Exploring the Pricing Between New and Used Cars
How does the price of purchasing a new car compare to leasing the same vehicle? Further, if you choose to purchase a used car, how much would you normally save over buying a new car? It is difficult to give one answer covering all people and situations. However, here is the short version: it's highly recommended to purchase a used car, pay it off, and keep it for several years. That's especially true if your main concern is making the most sensible financial decision. Buying a used car over a new vehicle is an excellent option for most drivers. As inflation rates increase in the country, Americans are seeing impacts at the grocery store checkout and the gas pump. New Car vs. Used Car Costs Going for a used car instead of a new one could save you a huge amount of money in many ways. For instance, a used car will cost less based on sticker price alone. However, that is not where the savings stop.
You'll be reaching for your wallet less than if you drove a brand-new car regarding insurance, fees, and car depreciation.
According to Experian, the average monthly payment in the third quarter of 2021 for a used car is $465. Meanwhile, drivers financing a new car paid closer to $609. Saving more than $100 per month adds up fast, and you could save thousands of dollars by going for a used vehicle over a new one.
Paying a lower purchase price for the same vehicle model of a different year is the apparent reason to purchase a used car, but there are more.
1. Lower customization costs
You don't need to settle for costly dealership add-ons when purchasing a used car. Also, you may install your own at a cheaper cost than on a new vehicle.
2. No exaggerated fees
A deal on a new vehicle may look cool, but most new cars have crazy or hidden charges like shipping fees, destination costs, and dealer preparation. Other new car prices also involve hidden advertising costs as high as $1,000. Meanwhile, a used car has no hidden charges, but you may still be charged a doc fee of a few hundred bucks.
3. Lower insurance costs
Insurance costs differ based on your credit score, age, location, mileage, and driving history. Normally, insurance for a used car is more likely to be lower than that of a new car. A crucial factor in identifying the cost of vehicle insurance is the car's value. A used car has less value than its newer version, and thus, the cost of insurance must be less. When it comes to suggested coverage, if your car is older, you may wish to consider liability if your state permits it versus adding collision coverage if your car is newer. Still, insurance rates aren't consistent. To save money, make sure to compare your rates and learn your anticipated insurance cost before dropping off the dealership lot. Overall, buying a used car is an excellent way to get behind the wheel without spending as much as possible on a new car.
You'll be reaching for your wallet less than if you drove a brand-new car regarding insurance, fees, and car depreciation.
According to Experian, the average monthly payment in the third quarter of 2021 for a used car is $465. Meanwhile, drivers financing a new car paid closer to $609. Saving more than $100 per month adds up fast, and you could save thousands of dollars by going for a used vehicle over a new one.
Paying a lower purchase price for the same vehicle model of a different year is the apparent reason to purchase a used car, but there are more.
1. Lower customization costs
You don't need to settle for costly dealership add-ons when purchasing a used car. Also, you may install your own at a cheaper cost than on a new vehicle.
2. No exaggerated fees
A deal on a new vehicle may look cool, but most new cars have crazy or hidden charges like shipping fees, destination costs, and dealer preparation. Other new car prices also involve hidden advertising costs as high as $1,000. Meanwhile, a used car has no hidden charges, but you may still be charged a doc fee of a few hundred bucks.
3. Lower insurance costs
Insurance costs differ based on your credit score, age, location, mileage, and driving history. Normally, insurance for a used car is more likely to be lower than that of a new car. A crucial factor in identifying the cost of vehicle insurance is the car's value. A used car has less value than its newer version, and thus, the cost of insurance must be less. When it comes to suggested coverage, if your car is older, you may wish to consider liability if your state permits it versus adding collision coverage if your car is newer. Still, insurance rates aren't consistent. To save money, make sure to compare your rates and learn your anticipated insurance cost before dropping off the dealership lot. Overall, buying a used car is an excellent way to get behind the wheel without spending as much as possible on a new car.