More than twice as many car buyers choose a used vehicle over a new one, but is it the right choice for you? While lower used car prices are a key factor for most consumers, there is more to consider when making a decision.
Pros of buying second-hand
Used car buyers can benefit from the rapid depreciation in the value of new cars by an amount of 20 percent in the first year and around 40 percent after three years. Minor average prices for used vehicles they also offer a better chance of being able to pay for your purchase in cash or make a larger purchase advance payment. You might even get a higher spec model than you might afford again.
Smallest loan amount
With lower prices, it’s no surprise that used cars have lower average loan amounts than new ones. Depending on the terms of the loan, this could result in lower monthly payments and a lower total interest expense.
High quality options
Continuous improvements in vehicle quality and reliability have resulted in a number of excellent used models on the market, many of which can the first 200,000 miles.
Used car loans they are generally shorter than those for new cars, allowing borrowers to pay off their vehicles earlier.
Cons of buying a used car equipment
Despite the improvements in quality, it goes without saying that used cars will generally be less reliable than brand new models. The older the car, the more money you may have to spend on repairs, especially if it is no longer covered by the automaker’s warranty. The driving behavior of previous owners also plays a role in reliability which is why a vehicle history report is important. These reports contain a record of incidents, service history and the title status of the carwhich includes annotations for the bailout, reconstruction, flood or lemon law titles.
Purchasing by private individuals may not be covered by the warranty
Unless a vehicle is still under manufacturer’s warranty, buying from a private individual means losing protection against mechanical and electrical failures. Dealers, on the other hand, could offer their own warranties on used vehicles.
The choice could be more limited
New car buyers can typically select the features, color, and accessories they want for a particular model. Used car buyers may need to be more flexible or shop around when it comes to these preferences.
Rates could be higher
Interest rates tend to be higher for used cars. This is partly due to the incentives of manufacturers on new vehicles, but also to the increased risk associated with financing used cars. Consumers with lower credit scores will often buy used, for example. Another reason is that used car values are less predictable, which makes it harder for the lender to know how much money he can get back if needed. repossess and resell the vehicle.
Your car buying decision
These pros and cons should prove invaluable when considering options on your next vehicle, but don’t stop there. Consider thoroughly researching which models suit your wishes and needs and balance what you could afford. When you are ready for funding, take a few minutes to apply with RoadLoans and make a decision in seconds. We accept consumer inquiries across the credit spectrum and, if approved, will connect you with a dealership nearby. As a trusted lender, we only work with dealers who can show our customers selected, high-quality vehicles, so you can shop with confidence.
This article was published by: Rob Looker by title: Pros and cons of buying a used car and how to make a decision
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