You're dreaming of parking a new car at your home because you like the advanced safety features, powerful and fuel-efficient engine, high-tech amenities, and new car smell. Until the exorbitant price tag has you doing a double-take. You're thinking that you can't ever afford a new ride. But that's one of the many reasons why you should consider a used vehicle instead.
Cheaper Price
According to Kelley Blue Book, the average price of a new light vehicle in the USA is $40,472 as of March 2021. That puts a passenger car, SUV, or truck out of reach for most consumers. If you can't see yourself spending that kind of money for your ride, try a used car with an average price of $25,000, as of May 2021.
The drop in cost rewards you with fewer sales tax and registration, lower monthly installments, less total interest, and less spending overall during the length of the auto loan. You may also be able to afford a higher-level trim or more options than you thought possible.
Lower Insurance Rates
The insurance premiums charged for a new car, especially if you're a young male driver, can prove to be astronomical. You're paying to replace a higher value and will most likely need comprehensive or collision coverage to protect your investment and because your lender will demand it.
Premiums for a used car are cheaper to insure because they don't cost as much. For older vehicles, you might be able to drop comprehensive and collision options just because they don't have enough value to support such coverage.
Less Depreciation
Depreciation is when a new car loses value because it's now used. Once you drive your new purchase off the lot of Glockner Chevrolet, it loses as much as 20 percent of its value. After the first year, another 10 percent can disappear for a total depreciation of up to 30 percent. Depreciation can reach 10 percent per year after that
If you buy a vehicle that's at least two or three years old, then most of the depreciation has already happened. You'll hang on to more of the car's value so when you sell, you'll get a larger portion of your investment back.
No Negative Equity
If you own a new car that depreciates by 30 percent in the first year, the loan does not go down by the same amount. In the first couple of years of ownership, you'll owe more in financing on the vehicle than it is worth, putting you underwater and punishing you with negative equity. If you try to sell your vehicle or if it is stolen or totaled, the compensation you receive will not pay for the loan. You'll have to come up with the remaining money out of your pocket.
This rarely happens with a used vehicle. Because most of the depreciation has already occurred, a used car that is two or more years old keeps its value better. It will generally be worth more than the money you owe in financing.
Certified Pre-Owned Option
One reason that prevents you from buying a used car could be lack of reliability.
·        With a new car, you're confident that everything works as intended and any problems will be taken care of by the manufacturer's warranty.
·        You have no idea what the history of a used car may be. It may have been driven to the ground by the previous owner and be hiding all kinds of mechanical defects that are no longer covered by the manufacturer's guarantees.
You can get around your lack of confidence by shopping only for Certified Pre-Owned cars. Such vehicles must have a clean title, be less than six years old, and have less than 75,000 miles. You can also lookup their service history through CARFAX®. They must also go through a 172-point vehicle inspection and reconditioning process.
These vehicles also come with a six-year or 100,000-mile Extended Powertrain Limited that also gives you Roadside Assistance and Courtesy Transportation. You're also covered by an Extended new Car Bumper-0to-Bumper Limited Warranty for 12 months or 12,000 miles. Within the first two years or 24,000 miles, you're entitled to two free scheduled maintenance visits.
Finally, you have three days or 150 miles to exchange a Certified Pre-Owned vehicle for something that you prefer.