People buy cars for different reasons; it could be for personal transport or running their business. Regardless of the reason for buying a car, you need to review various aspects of buying a car before making a purchase. One of the main factors you need to consider is whether to buy a new or used car. New and used cars come with their advantages and disadvantages; however, if you are working on a budget, then a used car will be your best option. Here are a few advantages of buying a used car.
1. Outstanding Savings
On average, a used car will cost you 50% lower than the MSRP of a new car. It is easier to pay off a used car than a new car as they also come with flexible financing options. With used cars, you can switch between models easily and at a lower price compared to when you buy a new car. It’s best to note that new cars come with several charges, including financing fees and transportation, something you don’t have to worry about with a used model.
2. No Added Fees
Most dealerships offer consumers various deals on new cars that may seem good on paper. However, most buyers find themselves shouldering several other costs not included in the original agreement. Buying a new car means you have to pay for charges, such as destination fees, shipping charges, and processing fees. On the other hand, a used car doesn’t have added or hidden costs. Most of these charges were taken care of by the previous owner.
3. Low-Cost Insurance Premiums
A new car generally attracts high premium rates due to factors such as prevailing market prices and mileage. This means when you are in an accident with a new car, the insurer will pay for what the car is worth at the time, leaving a difference between the purchase price and the vehicle’s worth. This difference creates room for gap insurance. Gap insurance covers the difference between the depreciated value and what you paid for the car. However, this forces you to raise your insurance premium. On the other hand, you don’t have to worry about gap insurance for a used car since most of the depreciation has occurred.
4. Cheaper Registration Fees
In most regions, the rate of registration fees is pegged on the car’s model year and its value. This figure is mostly high during the first three years of car ownership but levels off after five years. Buying a used car helps you save approximately a thousand dollars since you don’t have to pay for new and annual registration fees if you buy a car three years and older.
5. Cheaper Customization
One of the main challenges of buying a new car is finding an affordable model with all the add-ons you want. Most buyers are forced to shoulder the extra cost of upgrading to higher trim levels to access some of the customization features they’d like to have. On the other hand, you can choose to install your own add-ons at a lower cost. This is also a good way of spending the extra cash you saved from buying a used car.