The Financial Advantages of Buying a Used Car

Buying a car is an expensive endeavor, so it’s important that you make the right decision. A lot of factors will influence this, but one of the most important will be your finances. You can only buy what you can afford, and sometimes the price of what you want and the expense you can justify simply don’t tally. 

For some, buying a used car offers the perfect solution: you have a greater deal of choice, pay less and can pick up cars that would have been far beyond your budget when new. 

Seven million people each year choose to pursue this avenue, buying from private dealers or companies. However, many still fear the risks inherent in buying a car that already has miles on the clock, and won’t even consider it. But before you let these worries dissuade you, perhaps it’s time to think of the many financial benefits of buying used… 

Avoiding Depreciation

One of the major advantages of buying used is that you can avoid the worst of depreciation. There is very little point in buying new and paying over the odds when your vehicle will lose 20 per cent of its value as soon as it rolls off the forecourt. Most new cars are worth less than half their purchase price after three years, with some losing up to two thirds. By buying used and spending less to begin with, you have less to lose. 

Extended Factory Warranties

One fear of those considering buying a used car is that they’ll pay more in maintenance over their car’s lifetime, and face a greater risk of things going wrong. On these grounds, many reason that it actually proves more cost-effective to pay more at the outset and spend less on the vehicle overall. What these people forget is that factory warranties are now longer than ever, so buying a car that’s two to three years old may not prove any more expensive than buying new should things go wrong. 

Private Sellers

It’s no secret that many used car dealers add a mark-up to the vehicles they sell. They’re running a business, after all, and they need to turn a profit.  Private purchases will often offer much more competitive prices, as they’re guaranteed to make a loss on the amount they originally paid, and have no business overheads to cover. You’ll also find that this gives you a much greater variety of vehicles and sellers to choose from, increasing your likelihood of securing a real bargain. 

Affordability

As mentioned, used cars will be cheaper. Of course, this means that the car you were eyeing up in the showroom will be available for a much lower price if someone else has owned it for the past two years. Buying used means that you can often secure the car you want at a price you can actually afford, even if you need to get a car loan to help to make your budget stretch further but still remain affordable.

These are only a few of the many financial advantages of buying used, but they make a compelling argument. If you have money to burn and a car in need of replacing, would buying second-hand be something you might consider?