There’s always a debate about whether you should get a new car or a used car. In fact, we have this conversation with a lot of our friends and family members. In an effort to answer everyone’s questions once and for all, we put together this guide.
In this guide, you’ll be introduced to 10 great reasons why you should buy a used car instead of a new car.
Alternatives to Buying a Used Car
There’s nothing forcing you to buy a used car — there are some options that you have. We put together a few guides about leasing or buying a car. A lot of people prefer buying a car instead of leasing it.
When it comes to buying, you can pick a new or used car. This is the comparison we’re talking about here: should you buy a new car or a used car?
We typically suggest going used. Why? Well, there are 10 reasons why it’s a great idea (which we’ll talk about later). For now, just understand that the biggest alternative to buying a used car is to purchase a new one.
Where You Can Buy a Used Car
If you’re buying a new car, you need to deal with a dealership. The bottom line is that a ton of people are happiest when they’re not standing in front of a car salesman.
If you’re buying a used car, you can jump through the same hoops and go with a dealership, or you can work with a private seller. These are people that are selling their vehicle directly to you with no middleman.
The prices are usually lower with a private seller and they’re more willing to negotiate. You’re also more likely to get the truth about what’s wrong and avoid buying a lemon.
To answer the question, there are three places where you can buy a used car:
How Old Should You Go?
When some people hear “used car”, they might think that the vehicle is on death’s doorstep. Well, the truth is that a car made this year could still be considered used. If you buy a second-hand car that was purchased by someone else this year, you just got yourself a used car.
On the other end of the scale, you could buy a 30-year-old car — nothing’s stopping you. Just make sure you’re ready for constant repairs and some big-ticket items.
Our general recommendation is to look for cars that are around 5 years old. This seems to be the sweet spot between beating the depreciation curve and still having plenty of car left. These topics will make more sense as we discuss our reasons to buy a used car.
10 Reasons to Buy a Used Car
Let’s talk about our 10 reasons why you should buy a used car. This isn’t our way of convincing you that you need a car in your garage, we’re just talking about how used cars are better than new cars.
New Cars Lose Value Immediately
This is a topic that we talk about a lot. When you think about new cars, your first thought should be how their value tanks in the first five years. The rule of thumb is that a car loses half of its value within the first 5 years of owning it.
That’s money that just immediately disappears. After you drive a new car off the lot, you instantly lose a ton of cash.
Some people might counter this point by saying that they plan on driving the car until it’s worthless. Still, you’re paying way more upfront. From a math standpoint, it makes sense to buy a used car.
Get Ahead of the Depreciation Curve
The depreciation curve is how much value your car loses. As we just mentioned, it’s pretty steep in the beginning and sets in immediately after buying a car.
A place like CarEdge puts together a bunch of depreciation graphs for you to look at. For example, their Ford depreciation graph shows you that the brand loses half of its value in 5 years.
You can look at the curve, get ahead of the depreciation, and pick a year that’s perfect for you. That might not mean getting a 10-year-old car just to get the cheapest possible option. It’s up to you to decide which model year offers the best value for you.
Used Cars Have a History (and Proven Test Results)
When a new car comes out, you really have no idea how it will perform in the long run. Every car needs at least a few years to prove itself.
With used cars, you have more data than a new car. You can see the results of different tests, understand how many recalls it has, and make a more informed decision.
For example, the American public loved the Ford Pinto when it first came out. After a few years, reports started coming out about how they were poorly designed and posed a huge risk of fatality to the driver.
Since then, a lot has changed in the automotive world, but the same theory still holds: you want to wait a little to see how the car performs before pulling the trigger and buying one.
Pay Less in Insurance
For as long as you drive a car, you’ll need to pay car insurance. This is an annoying cost that has to be factored in no matter what.
The bright side of buying a used car is that the insurance premium is typically lower. This makes sense since the insurance company has a less expensive car to insure.
If a company has to insure a brand-new car, that could mean covering themselves for tens of thousands more dollars in case the car is totaled. That cost gets passed to you when you make your monthly insurance payment.
Registration is Cheaper
Another place that you save money is in the registration of your vehicle. Different states have different rules when it comes to registration. For the most part, you’ll pay less to register a used car.
The reasoning is because the registration is usually derived from the vehicle’s value. A car that’s worth less will have a lower registration fee.
Cars are Lasting Longer Than Ever
Old-school car guys always point out that cars don’t last forever, and that’s why you should always buy new cars. The truth is that cars are lasting longer than ever today.
A car that might only last 100,000 miles in 1990 is now surpassing 200,000 miles without a hiccup. This is thanks to better industry standards, more advanced technology, and decades of additional experience.
Your car can survive upwards of 15 years as long as you take care of your car the right way. Even if you buy a car that’s 5 years old, you have another decade to spend with your automobile. For the money you’re saving by skipping out on the first 5 years, it seems like a no-brainer.
More Car for Your Money
Another reason to buy a used car is the amount of car you get for your money. What does that mean? Well, let’s do a quick comparison and show you how this works.
A 2021 Honda Accord starts at around $25,000. That gives you 192 horsepower and a 1.5 L 4-cylinder engine.
For the same price, you can get a 2014 Lexus GS 350. This is a luxury car that has every bell and whistle you can imagine, and a 3.5 L V6 that cranks out 306 horsepower.
Since the Lexus is used, you get way more car for the same amount of money. It also means that you can “afford more car”.
Lower Risk Thanks to Vehicle History Reports
In the last decade or so, the availability of vehicle history reports has blossomed. You can learn about every fender bender and insurance claim against a vehicle before buying it.
This makes it tougher for a used car lot to trick you into buying a car with excessive damage from an accident. This isn’t a guarantee that the car is in perfect condition, but it’s a great way to lower your risk.
Tons of Available Troubleshooting Online (for Free)
As cars get older, they require more maintenance. You can definitely take your aging car to a mechanic, but we like to fix problems on our own.
The good news is that there’s a ton of information online about troubleshooting and repairing your car. For example, our blog alone has many guides to help you out.
A lot of this information is free for you to access, so you don’t need to worry about digging into your pocket. If you’re going to buy a used car, make sure you know what type of routine maintenance is required to keep it running.
A Third-Party Inspection Is All You Need
There’s a thing called a “pre-purchase inspection” that can save you a ton of money. This is when you have a third-party mechanic take a look at the car before you spend a penny on it.
They’ll do a deep search on the car and check the safety, integrity, and mechanics of the car. They’ll put together a detailed report, so you know exactly what you’re getting before you buy the car.
In a lot of cases, this is done through a local auto repair shop. They might even include prices to fix some of the problems that they found.
Like a vehicle history report, this helps you to avoid buying a lemon. A test drive and personal car inspection can only tell you so much, so that’s why we highly recommend a pre-purchase inspection.
Hopefully, you learned a little bit about buying a used car. We reviewed 10 reasons why you should choose a used car instead of a new one. For more car buying guides and maintenance tips, check out the rest of our blog. Make sure your garage has the right tools and accessories to keep your car driving forever.