Unlike in purchasing a new car model, you won’t have to shell out a large sum of money for the upfront fee and the monthly loan payment.
On top of that, there are other good reasons why it’s better to invest in a second-hand car. We’ve gathered all of these benefits below.
Minimise depreciation cost
Buying a new car can cost you a lot of money, most especially if you want to purchase luxury brands or models.
Unfortunately, the value of a new vehicle tends to depreciate quickly. According to Carfax, the value of a new car drops by 20 percent after 12 months of purchase. In the following months, the car will cost 40 percent lesser than it’s original purchasing price.
To determine the depreciation rate of your auto, try to look for an online calculator. Most online calculators provide a rough estimate of the depreciated value of a certain vehicle given a particular set of conditions.
If you intend to switch to a new vehicle after you complete your car loan, it’s better for you to buy a used car. It will help you save and generate the funds needed for a new auto.
Reduce your insurance premiums
Car insurance provides protection against damages, car theft, collisions and other potential issues. It is an extra cost for many people, but it helps keep the driver, passengers and other drivers safe. Also, it is required by the law.
If you want to avoid paying high insurance premiums, buying a used vehicle is your best option. It’s cheaper to insure a used car because it costs lesser. If your car is old enough, you may opt to remove the premiums for coverage for theft and collision. You can consult your agent about this option.
Minimise the registration fee you need to pay
Similar to the car insurance premiums, the registration fee for used vehicles is also based on the car’s current value. As such, if you own an old and used car, you won’t need to settle expensive registration fees.
However, you need to ensure that you tax the used vehicle to avoid additional costs.
Use the reference number from the warning letter you receive from the Driver and Vehicle Licensing Agency, your vehicle log book (V5C), or green slip (V5C/2).
You can register the vehicle online or via post. If you wish to register it online, ask the car seller to help you. He/she will need to fill in the New Keeper Supplement or section 10 of the application form.
If you will do it by post, you must ask the seller to fill the new keeper details section of the V5C.
Get more from your money
As pointed out earlier, opting for a used car allows you to get more bang for your buck. Maybe you can’t afford the latest luxury car because of your current financial status, but you perhaps you have enough to buy a used version.
You get to enjoy the same features you want without spending too much. You use the money you saved on other essential car expenses such as servicing fees or car insurance premiums.
Tips in buying a used vehicle
While you can get a lot of benefits from a purchasing second-hand auto, you still need to be extra careful when you start shopping around.
First of all, you must set your budget. This will help you narrow down your option faster. Make sure that you stick with your budget to avoid purchasing a vehicle that you can’t afford. If you fail to settle the monthly financing payments, you will incur high penalties.
Also, you need to run a detailed study. Find out what car models suit your needs and goals. You need to have at least five options to choose from. Then, determine if the car dealership in your city offers these car models.
Contact them for a test drive and ask for a history report. They might be able to provide the history report for free. If not, try to find a company who can do it for you.
The report contains information on the previous owners, tax liens, airbag deployments, accident reports, flood damage, defective odometer records, title history issues, and more.
Lastly, enlist the help of a professional mechanic. He needs to determine if the car is in good condition.
Are there any damages to the engine? How bad is the damage? How much will the repair cost? Determine if it’s a good investment before you complete the purchase. If it doesn’t meet your standards, learn to walk away.
Once you have everything sorted out, you can purchase the right vehicle for you.
A lot of drivers prefer to take home a used vehicle because of many practical reasons.
Our guide above has discussed all the top benefits that you can get. If you’re planning on buying a vehicle, consider getting a used car.
Don’t forget to bring a skilled mechanic to ensure that you purchase the best second-hand auto.
Cat is a writer that lives in merry old England. Being raised in a family of car mechanics and salesmen, she has been exposed to engine grease and vehicle smoke ever since she was little. By day she works for Quoteradar and by night she contributes to websites that feature car blogs.