Buying a car is an enormous investment and it is important to weigh up your options to ensure that you make an intelligent decision. You may think that buying a brand new automobile is the smarter financial decision in the long run, but this is not actually the case. A used car is more financially viable option for a few different reasons.
The primary reason is depreciation. If you buy a brand new car, the value of it will drop from the moment that you drive away from the dealership. There are various factors that will determine a car’s depreciation, but typically it will lose around 60% of its value after only three years (the biggest hit will be in the first year). After three years, the rate slows down and reaches a standstill by the eighth year.
Most motorists change automobile from time to time, so depreciation is an important factor to consider. By buying a used car, you can avoid the biggest drop in value and ensure that you don’t lose a huge sum when you come to sell the car.
This depreciation also means that you are paying significantly less money when you purchase the vehicle. Look for a vehicle that is over three years old from a reputable online dealership, like AA Cars, and it will have a low price-tag whilst also allowing you to sidestep depreciation. You may be able to find the vehicle even cheaper from a private seller, but this can be risky and there will be no finance options.
You may not be the first owner of the vehicle, but with detailing and personalisation, you can make it feel brand new and your own.
One of the major factors that influences your car insurance premium is the value of the automobile. As mentioned above, an older vehicle will have a much lower value and this will help to keep your premium down (although there are various other factors to consider too). In the long run, this could save you an enormous sum of money.
In addition to the large price-tag, you will also find yourself shelling out for all kinds of fees when you buy a brand new car. You may have to pay some fees if you buy second-hand from a dealership, but these will not be as costly as the fees on a new car.
Buying a new vehicle may be tempting and seem like a wiser investment, but this is not the case and the above reasons show why second-hand is the way to go.