So, you want a new car but do not have the resources for it? Enter the used car market – a huge and massive market that will get you your favorite car at a cheaper price, albeit with some caveats.
The car industry is just going day by day, and almost every single household in the US owns at least one car, if not multiple. If you are someone who does not own a car yet, especially in these times of social distancing, it is only sensible to get your own car and avoid public transportation.
In the second-hand car market, you can find a plethora of options to choose from, but everything that has advantages also has disadvantages.
You must be fully aware of what you are getting yourself into. Want a sedan? Honda Civic, Toyota Camry, Mazda3. Want a crossover SUV? Buying a Nissan Rogue, Honda CR-V, or Mazda 3 might make the most sense, especially since these cars are very popular and readily available in the used car market as well. However, here are the pros and cons of buying a second-hand car:
• Pricing of the car
The obvious advantage of owning a used car is the price at which it is accessible. You do not have to pay the price of the car brand new, and depending upon various factors, including your luck, you might be able to strike a pretty sweet deal and get your favorite car at a much cheaper rate. Also, cars that depreciate faster will drop their value quickly and after a few years, be available for less than half the price.
• Trim upgrades
The depreciation factor is the biggest reason the used car market is so popular. But it also allows you to get a high-end trim of your favorite at the price of the base trim, or lower. If you buy a car launched a year ago, the top-end trim will have dropped in value and you might be able to grab all the bells and whistles of that model by paying the price near the base trim. This is especially applicable for cars that have expensive top-end trims.
• More accessible options for loans
This is another “duh” moment. Obviously, since you have to pay less, you also have to apply for a lesser amount of loan. If you cannot afford to repay the loan for a new car, then getting a used car is the best method, since you also need to repay a lesser amount in total. A lesser loan also means less interest. Overall, you will have saved more than you would have with a new car loan.
• Lower insurance premiums
Did you know that you can also claim the car with lesser insurance premiums if you buy a used one? If you find a used car that’s no more than a few years old, then the previous owner must have already paid the previous premiums, which are usually the ones that cost the most.
Now, you don’t have to burden yourself with dishing out more cash to complete the insurance. Of course, having insurance is a must, be it a car or any major property you own.
• Warranty benefits
This applies if you purchase a car from a brand authorized dealership, not an individual. Having a warranty is a must, no matter which car you buy. You don’t want to spend tons of money on repairs not covered under warranty.
If you purchase a car from a dealership, you get their warranty benefits. But not only that, if the car is covered under the factory warranty, then you are eligible for both. When the factory warranty ends, the dealership’s warranty activates.
Well, this is one obvious con of buying a used car. If you are attracted by a sweet deal that’s selling a car for unbelievable rates, and you don’t do your adequate research and purchase, you are most likely going to regret it.
Maybe the car has an underlying issue and keeps breaking down every now and then. It would cost you more to repair than the money you paid to buy it. Most scams also ask for your money in advance and vanish. Be careful about such scams.
• Purchasing from individuals
If you want to purchase a car from an individual and not any dealership, you will not be entitled to a few schemes, such as the warranty we discussed previously. You will only be entitled to the car’s factory warranty scheme and if it has run out, you will not get any warranty.
Also, the one you are buying it from, will not offer you any personal warranty and it stops working randomly, you are on your own.
• Higher interest rates on used car loans
Sure, applying for a used car loan will allow you to pay for the lower overall price, as compared to a brand-new car. However, you must also be aware that loan providers usually charge more interest on a used car than a new car.
In such cases, you would have to end up paying higher interest rates, as you would be left with no choice. The principal amount might be low, but the interest rate would be higher. Still, you would be saving money overall, but not by a huge margin.
• Less research might lead to trouble
You must be very specific about the type of car and the exact car you want. However, no car is perfect. Every car has its own catch. If you are buying a used car, you do not want to end up buying an unreliable car that breaks down more often than you would like. Research about the car on J.D. Power and read user reviews.
Also, make sure to check the miles driven on the car. If you do not make sure of the condition of the car, you will regret it later.
• Restricted choice
When shopping for a new car, you can buy any car you want and configure it exactly how you want it. From the color of the interior to the size of the wheels, to the packages; you have total control. However, when browsing the list for used cars, that isn’t the case.
You are heavily restricted on the choice of options and you would have to dig very deep to find your needs. This might cause some discomfort while shopping for used cars.