For those seeking out used cars for sale… STOP.
No matter if you’re looking into used, new or certified pre-owned vehicles, it’s important that everyone performs their due diligence before finalizing a purchase. The importance of doing so is amplified significantly when speaking about used vehicles. That said, these concerns are not why we had told you to ‘stop.’ We wanted you to stop that you we could give you this virtual High-Five for making a smart decision.
Listen, we have no intention of trying to dissuade you from buying a new vehicle. Considering the variety and selection out there, it would be hard not to feel compelled to pick up a new model year offering. That said, pre-owned vehicles have evolved significantly, and the stigma attached to buying them has been all-but diminished in many cases. In fact, buying used can be viewed as a smarter choice.
So, kudos to you. Now, let’s take a look at all the reasons why you’re making a smart decision.
Escaping the Stigma
Years ago, buying used was viewed as some sort of consolation prize; the fate of those fiscally unable to purchase a new vehicle. This sentiment was further exaggerated by the stereotype of shady dealerships whose sportcoat-clad salesmen were all-too-eager to make a fast buck on their unsuspecting customers.
While dealerships aren’t created equal, the culture of the marketplace as a whole has evolved significantly. Due in large part to increases in quality, vehicle life and greater transparency the act of buying a used vehicle is far less of a blind trustful than it had been in years past.
Meeting Evolved Expectations
As mentioned above, consumers have higher expectations and demands than ever before. Resulting from a greater willingness to perform due diligence before a purchase, car-buyers are no longer ‘buying blind.’ This is further supported by the availability of vehicle history reports, empowering those customers to be as informed as possible about any vehicle they are considering.
That said, customers may be surprised by the value offered by a well-maintained pre-owned vehicle. These days, it’s not uncommon for many vehicles to meet (or even exceed) the 200-250,000 mile mark. Considering that American mileage is averaged at 12,000 miles annually this means that many vehicles are lasting a decade or longer. With proper due diligence performed, a prospective second owner might expect a far longer life than they may have hoped for in the past. However, there are far more benefits to be gained when buying used (and cost is a big part of it).
Lower Pricing, Front-End & Incremental Costs
Bottom-line, when buying used you can expect to pay less. There are really no revelations there, but when a customer is already looking to spend thousands (or tens of thousands) of dollars, it becomes easy to rationalize small jumps in price, and in incremental costs. It also becomes easy to ignore or de-prioritize small reductions that could affect your long-term budget.
Consider, for a moment, costs associated with tax, title, registration, and insurance. By deciding to buy a used vehicle, you can reduce these costs significantly (and even eliminate them, depending on your geography and buying options). Considering that some of these costs exist as recurring, incremental costs throughout the life of the vehicle, it’s important to recognize the savings and potential long-term impact.
Financing also comes into play, as those who don’t require financing can enjoy the full savings of the reduced pricetag. That said, depending on the financing option that you qualify for and select, it is likely that some of used car savings will be reduced by a slightly higher interest rate. That said, you can still expect savings, either way. Which segues perfectly into the biggest reason ‘why’…
Benefits of Depreciation
You’ve heard it before: buy a new car, and it begins to depreciate the moment you drive it off the dealer lot. Is it true? Sure. But how many of us actually understand the extent to which it’s true?Consider for a moment a ‘what if?’…
What if you bought a new car for $30,000. By the time that vehicle’s rear tires rolled off the dealer lot and onto the road, its value will have been diminished by up to 11%. This means that, if you were to pull a U-turn and drive right back onto the lot with the intention of selling it back, it might be valued at less than $27,000. Fast forward a year, and it’s now worth 25% less than what you paid for it. Three years down the line? It’s now worth almost half. And five years later, it will have decreased in value by as much as 63%.
With the original owner having shouldered so much of the depreciation they reduce their own expectations of a strong return on their investment when resold. That said, by doing so they empower the vehicle’s next owner to get more car for their money. A more expensive vehicle or trim level might now fit the buyer’s budget, where it wouldn’t have if they had bought it new.
Considering the increasing amount of technology which has become standard in recent years (Bluetooth connectivity, music streaming compatibility, etc.) it becomes far easier to accept buying a three (or even five) year old vehicle. The ability to buy it for close to half the cost makes an even more compelling argument in favor of doing so.
Do Your Homework
While the benefits of buying used are plentiful, we feel the need to stress the importance of performing your own due diligence. Yes, this means researching any vehicles and/or running comparisons between various makes and models. And yes, it means researching financing options (if needed) to find the best option for the unique demands of your budget. But it also means inspecting and test-driving the vehicle prior to purchase. If lack automotive confidence, enlist the help of someone who can scrutinize any used vehicle you’re considering. This will help to ensure your satisfaction in the long run.