, as a matter of fact, but cars are special, in that they are often the most or second most expensive item that people buy, and new cars depreciate greatly from the moment you drive one off the showroom floor.
In my case, for my previous car, which I bought new, I paid roughly $20k. I had the car for 7 years before it was totaled. That comes out to about $2,860 “paid” for each year I had the car. And mind you, I was able to pay the entire amount at that time, so I had no car payments to make and thus saved possibly $5k-10k in interest!
I paid $10k out the door for my current used car, which would have also been $20k when new, and have now had it for about 3 years come this December. At that point, that would be roughly $3,333 for each year. By June, 2016, I will be breaking even in comparison to my previous car, in only 3 and half years! When I’ve owned my current car for 7 years, the same amount of time I had my previous car, it will come down to $1,430 “paid” per year!
And another way in which I come out ahead: I paid $10k less for a good car, than what I paid 7 years earlier, despite inflation over that time! In a way, that’s $10k to the good for me!
Next, related to the first, is that you have less of an investment to lose. I’m given to understand that new cars will have the most depreciation within the first two years. So, with a used car two years old or more, it’s possible you’ve got a car that has had most of its depreciation. So if you decide to sell it down the road (pun intended!), you may recover a much larger proportion of the money you spent to buy the car and, in some cases, you may even come out ahead!
Then, used cars tend to be cheaper to insure. When I got each of my new cars previously, my rates always went up. With my current car, they didn’t.
Now, one thing is, you must do some research and also make sure you get any used car you’re thinking of buying, inspected by a trusted mechanic. If you do, you’re more likely to reap the benefits I’ve just described.
But, even if you test drive a used car you like and are just satisfied that it starts and runs, you may still be saving money even if you do end up going to the repair shop a little more often in the beginning. (Do note, even if you do your due diligence, the used car you buy may need some work.)
Many say that buying a used car is buying someone else’s problem. But, think about this. If you’re paying $300 or more a month for that new car, month after month for 36-72 months, do you think that you’ll be paying that much every month in repairs for the used car you could buy instead at half the price? My bet is that you will not, especially if you do your due diligence when shopping for that cheaper used car. Just something to think about.
Finally, while I don’t plan on any big modifications on my car, I feel that I can modify the car as I please without that feeling of “messing new things up”.
So, these are my primary reasons for preferring used cars, and have made my motoring a lot happier!
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