Over 275 million cars are registered in the United States, with 92% of households owning at least one car.
It’s no secret that a car is no longer a secondary or luxury item. It’s a basic need. A car will make your life easier and freer.
Unfortunately, buying a car isn’t like buying a pair of shoes. New cars are big-ticket items, and their prices are increasing. This has left many prospective buyers considering the possibility of buying used cars.
Should you join the bandwagon? Here are the pros and cons of buying a used car.
Pro: Lower Purchase Price
The average price of a new car is now at $46,000.
Considering that many working-class people in the country are living paycheck to paycheck, it’s hardly possible to afford a new car out-of-pocket. You can go in for an auto loan, but you’ll still have to make do with high interest rates.
On the other hand, a used car is going for $20,000 on average. It’s still a hefty amount for many people, but it’s more affordable. Plus, there are auto loans for used cars, which means your monthly installments will be lower even if interest rates are high.
Pro: Wide Variety of Cars
The used car market has every type of vehicle you’d want. Whether you’re looking for a high-performance sports car, an electric sedan, or a rugged offroad monster, you’ll find plenty of options if you know where to look.
Even the year’s latest cars don’t take too long to hit the used market. Need a used 2024 Mazda CX-5? Keep an eye on dealerships like Cardinaleway Mazda Peoria and you won’t miss an irresistible deal.
The wide variety of cars on the used car market appeals to buyers with various budgets. Whether you need to snap up something for $5,000 or $50,000, you won’t be disappointed.
Pro: Slower Depreciation
A new car loses roughly 20% of its value in the first year. Although the rate of depreciation slows down in the following years, by year five it would have lost 40% of its value.
Car brands and models hold values differently, but it’s well-established that any new car will lose so much value in the first few years after being sold – even if it’s being driven sparingly.
The average car buyer wants a car that doesn’t depreciate quickly. You’ll likely sell the car down the road, and when that time comes, you want to recoup a sizeable amount of money.
The good news is used cars don’t depreciate as fast as new cars. By the time you’re buying it, it would have already lost much of the value it would lose over its useful lifetime.
Pro: Lower Insurance Costs
The cost of insuring a car depends on a number of factors, but the value of the car is the biggest factor. The greater the market value of a car, the more insurance you’ll pay.
As such, it’s a no-brainer that buying a used car will result in lower insurance costs.
Con: A Lot of Unknowns
Perhaps the biggest downside of buying a pre-owned vehicle is the uncertainty that comes with its mechanical history. Some sellers keep meticulous records of the car’s service and repair history, but can you trust them enough? It’s easy to make up records that paint a stellar picture of the car’s condition.
There’s a law to protect consumers from buying cars that turn out to be a lemon, but for used cars that protection varies from state to state. If you’re not careful, it’s possible to buy a car that looks fine and drives okay for a few days but breaks down later.
You can overcome this hurdle by doing business with a trusted used car dealership. Although you still won’t be able to verify the car’s history, you can bank on the dealership to sell you a quality car. It has a reputation to protect, so it won’t want to sell anyone a shoddy car.
Con: Higher Mileage
If you find a super-low mileage used car, it’s likely a classic. If you’re looking for a Honda Accord, Toyota Camry, or any other convenience sedan on the used car market, chances are you’ll get units with tens of thousands of miles.
Any experienced mechanic will tell you that 100,000 miles on a Camry is nothing. The car is capable of achieving 500K miles or even more.
However, the truth is that high-mileage vehicles typically require more maintenance and repair work. You can do an engine overhaul, but the car can still break down at a higher rate, and you’ll soon realize that it’s becoming a money pit.
You can work around the high mileage issue by choosing a reliable car model that’s known to last. Unless you want to spend all your money on repairs, it’s best to avoid used, European luxury cars. They’re a joy to drive when new, but as they rack up the miles, they’re prone to serious issues.
The used car market is open to everyone, from dealerships to individual sellers. This has provided the perfect environment for scammers to con unsuspecting buyers. From title washing to odometer rollbacks and VIN cloning, there are all kinds of scams in this market.
If you let your guard down when shopping for a used car, you can walk right into the path of a scammer who will not hesitate to con you of your hard-earned money.
To avoid being scammed, do business with a reputable dealer. Everyone knows this. However, the allure of great car prices offered by individual sellers can be irresistible.
Of course, there are plenty of legitimate individual used car sellers, but you increase your chances of being scammed when you start dealing with such sellers. Unless you know scam signs to look out for, you could realize you’re being scammed when it’s too late.
Know the Pros and Cons of Buying Used Cars
Understanding the pros and cons of buying used cars is key to making an informed decision. Overall, a used car can be a great purchase, but a lot depends on your diligence during the purchase process. Find a great car at a great price and you’ll be a happy car owner.
Read the car section of our blog for more automotive insights.