Stop! Read This Before You Buy a New Car
The standard price of an automobile peaked at just over $32k in 2018.
With prices of cars becoming one of the most expensive investments in life, it is important to manage your finances responsibly and optimize your options to get the best car for the best price.
Used cars are a quickly expanding industry with options that allow individuals to keep money in the bank without having to completely sacrifice quality. Below you will find 5 benefits you will immediately see from buying a used car.
1) Depreciation
The concept of depreciation is very unforgiving when dealing with the automotive industry. A new vehicle depreciates as much as 11% of its original value the moment it is driven off the lot. This means that if you were to buy a $20,000 vehicle, the value of the vehicle would drop by an alarming $2,200.
This is why used cars come at such a bargain. If you buy a vehicle that is two years old, it will still depreciate, but the rate in which the vehicle loses value is much slower. You are also able to avoid the initial drop in value.
2) Sales Tax
In almost every state, new vehicle purchases are subject to state sales taxes. This being said, it is important to perform research on your state's tax laws before basing your car buying decision on the savings from avoiding sales taxes. As a point of reference, in the state of Georgia if you decide to buy a used vehicle from a private party you are able to avoid paying any kind of sales tax at all. This can result in saving thousands of dollars.
3) Registration Fees
Registration fees are most commonly based on the value and make of the vehicle in question. In the state of Colorado, registration fees are at its highest during the first 3 years following the year the car was manufactured. By purchasing an older vehicle, on average you can find yourself saving just around a thousand dollars on a used car.
4) Dealer Fees
Dealerships are notorious for tacking on additional fees to new car sales. Things such as shipping charges, destination fees, and dealer preparation are all taken into consideration when preparing the final estimate for the car purchase. The alternative option, buying used, allows you to take on a much more controlled approach to the situation. With the proper knowledge on how to get the best used car, you are in a better position for negotiating and finding a price that is right for you.
5) Condition
Just because you are buying a used car does not mean that its condition has to suffer. Nowadays, most vehicles are manufactured with the intention of the car lasting a minimum of 100,000 miles. With the proper knowledge, it is very simple finding a used car that is "like new" for a fraction of its MSRP. If you are inexperienced dealing with automobiles, you can turn to certified guides and tutorials to help educate you on the best way to identify a good used car.
Conclusion
The concept of a new car is without a doubt, appealing. However, when taking into consideration all the additional fees that come with buying a new vehicle, the numbers quickly add up. By taking a moment to look into the additional fees the idea of purchasing a used car becomes more and more enticing. You might have to spend some additional time looking up some guides on how to buy the best used cars on the market, but you’ll thank yourself at the end of the day.
Greg Macke- Your Car Angel
Greg Macke is a car blogger and author of “My 7 Secrets to Buying a High Quality Used Car”. He is a professional car buyer and consumer advocate working closely in the industry to improve the buyer’s experience. His high quality car buying tutorials offer help to the car buying public. – See more at: https://carbuyingsupport.com
My wife and I need to get another car soon, so thanks for sharing this. I like your point about how you can save thousands of dollars on a used car because there aren’t as expensive of registration fees. I’ll have to look into what dealerships would waive this fees so I can save some money.