Other than your house, your car is probably the second-most expensive asset you invest in. You want to buy a new vehicle, but you also have to manage your finances responsibly. You may be drawn to a local car dealership to purchase the new vehicle you liked. Sure, it might be shiny and new for you, but it might not fit your budget. Do you really want to cripple yourself with debt by buying a new car? Are you aware of all the extra costs associated with buying a new car? If you’re still bent on buying a car, we’d suggest you opt for another great option – used cars!
Surely, there are a lot of used car dealers in your town. If you’re in Naperville, you can easily find used cars in Naperville. Purchasing a used car will not only save you from a lot of hassles but will also save you a lot of money. A ‘slightly-used’ car that is about 2-3 years old and has run for less than 30,000 miles will be a great investment for you. Here’s why choosing a used car over a new one is great for you:
1. It Saves Your Financial Resources
The prices of used cars tend to be 50% lower as compared to new cars, making it easier for you to pay off a used car more quickly than a new one. New cars can be pretty pricey and fitting payments into your monthly budget can be very hectic. The interest rate on the financing may be higher, but the total interest that you’ll pay over the course of a loan will be lower. This is because the price of a used vehicle is lower than a new one. The lower the price of the used vehicle, the lower the monthly payments you will have to pay. Additionally, you may have to pay an annual registration fee based on your car’s value and model year. This registration rate is the highest in the first 2-3 years. By purchasing a car that is at least 3 years old, you may save a few thousand dollars.
2. It Has a Lower Depreciation
The value of a new vehicle depreciates in an instant. The moment you drive it out of the dealership, the value of the vehicle drops by 11%. Considering you purchase a vehicle for $25,000 by the time you reach home, the value of the car will have dropped down to $22,250. The depreciation of the new vehicle continues over time you have the car. When buying a used car, you let the first owner deal with the massive depreciation hit. This will help you save a ton of money.
3. No Extra Fees
Even though an offer on a new car may seem very attractive, a lot of new cars have hidden fees that will shock you. Some dealerships add shipping charges and ‘dealer preparation’ fees as well. A few new vehicle prices entail hidden fees that can amount up to as much as $1,000. When buying a used car, you don’t usually have to incur any fee, but sometimes, you may end up having to pay up a few hundred dollars for documentation.
4. Less Sales Tax
Sales tax is based upon the purchase price of the vehicle. The higher the cost of the car, the more taxes you pay. The difference in sales tax between a new car and a similar vehicle 2 or 3 years old could amount to hundreds of dollars.
When you go to buy a new car, even though there are multiple companies with various vehicles, you will still find only recently-introduced ones. However, if you opt for buying a used car, you will be presented with a plethora of options – different makes, years, models, designs, etc. Many of these used cars will even fit your budget. You can also find great used cars in mint condition, such as the Chevrolet Cruze for sale.
6. Fleshed out issues
Another reason for buying a used car is that most of the first-year issues have already been flushed out. Regardless of the company that has built it, many vehicles have at least one obvious or notable issue. During the first year of a car launch, certain issues are bound to arise. So when you opt for a used car, you are already well aware of the issues that will be well documented by the previous owners, therefore, saving you thousands of dollars.
Since a car is one of the most expensive things you will purchase, you obviously want to be smart about your decision. For some people, a new car may seem good and affordable, but it isn’t a smart option. If you’re trying to manage your finances responsibly, a new car is an unnecessary expense, not to mention the damage being done to the environment by the manufacturing process. Don’t worry about the condition of the used car; you can get it evaluated by your mechanic or you can even opt for certified-used cars as they usually come with a better warranty.
Lastly, just ask yourself if you’re willing to spend thousands of dollars of your hard-earned money on a new car. Try looking beyond the sale price of the car and evaluate the total costs associated with it. This will help with your decision.
Mark has been involved with the auto industry for nearly 12 years in various capacities. He’s spent time with his sales and management and not to forget his new Chevy Malibu and has a passion for all things automobile.
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