You need a new car, but you can’t afford a “brand-new” vehicle. Or maybe you just don’t like the idea of high payments and depreciation that comes with buying a new model. For many reasons, used vehicles are appealing to more buyers.
You can save thousands of dollars when you shop around for a used vehicle. With the average new-car purchase around $37,000, according to Experian Automotive, buying used can mean $10,000 to $15,000 in savings.
New vehicles come with more bells and whistles, from advanced safety features to premium entertainment systems. These features are nice to have, but they often put the new vehicle out of reach for the average buyer.
In the past, buying used was a gamble, a recipe for long-term problems. Buyers who could afford better steered away from used and those “lemon” deals. However, the growth of certified pre-owned vehicles has provided an incentive for buyers to think used again. These vehicles come with warranties that provide peace of mind for the buyer similar to what you get with a new vehicle. Couple that with a lower interest rate, and buyers are seeing how used models may be the best investment.
Here are some reasons to stick with used over new vehicles:
You can also end up driving a better-quality car than what you might afford with a new model. For example, you may only be able to afford the base trim on a model if you buy new. A lower purchase price means you could get the highest trim level for a pre-owned model.
You could also upgrade from a cheaper model to one with a higher price tag. For instance, instead of buying a Jeep Compass new, you might be able to afford the Jeep Grand Cherokee that’s a couple of years old.
According to research, over twice as many people are buying used vehicles as those who are buying new. Thirty percent of those purchases will be from franchise dealers.
It’s not just about those who can’t afford new vehicles. Many people who have good credit and could quality for a loan on a new vehicle are opting for a used model because of the lower monthly payment and lower price tag. The difference between the monthly payment for a new and used vehicle is getting bigger. People hesitate to pay as much each month for a vehicle as what they pay for their mortgage. Car payments on new, high-end models more often resemble a house payment while the lifespan of the vehicle is only a fraction of that.
Modern used vehicles have a lot to offer buyers who are frugal and budget conscious. They are faring well when competing head-to-head with brand-new models.