When buying a vehicle, there are two primary options: new and used. While both have their pros and cons, most people discover that purchasing a used vehicle is more practical and beneficial. But have you ever considered why this is?
1. You Let Someone Else Take the ‘Depreciation Hit’
Unless it’s a vintage model car that’s hardly ever driven, a car is a depreciating asset. That means unlike other assets – such as real estate – it’s worth less tomorrow than it is today.
“There’s no one-size-fits-all solution to buying a car. However, purchasing a used vehicle typically allows the buyer to get more value out of a purchase,” Tiger Okeley of Oak Motors explains. “Unlike a new car, which loses a lot of its value as soon as it’s driven off the lot, a used car can effectively be purchased at a discounted rate by the second or third owner.”
A brand-new car loses a significant portion of its value the moment it rolls off the dealership lot, with the steepest decline in value happening in the first few years. By choosing a used car, you let someone else take that initial depreciation hit, securing a vehicle that holds its value better over time.
Once you understand this depreciation curve, you’ll see that as a used car buyer, you can get more car for your money. This allows you to step up to a nicer model or trim level than you could otherwise afford new.
2. Insurance Savings
You don’t just save up front with a used vehicle. You can also save over the life of ownership, if you know what you’re doing.
When it comes to insurance, older cars generally cost less to cover. The value of the vehicle is a key factor in determining insurance premiums, and since used cars have a lower value than their new counterparts, the cost to insure them is typically less. This means ongoing savings every month, leaving more money in your pocket for other expenses.
3. More Choices
Venturing into the used car market opens up a whole lot of options that may not be available in the new market. With a budget that might only cover the base model of a new car, you can explore higher-end models, different makes, or even luxury vehicles that are a few years old.
This variety of options means you’re more likely to find a vehicle that fits not just your budget but your preferences and lifestyle. The used car market encompasses a broader range of years, models, and styles, ensuring there’s something for every type of driver.
4. High-End Features Are More Practical
Dreaming of leather seats, a premium sound system, or advanced safety features but find them just out of reach in the new car market? When you shop used, you can make these desires a reality. As you move up the ladder of older models, the inclusion of luxury and high-tech features becomes more common, allowing you to enjoy the comforts and conveniences of a high-end car without the steep price tag.
For example, most people can’t afford a brand-new Mercedes or Lexus. But when you buy a vehicle that’s three years old with 36,000 miles on it, you’re much more likely to fit that in the budget. Plus, at this age, they often still have the same body style and the condition is likely good.
5. Eco-Friendly
Choosing a used vehicle doesn’t just benefit your wallet—it’s also a green choice. Buying used extends the life of a vehicle, reducing the demand for new car production and, in turn, the resources and energy consumed in the manufacturing process.
Additionally, keeping a car on the road longer minimizes the environmental impact associated with disposal and recycling. That means opting for a used vehicle contributes to a more sustainable and environmentally friendly approach to driving. So if that’s something that’s a major priority in your life, you can feel really good about a used vehicle purchase.
Putting it All Together
Choosing a used vehicle as your next car purchase isn’t just about saving money — it’s about making a smart, informed decision that aligns with your financial goals, lifestyle needs, and even your environmental values. As the benefits highlighted above show, this is as much a financial choice as it is a practical one. Good luck car shopping!
