Here, we’ll take a look at 10 of the top reasons why you might want to consider shopping for a pre-owned vehicle as your next car instead of buying a new car, and show you how to take advantage of the cost savings of a used car when car buying.
10 Good Reasons to Buy a Used Car
- You can use depreciation to your advantage
- Your dollars may unlock fancier brands and models, too
- There’s so much more variety in the used car market
- You can still buy peace of mind with CPO
- You can leverage the data
- In general, cars last longer these days
- You may save on car insurance
- Vehicle history reports can tell a car’s story
- Parts and servicing are a cinch
- You don’t need to worry about dents and scratches
1. You can use depreciation to your advantage
There’s an old expression that a new car loses half of its value when you drive it off the lot. That’s not quite accurate, though it’s not too far from the truth when it comes to the price of a car.
Cars generally lose about half their value by the time they’re three years old. That's when a typical model is out of its comprehensive bumper-to-bumper warranty period. If you take advantage of depreciation when buying a pre-owned car, you’ll get more car for your money.
If your budget only stretches to the base trim level of a new SUV, you might be able to afford the lower price of a fully loaded used SUV. This is especially appealing if you find yourself looking at a model that hasn't been redesigned in the last few years. A used vehicle might look just like a brand-new one until you look at its odometer.
Additionally, the amount you may need to budget for a down payment will be less than for a new vehicle. But if you spend less on a used car, you will also pay less sales tax.
2. Your dollars may unlock fancier brands and models, too
A new luxury car may be out of reach, but a used one could fall within your budget. Luxury models tend to see hefty depreciation, at least compared to mainstream brands. You'll get more car for your monthly payment with used.
Those high-end models do have higher maintenance costs and they don't usually qualify for the lowest-interest auto loans. If this is a road you want to pursue, however, have a conversation with your lender or credit union about your financing options before you arrive at the dealer.
With all this in mind, you may need to budget accordingly.
3. There’s so much more variety in the used car market
This is simple math: the pool of used cars is larger than the pool of new car inventories at dealerships.
An especially savvy shopper can often net an especially good deal on a model that an automaker has discontinued. Cars that didn't sell well on the new car market, like the Kia Stinger and Cadillac CT6, offer tremendous value on the used car market. They have lost a lot of value compared to similar vehicles from other manufacturers.
4. You can still buy peace of mind with CPO
Nearly every automaker offers the opportunity to make a car purchase through a Certified Pre-Owned program. These vehicles have undergone a thorough inspection and must meet criteria for age, condition and mileage. Their purchase price includes proof of that inspection, a vehicle history report, and a warranty that may extend well beyond the original coverage.
Automakers often offer special car loan deals on CPO models, too.
5. You can leverage the data
More than ever, car buyers have access to a mountain of used-car pricing data. The CarGurus Instant Market Value tool figures out what a car is worth by comparing active listings. This helps shoppers determine whether car deals are good or bad. With data tools like this, CarGurus makes sure that you don’t overpay for a used car.
6. In general, cars last longer these days
These days, we worry far less about vehicle mileage than we used to for a simple reason: cars last far longer today.
If you want proof, consider that automakers offer substantial powertrain and comprehensive warranties on their new vehicles. Automakers can only justify these warranties if they know that they won’t have to spend a fortune upfront when fixing these relatively new cars.
You can easily find a pre-owned vehicle that will offer all the infotainment functionality that you want, has fuel efficiency on par with new vehicles, and looks nearly brand new. Many automakers offer roadside assistance on Certified Pre-Owned vehicles as well.
7. You may save on car insurance
Used cars are generally worth less than their brand-new counterparts, so it stands to reason that their insurance costs are lower, too. By going used, you may save even more money than you realize. In addition to lower insurance rates, your registration fees might be lower as well.
8. Vehicle history reports can tell a car’s story
Car dealerships typically provide __vehicle history report__s from CarFax or AutoCheck. These reports usually include up-to-date data on service history, any accidents, and the number of owners.
Don't just skim a vehicle history report. Look at it closely to see if the car has had regular maintenance by a reputable shop. Pay attention to how many owners a car has had and look at its registration history. A car that lived in snowy Minneapolis may have rust issues, while one from sunny Phoenix could have faded paint.
After you test drive the car you want, it is always smart to perform a pre-purchase inspection to avoid any potential problems. That may reveal more than the previous owner is willing to share.
9. Parts and servicing are a cinch
New cars can have problems, especially if a model is in its first year on the market.
A car that has been available for some time will already have a large aftermarket community to support it. This resource can help a used car buyer or mechanic pinpoint and subsequently solve specific problems. You can also turn to the CarGurus Questions section for answers to many of your queries.
And you can always get an extended warranty on a used car, too.
10. You don’t need to worry about dents and scratches
It’s used! That means you won’t feel so paranoid about a brand-new car getting its first rock chip or door ding. There's something reassuring about not being the first one to scuff up a car.
One of the cons of buying used is that you don’t get that new car smell. But that scent is available from numerous spray bottles widely available on the Internet!
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