Pros And Cons Of Buying A Used Car

The prices for new vehicles continues to rise, even as the economy softens. For millions of people, those two factors are motivation enough to consider buying a used car. In fact, the used car marketplace is one of the best sources for finding a great deal on a reliable vehicle. That said, buying used is not the best option for everyone. It has its potential drawbacks. In this article, I'll describe the pros and cons of buying a used car.

Pros

Price is an obvious benefit. Simply put, used cars are less expensive than comparable new models. Another advantage of buying used is that the buyer avoids having to pay for the initial depreciation of the vehicle. On average, a new car loses approximately 45% of its value during the first 3 years. If a buyer purchases a car that's 3 years old, that depreciation will have already dropped the price.

Another benefit of older cars is that the insurance premiums are typically lower. Older cars are less expensive to repair than newer models. As a result, auto insurers are willing to extend policies with lower premiums.

Cons

The most significant concern among prospective buyers is that they don't actually know what they're buying. That is, a used car could have structural damage or parts that don't work properly. That can lead to costly repairs. Another drawback involves warranties. New vehicles always come with a warranty that covers most potential problems. Used cars don't. If something goes wrong with the car, the owner will need to pay for the repairs.

Interest rates on car loans also differ between new and used vehicles. New models enjoy lower rates than older models. The difference is usually very small, but can represent an extra $20 each month. Over a 5-year term, those dollars add up.

The Biggest Bang For Your Buck

So, is buying a used car the right choice for you? Only you can decide based upon your budget, needs, aversion to risk, and willingness to take precautionary steps. If you're willing to order a vehicle history report and invest in a diagnostic check from a trusted mechanic, you can limit your risk. The report will provide details regarding any repairs that have been performed and the number of owners the car has had. The diagnostic check will help a technician identify parts that aren't working.

There are fantastic deals in the used car marketplace. Even better, you can substantially reduce your risk be taking the steps described above. Weigh the advantages and disadvantages of investing in reliable pre-owned vehicle. You may be surprised by the bargains you'll uncover.

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