7 Benefits of Buying a Pre-Owned Vehicle

Cars drive longer than ever before, but if the time comes when purchasing a new one is inevitable, then you may be faced with the questions as to whether to buy a new or pre-owned vehicle. Understanding the benefits of buying a pre-owned vehicle can help you make an informed decision as to whether new or pre-owned is right for you and how to choose the right pre-owned vehicle for you and your family. 

Benefits of buying a pre-owned vehicle: The rundown

Buying a pre-owned car can be just as fun and exciting as buying a new car, especially when considering the amount of money you are saving in the process. Other than the appeal of being the first to drive a new car, there is very little that a new car can offer that a pre-owned vehicle cannot. The following is an overview of seven of the more notable advantages of buying a pre-owned vehicle. 

1. The loan amount is smaller

Perhaps the most obvious benefit to buying a pre-owned vehicle instead of a new one is a lower loan amount. On average, pre-owned vehicles are approximately 50 percent less than new cars. This means rather than spending $25,000 on a new car, you can get a similar model that is pre-owned for under $15,000. This, of course, has a lot to do with depreciation. New cars can lose 10 to 15 percent of their value once you drive them off the lot. The large majority of depreciation has already occurred with pre-owned vehicles. In fact, you may be able to increase its overall value by making certain upgrades, such as switching out the headlights and installing new tires. 

2. Fewer dealer fees

New cars typically come with far more hidden fees than a pre-owned vehicle. This can include the shipping cost of the car, cost for add-ons, destination fees and more. In fact, the fees associated with new vehicles can quickly tally up to be well over $1,000. Since pre-owned vehicles are typically easier for dealers to acquire, they do not charge as many fees to the buyer when signing. This is in addition to the lower loan amount as well, significantly lowering the overall price. 

3. More variety to choose from

When choosing a pre-owned vehicle, you have hundreds of models to shop through from different years. When buying a new vehicle, your options are far more limited. This gives you the ability to shop and compare more options and ensure you get the car that you desire. You can also use used car websites such as Carfax or AutoTrader to sort through pre-owned vehicles at local dealers to ensure you do not miss any great deals in your areas. With new vehicles, there is rarely, if ever, a “good deal” available as dealers will want full price for the new vehicle. 

4. You know the quality of the car through data

Pre-owned vehicles have a history report that you can review and understand who the previous owners were, the car’s accident history and more. This gives you a clear indication of the condition of the car. In addition, you know precisely how many miles a certain model can last by reviewing the make and model. Used cars have data to show the long-term performance of a car, whereas new cars are a bit of a mystery as it relates to their long-term performance. By buying a pre-owned vehicle, you can use the data that does not exist with new cars to make an informed decision about your next car purchase. 

5. Lower insurance costs

One of the main factors that car insurance companies look at when determining the cost to insure your vehicle is how much it costs. The more a vehicle it costs the more the insurance will likely be. This makes sense as it will cost the insurance company more money to repair or replace the vehicle if damage were to occur. Therefore, the differences between a new car and a 2019 version of the same model may not seem significant, but it is to your insurance provider as depreciation makes the car more affordable. 

6. Cars are made to last longer than ever before

The technology in cars today is far greater than it was in the 80s or 90s. Cars are built to last much longer now, and the way we view how much we can get from our vehicles should change as well. Rather than planning to sell your vehicle once it reaches 100,000 miles as many do, you can continue driving your vehicle for much longer with the proper service. This may save you from needing to buy a car in the first place. However, if you are in need of a car, then do not shy away from purchasing a car with more years and a higher mileage as long as the car is in good condition and is well serviced. 

7. Lower annual registration fees

New registration fees are something we seldom plan for and often blindside us. You may also be required to pay annual registration fees as well. The annual registration fees are typically highest the first three years after a new car purchase, and the price significantly drops afterward. You can save money (possibly more than $1,000) by simply purchasing a pre-owned vehicle that is more than three years old. 

Things to check before purchasing a pre-owned vehicle

Car engines nowadays are built to last a long time, but the car parts may need repair and replacement as they age. Be sure to stay up to date with all parts to get the most out of your pre-owned vehicle. Parts to check before purchasing a pre-owned vehicle include but are not limited to:

• Headlights
• Taillights
• Brakes
• Tires

Also, be sure to conduct a thorough examination of the car’s history report to determine if it has had any notable accidents, if the odometer is accurate and how many previous owners the car has had.