Buying a car is one of the most eventful occasions of your life — also one of the most expensive ones. Having a car is a necessity but it doesn’t have to burn a hole in your pocket. If you are low on money, then opt for a used car instead of a new one. If you don’t have the required budget, take a used car loan. In this article, we will look at 5 advantages of buying a used car instead of a new one.
Lower Price and Depreciation
It goes without saying that a used car will cost less than a brand new car. What’s more — the used car price will allow you to step up to a nicer model too.
Secondly, the value of a new car depreciates as soon as you leave the shop. And it keeps declining with each passing mile and month — with some new models losing almost 40% of their value in the first year. No such problem with a used car as there is no depreciation with it. Moreover, you won’t go into a tizzy if the car gets a dent or paint scratch.
Lower Insurance Rates
Insurance rates are affected by the age of a car. It will be more expensive to insure a new car, whereas, for the used vehicle it will be less expensive. The newer the car, the bigger is the risk to the insurer if it gets into an accident. When you switch from one used car to another, your premium won’t increase at all or it may rise by a negligible amount. Just ensure that the second-hand car doesn’t have a lien on it.
Lower Customization Costs
One of the sneakiest things that car dealers do when you buy a new car is to push you to add extra features to make the car more appealing. In most cases, you could do without those features but you would be tempted to customize the car anyway after listening to the dealers. With a second-hand car, you won’t have to settle for expensive dealership add-ons. You may install your own at a lower cost than on a new car.
Low Registration Fees
New cars are more expensive to tax and register as the annual registration fee is based on the car’s value and its model year. The rate is usually the highest in the first three years and levels off after five years. By opting for a car that is at least three years old, you can save money by avoiding new and annual registration fee. Much older cars may even be subject to discounted taxes.
Certified and Inspected
Certified Pre-Owned vehicles will be thoroughly inspected, refurbished, and certified by the manufacturer or other certifying authority, thus assuring the vehicle is of high quality. Moreover, certified pre-owned vehicles will mostly have an extended warranty, special financing and other benefits.
Now that you know the advantages of opting for a used car, you can apply for a used car loan to buy one and enjoy the freedom that comes with having your own car.
Author Bio: Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at firstname.lastname@example.org.