By Steve Jacobs
In the back of your mind, you probably know the type of new car you’d like to be driving. However, that might not be the right one for you based on your situation. In fact, the best car for you might not be new – as in brand new.
What about used? Buying a previously owned car carries all kinds of pros and cons. Let’s cover some of these.
If your main concern is getting the most bang for your buck, a used car is probably your best bet.
“The biggest benefit of a used car is that it’s already had its most significant depreciation,” says Sean Scaturro, CERTIFIED FINANCIAL PLANNERTM practitioner and USAA advice director.
In fact, about 50% of the depreciation of a new car happens in the first year. That means you’re getting a car that was top of the line one or two years ago for a significantly lower price.
Also, just because you buy a car used doesn’t mean you can’t resell it later. You need to ask yourself why you’re buying the vehicle. If it’s for the long haul, then resale value might not matter as much. But if you plan to resell it, you’ll want to factor in things like mileage and regular repairs. Speaking of which . . .
Of course, the older a car is, the more likely it needs help in the maintenance department, and the more difficult its parts may be to replace. You’ll need to factor these costs into the purchase price. After all, you don’t want to spend $3,000 to fix an aging vehicle that costs $6,000.
But this is a con that can sometimes be avoided, according to Scaturro: “Preventative maintenance usually keeps you from having to shell out a lot on a big repair that you didn’t catch or weren’t expecting.”
At the end of the day, whether you hope to sell the car later or drive it until the end, you want to keep it looking good and driving well. It’s kind of like a house in that sense – if you want to sell it, you just need to make sure it’s prettier than your neighbors’.
There’s also a huge benefit in getting your car detailed. If you haven’t experienced this particular delight, you’ll be shocked to find that a detailed used car may look just as appealing as a brand-new car.
As a car ages, you might not want to put as many miles on it as you would on a new car, whether your goal is to prolong its life or to sell it to someone else.
If you intend to sell it eventually, have a good look at how many miles you’re logging. If you want to keep that number low, you might find yourself renting vehicles for long drives or driving less than you’d prefer. This comes down to personal preference, but these are potential hidden costs to owning a used car.
We want to end on a high note. One thing purchasing a used car allows for that purchasing or leasing a new car doesn’t is control: You get to decide what happens to the car.
You aren’t as afraid of the occasional dent or ding, you can take it almost anywhere you want without fear of major damage or excessive mileage, and you can decide what you think a fair value is when you go to sell it.
“You’re in control — you can have a better vehicle to sell if you want to, and you can have a better vehicle to drive if you want to,” Scaturro says. The choice is ultimately up to you.
As you can see, whether or not to buy a used car comes down to what you’re looking for in a vehicle. We hope this helps if you were on the fence about taking this route.
Need to know more about the ins and outs of buying, owning and insuring your car? Check out our Auto Learning Center.
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