Searching for a new car is an exciting experience, with a chance to view and test drive a range of options before settling on your final choice. Deciding to go brand new, however, has its drawbacks – not least in terms of its impact on your wallet. In this post, we’ll explore one of the key reasons why buying used cars is often preferable to purchasing a brand new model.
It almost goes without saying that one of the main pros of buying a used car is the reduced cost. Not only are they less expensive at the outset, they also don’t depreciate to the same level that a new car does. Of course, the rate of depreciation varies between makes and models, so it’s worth knowing the facts.
Depreciation refers to the difference between the value of a vehicle when you bought it and what it’s worth when you sell it. New cars are estimated to lose, on average, around 20 percent of their value upon leaving the dealership, with drops varying from 15-35 percent in the first year. Depreciation over three years can lead to a 50% decrease in value. In comparison, a car bought at three years old has a much more stable depreciation rate.
Several factors affect the rate of a vehicle’s depreciation:
People buy used cars in order to avoid the rates of depreciation that new car buyers experience, but there are other reasons too. For example, new car buyers often add features which, at the time, cost a little extra. These might include Bluetooth connectivity, heated seats or an upgraded sound system. A significant pro of buying a used car is that you benefit from the added extras without paying such a big additional fee.
There’s also the advantage of a large choice of vehicles readily available, meaning you can pick up your model within a few days or weeks, rather than having to potentially wait months for the car to come off the production line.