6 Reasons For Buying a Used Car
New cars can be incredibly expensive. For even the lowest quality cars with none of the new fancy features that most new cars have, you’re still looking at almost 20 grand. A car is usually the second most expensive purchase that the average person will make, with their homecoming in first. These new cars can be thrilling to buy, and have all the newest features and technology, but is it really worth that hefty price tag? We’re here to tell you that it’s not. As soon as you drive the car off the lot, it’ll drop thousands of dollars in overall worth. Not to mention the vehicle will depreciate like crazy after the first year. Alongside this is the cost of maintenance and repairs. Because of all these factors, not only will your monthly financing or lease rates be sky-high, but your bank account is going to take a lot of unexpected hits.
Below we’ve put together a list of 6 reasons as to why you should buy a used car over a new car. Keep in mind our definition of a used car pertains to a vehicle that’s in good shape, is a few years old, and has less than 35,000 on the odometer.
Benefit From Depreciation
If you wanted to buy a high-quality sports car worth $60,000 in 2018, you’d have to pay the full amount (obviously). When you drive that vehicle off the lot, it’s going to depreciate astonishingly fast. In the next year or two, that sports car won’t be worth $60,000, but rather, about $40,000. Another few years pass, and it’ll be worth $25,000. For used car buyers, this is excellent. The car is typically still in great shape with low mileage, and is essentially almost 50% off! When you buy a used car of this caliber, you won’t have to worry all that much about future depreciation because the residual value of most sports cars is, on average, around 30% of the total price. If you think about it, you could buy that sports car for the same price as a new minivan! That’s crazy and is for sure something to keep in mind.
The Sales Tax On New Vehicles
In Canada, you’re required to pay more in taxes for a new vehicle then you are for a used vehicle. Depending on the used vehicle, you may not have to pay any sales tax at all! So if that sports car we previously mentioned is worth $60,000 brand new, you’ll most likely have to pay closer to 70. This is because dealers don’t include sales tax in their price tags. Private dealerships are typically free of sales tax, but if even if they weren’t, you’re still paying significantly less in sales tax as the amount is based on a percent of the actual price.
Paying to get your license plate sticker renewed every year can be a pain, and can cost you a large sum of money. However, buying a used car is typically a lot cheaper in this regard. Not only are you skipping the most expensive years (the first three), but you’re paying less because the car is not worth as much as a new vehicle. For more information on a vehicle’s annual registration or license plate sticker, contact local and/or provincial service center.
Ridiculous Add Ons & Features
When buying a new car from a dealership, the car is typically loaded up with add ons and features that are completely useless. Things like overly expensive anti-rust coatings, warranties for things that will never break, and entertainment features you’ll likely never use. Buying a used car doesn’t involve you with these problems. Not to mention, if you actually want the features they are trying to sell you when buying a new car, visit the aftermarket parts market. Chances are they’ll have exactly what you’re looking for, and it’ll be a lot cheaper than what the dealer offers.
These added aftermarket features are often cheaper, but even if the individual part is the same price, you’re still saving money. Dealers tend to only release certain features in packages. For example, if you want a sunroof, you’ll most likely have to purchase a package that contains one. Not only are you paying for the sunroof now, but you’re also paying for everything else in the package. Fancy lights, tinted windows, along with other useless commodities.
Not only will dealerships try to sell you packages full of useless features, but they’ll charge you for ridiculous things. Charges for shipping even though shipping cost them nothing. Charges for dealer preparations even though they only wipe down the car with a rag and maybe fill the tank with gas. You never have to worry about these ridiculous fees when buying a used car.
When buying a used car instead, not only do you not have to worry about dealing with stupid hidden fees, but you’ll actually be able to negotiate for your preferred price. If shipping is required, you can negotiate with the seller. You may even be able to get them to void certain prices if you can pick up the car yourself, or have them not clean it beforehand.
Condition of the Vehicle
Many people are afraid of buying a used vehicle because it’s time may be up. After all, many automakers make their cars only last a certain amount of time, so buyers will come back for more. Planned obsolescence is the official term for it. Fortunately for used car buyers, the mileage many cars will live to is far past 150,000 kilometers. Not to mention when you buy a used car you’ll probably buy it at around 30,000 or less. These vehicles will last for years. If you’re mechanically inclined or know someone who is, it’s fair to say you can probably keep the vehicle going upwards of 200,000 kilometers.
New cars definitely have their benefits, but those benefits are only worth it if you have a lot of financial freedom. Unfortunately for the majority of people, that financial freedom has its limits. A new car may be shinier than a used one. It may smell better and be faster, but in our professional opinion, we believe those benefits aren’t worth the hefty price tags. This isn’t to say you shouldn’t go out and buy a new car if you can afford it, we simply mean to say that you’ll save a lot of money going with a used car. For most people, that’s beyond important.