When you are shopping for a new car, the brand new cars at the dealerships may tempt you. Many people believe that buying a brand new car is a great option because of the reliability. It is easy to pick the color and the features that you want, and you can negotiate with the dealer for a deal on the overall package. However, it is a good idea to consider buying a used car instead of a new car. Here are five reasons why.
New Cars Depreciate in Value Much More Quickly Than Used Cars
A car depreciates in value the minute you drive it off of the lot. According to Edmunds.com, many cars depreciate about nine percent as soon as you drive it. By the time five years have passed, the car depreciates sixty percent from the sticker price. This means you can only sell for less than half of what you paid for it. Unless you have money to throw away, you can buy a used car and have a much lower depreciation rate.
Used Cars Are Much More Reliable
Although you may have a bit more maintenance once you go over 100,000 miles, Forbes reports that most cars are reliable up to about 250,000 miles without a lot of work. If you are worried about the reliability of the car you are going to buy, take it to your mechanic before you make the purchase and have him look it over. Your mechanic can spot things that may cause problems. You can also look for certified pre-owned cars, which come with warranties, but at lower prices than their brand new counterparts.
Research the Car's Reliability
Occasionally, car manufacturers change the design of the car, and some years the same model may have more issues than others. By buying used, you are not taking the risk that the new design or model is going to have problems. You can research different car models and manufacturing years and buy one with the least amount of problems.
Lower Insurance Rates
The newer your car, the higher your insurance rates. You can save on car insurance by buying a used car instead of a new car. Although this may not seem like a big deal, if you are already adding car payments to your budget, a rate hike can make it even more difficult for you to adjust and still make ends meet.
Save Money on the Purchase
The biggest reason you should buy a used car instead of a new one is that you will be able to purchase a used car for much less than a new one. If you are worried about financing it, many dealers offer financing, but you can also apply for a loan through your local bank or credit union that has good rates. You may also be able to save up for the purchase, which is less daunting then saving up for a new car.