21
Jul
10

5 Reasons to Buy a Used Car

Buying a used car can save a car buyer a lot of money for various reasons.  Phillip Reed, Edmunds.com’s consumer advice editor states that, he is a big fan of buying a used car because it is an important way for a family on a budget to save money. 

Jack Nerad the executive market analyst at Kelly Blue Book says, “Used cars are a great value.  Cars today are really good and really last a long time.  They have longer useful lives than in the ‘50’s and ‘60’s when I was growing up.”

Not all used cars carry the same value.  A used car shopper really needs to do some research to feel confident about the shape of a potential vehicle he or she is thinking about purchasing.

5 Reasons to Buy a Used Car

  1. Minimizing depreciation– Reed says that a new car typically depreciates about 20 percent once it is driven off of the lot and most vehicles will lose about 10 percent in value during the first year of ownership.  All together that is about a 30 percent loss within the first year of ownership.  You can avoid this loss by buying a one year old used vehicle.  This is why a car that is one years old is a lot harder to find than a vehicle that is two to three years old.  Nerad feels that the best value for your money is to buy a car that is two years old and drive it until you can’t drive it anymore.
  2. Reducing insurance costs- Insurance cost is associated with the value of the vehicle and since used cars are less valuable than that vehicle new it is no wonder that the insurance cost is lower.  Reed says that the insurance cost is lower because you can eliminate some elements of the car insurance such as collision and theft.
  3. Reducing registration fees- Reed says that the charge to register a vehicle is usually based off of the car’s transaction price.  In addition states are increasing the registration fees in an effort to generate more revenue and if you buy a used vehicle it helps reduce those fees.
  4. Getting more bang for your buck- When you buy a used vehicle you are able to buy better vehicle than if you were to buy it new.  For example, you may not be able to purchase a new luxury vehicle that you have always wanted, but two or three years old luxury vehicle could be in your budget.  Reed states that, “We used to think that a 100,000 mile car was done.  Now they are running to 200,000 miles.  That’s like a second life.”  Nerad feels that because carmakers aren’t redesigning their models every year like they use to so buying a used car really doesn’t carry the same stigma. 
  5. Keeping your peace of mind- Back in the day buying a used car was considered to be “buying someone else’s problems.” But rest assured that now we have information to be able to distinguish if it truly is “someone else’s problem.”Companies like AutoCheck make vehicle history reports giving potential customers valuable information on the state of the used car. If you are worried about the possible risk in buying a “lemon” you can buy a certified pre-owned car. Certified pre-owned vehicles have established manufacturer’s standards and have some sort of guarantee against defects.

To read the full article on Bankrate.com, please click here.


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