Used Cars And Trucks
If you are looking to purchase a vehicle now or in the future, the used car or truck option may be right for you. There many advantages to buying a used vehicle, not the least of which is cost:
While owning and driving a brand new car is an exciting experience, buying the right pre-owned car or truck can be just as great. And it almost always makes more financial sense to buy a used car.
PROS of Buying a Used Car
Greater integrity ~ Online vehicle history reports, research and pricing have made the Used Car industry more transparent and honest. This increased ability to research and gather good information helps to ensure you are choosing a quality used car and not getting ripped-off.
Lower purchase price ~ You can save thousands less than the price of comparable new vehicles. The average used car price is less than half the average new car price.
More selection ~ The number of cars and the availability of colors and options is much greater. Used cars outsell new cars by about 3-to-1.
Upgrades ~ You can get more car for less money. A stripped, brand new import will often be about the same price as a late-model, loaded luxury car.
Improved reliability ~ Auto Manufacturers in general have improved the quality and reliability of their vehicles in recent years, which means they last longer. Longer life and reliability of new cars translates into better quality used cars.
Warranty ~ The original factory warranty on most new cars is transferable to a second owner, usually at no charge. extended warranties and maintenance plans are also available for purchase on most used vehicles.
Certified pre-owned programs ~ Vehicles are sold "as new" and warranted by the Manufacturer. Buyers of certified pre-owned cars from an authorized dealer can purchase a late-model used car with the original warranty and may choose to purchase additional coverage.
Lower depreciation ~ New cars depreciate in value significantly, losing about 30%-40% of their value within the first 2-3 years of ownership, at which point the rate of depreciation starts to slow down. With used cars, the previous owner has absorbed the biggest portion of the depreciation. You buy at the beginning of the low-cost stage of the depreciation cycle, when most of the costs of owning and operating the car are reduced.
Negative equity ~ If your used car is financed with an auto loan, depreciation means that you will be upside down (you owe more than the car is worth). You will have less negative equity for a shorter period of time if you purchase a used car instead of a new car.
Lower sales tax ~ Lower state and local tax rates based on lower pricing.
Lower financing costs ~ By reduced fees and interest paid.
Lower tax, registration and license fees ~ Fees that are usually tied to the value of the car, which is less for pre-owned cars and trucks.
Lower insurance premiums ~ Also tied to the value of the car. Full coverage insurance, which is required for any financed vehicle purchase, is typically lower on a used car.
Shorter terms ~ Financing smaller amounts for less time can help you pay off auto loans sooner, saving you interest and finance charges.
CONS of Buying a Used Car
Repairs ~ The risk of costly, unwarranted repairs can be higher.
Reliability ~ With even normal wear and tear, reliability can be reduced.
Maintenance ~ Major maintenance and associated costs may be due (tires, battery, brakes).
Limited or No Recourse ~ Most used vehicles are sold "As Is", and there usually are no Lemon Laws or regulations covering used cars and trucks. Unless there is a transferable warranty or extended warranty, you have no recourse if something goes wrong.
Bad Credit ~ Buying a used vehicle is sometimes not an option for people with credit challenges. Each lender's requirements are different, but often a higher down payment or co-signer is needed to purchase pre-owned. Lenders consider things like the make, model, year, mileage and loan-to-value ratio for all used cars. Sometimes lenders will not finance used vehicles based on these considerations.
Before you buy a Used Car
Check the title and vehicle history of the car using a vehicle history service like Carfax.com
. By checking the title, you can learn if the vehicle:
Has ever been totaled in an accident or natural disaster
Is registered as a lemon
Has been repossessed
Had its odometer rolled back
Has been in a serious accident
If you are still interested in purchasing the vehicle after you've checked out the title, inspected the car, and taken it for a test drive, consider investing the cost of taking it to a trusted mechanic for a check over. A mechanic will be able to perform a thorough inspection, and let you know about costly problems before you make a purchase. Remember, with used vehicles, you can't take them back for a refund.
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