Three Benefits of Buying a Used Car
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UPDATED: Jul 14, 2021
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- Sales tax for used cars is much lower sales tax than newer cars
- A car could lose 10 to 20% of its value in just couple of years
- In some states, the registration fees go down when the vehicle becomes older
As an educated consumer, you know that all good purchases are the product of research and careful consideration.
If you’re thinking about buying a vehicle, one of the first questions you’ve probably asked yourself is whether you should opt for a brand new car or used car.
For those folks out there with bottomless pockets, the answer may be easy. Nothing shines or smells quite like a brand-new car. But if your budget is a little tighter, there are several benefits of buying a used car.
In this short guide, we’ll cover the three biggest perks of pre-owned vehicles and the best ways to protect your purchase.
#1 Used Cars Depreciate More Slowly
With the possible exception of real estate, baseball cards, and expensive liquor, nearly everything depreciates in value over time.
While it’s true that this reduction in worth affects both old and new cars alike, the latter experience this descent more dramatically. The cliché “your car depreciates 10 percent on your way home from the dealership” is true.1
While the numbers may have slightly changed due to the coronavirus pandemic, a car could still have a depreciation rate of around 10 to 20 percent after just a couple of years.
This is good news for buyers in the used-car market. Why, you ask?
The simplest explanation is that it makes a certified pre owned car much cheaper to buy—if it’s worth less, it costs less. But there are other hidden savings apart from the price tag that new-car buyers just don’t get. Here are a few:
- Sales tax – Because the price tag is much lower, the sales tax for used cars is much less than their new counterparts. In some states, like Georgia, it’s nonexistent.2
- Registration fees – In many states, as the age of the vehicle goes up, the registration fees go down. Likewise, it’s generally less expensive to register a less valuable car.
- Insurance costs – The lower a car is valued, the less money potential damage could cost car insurance companies. The companies then pass these savings on to the consumer.
And just because you’re spared some of those exorbitant fees and taxes doesn’t mean you can’t also ride in luxury. As we’ve seen, waiting one or two years for that special gizmo looks more like smart buying than missing out. You can also learn how to negotiate a used car price to get the best deal.
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#2 There’s a Huge Variety to Choose From
According to AARP, 250–350 new vehicle makes and models become “used” each year.3 While that already sounds like a lot, the number goes up nearly astronomically if you add in vehicles that are no longer in production.
Take the Honda Element, for example, whose unique backseat design earned it a cult following among nomads and car-camping enthusiasts alike.
Whatever your taste, it’s always good to have options. Start by making a list of all the qualities and features you want in a vehicle, then look for the make and model that’s best tailored to meet those needs. One such list might include:
- All-wheel drive
- Heated seats
- Leather interior
- Standard transmission
You can also look for a “certified pre owned vehicle” (CPO vehicles) or “certified used car” that comes with a car dealership’s stamp of approval. Amongst the benefits of certified used cars are extended warranties and free or reduced car dealership servicing.
Sites like Carmax let you filter results based on these and other desired features. Be sure you:
#3 You Know What You’re Getting
Understanding what to check when buying a used car is important. Luckily, the longer they’ve been around, the more knowledge there is about a particular car. Search for any make, model, and year, and you’re bound to turn up countless online forums dedicated to discussing that vehicle.
There, you can find a wealth of information built up over time that brand new car owners just don’t have access to. Like great books and TV shows, it seems like we will never run out of things to say about them!
This is also great if you’re interested in eventually making some DIY repairs or add-ons to your vehicle. You’re likely one YouTube video away from learning how to change your windshield wiper blades, saving you the costs of taking it to a shop.
Protect Your Used Vehicle With Insurance from 4AutoInsuranceQuote
From increased variety to lower costs to enhanced data and knowledge, there are many benefits to a used car.
Now that you know a little bit more about the potential perks, you may be ready to take the next step. But before you make your purchase, go ahead and factor in the cost of your auto insurance, which will affect your monthly budget.
Auto insurance is required in all 50 states, and an adequate policy helps guarantee you’ll be able to enjoy your new wheels for years to come. You might be asking “do I need gap insurance on a used car” or “should I buy an extended warranty on a used car?” We’ve got you covered. At 4AutoInsuranceQuote, we can help you figure out which auto policy is right for you and your vehicle with a free comparison today. Then, head off into the sunset with full confidence in your new vehicle.