August 16, 2017 at 5:06 PM
It goes without saying that buying a brand new car costs much more than buying second hand. And there are plenty of reasons why. It's important to note that cars these days have much longer useful lives. That means used cars can provide greater value than ever before. Nonetheless, not all used cars are equal. It's up to every prospective car buyer to do some research before investing in a second-hand vehicle.
All cars depreciate. But they still lose most of their value in the early years of their lifespan. While levels of depreciation vary from one car to another, most new cars can lose up to half their value within three to four years of being driven off the lot. Therefore, buying a new car as an investment for your business or as a first-time car owner may not be a wise idea.
Thanks to Certified Pre-Owned (CPO) programs, buying a used car comes with greater peace of mind. CPO programs vary with different manufacturers and dealerships, but they offer some great packages. Cars sold through CPO programs are well maintained; they have low mileage and are well cared for.
Another good thing is that you can always obtain a vehicle's history report by simply running its Vehicle Identification Number (VIN). Vehicle history reports should provide accurate and up-to-date data on anytime the vehicle has an accident, changes hands or is repaired among other important details. A bad history report can save you from buying a lemon while a good history report will make you sleep better at night.
Insurance costs are primarily based on the value of a car. Therefore, a new car will cost relatively more to insure compared to a used car. Moreover, you can save more with an old car by dropping some elements of insurance.
There's the potential to save on registration fees as older cars often cost less to register than new ones. In fact, many jurisdictions are increasing registration fees to increase revenue earnings. There are also annual vehicle taxes, which are based on the engine size and when the vehicle was registered.
Due to the high rate of depreciation on new cars, buying used can translate to better value for your money. If you're on a tight budget, you may only afford an entry level car in the new market. But shopping used can buy you that luxurious and better-equipped car you've always dreamed of owning.