Should you buy a used car?
Prices for new cars are going through the roof in Fort Collins and Colorado. With inflation driving up prices, rising interest rates, and clogged supply chains, many people are priced out of the market. Not to worry -- buying a used car can be a great alternative.
There are a lot of great reasons to purchase a used car. While you will need to do some research and purchase a high-quality vehicle, you can find significant savings. Furthermore, most customers experience the same level of satisfaction from owning a used car and having safe and reliable transportation for many years.
Used automobiles are much cheaper
A car with three or four years of use will be nearly 50% less expensive than a brand-new car. That means you can pay the bank off faster (if you get a loan) and save a pile of cash on financing fees. Used cars are a great option for people with a lower FICO score because your loan is smaller, but keep in mind that banks usually charge a slightly higher interest rate to purchase a used car.
Your FICO score will determine the annual percentage rate you will pay. In 2022, with a great score of 750-800, a used auto loan will run about 6%. With a lower score of 600, your APR will be around 12-15% to finance a used car.
Consider also that when you buy a new car, you pay a premium, and the value depreciates quickly. An older car has already experienced the initial steep depreciation and is now depreciating at a much slower rate. You lose less value over time.
Avoid hidden dealership fees
Anyone who has shopped for a new car soon finds out about the swarm of add-on fees from a dealership. Many new car prices include hidden promotion fees that can easily exceed $1,500. These include destination fees, dealer prep fees, and shipping charges. When buying a used car, especially from a private party, you'll avoid these add-ons.
New cars often have dealer add-ons. While these amenities increase the comfort and performance of the car, they come at a heavy price markup. Common add-ons include anti-theft devices, nitrogen in tires, window tinting, chrome-plated wheels, all-season floor mats, splash guards, wheel locks, cargo trays, and alarm systems. These extras are often overpriced. With a used car, you may install your own at a lower cost and with the money you saved by purchasing the car used.
Warranties are transferable (a new owner receives the full benefits of the original owner), and often a used car that has under 100,000 miles still has its original warranty and will be covered for major repairs. There are some very good aftermarket warranties you can buy if the car is a good make, still has low mileage, and is in good condition. Most cars can be insured this way for just a few dollars a day. These extended warranties can provide highly trained technicians to repair your car with good factory-warranted parts.
Lower insurance premiums
Insurance rates are based on a number of factors, and the age of the car is a big part of this. New cars have higher rates, and the older the car, the more you can expect a substantial lowering of this rate. SUVs and minivans are the cheapest to cover because they are family-oriented models that are driven carefully and are inherently the least expensive to repair. According to the American Institute of Insurance, the average annual rate to insure these cars is in the mid-$900 range; luxury cars and muscular high-performance models are the most expensive to insure because they are more expensive to repair and are driven more aggressively.
Lower registration fees
The registration fee for your vehicle is determined by its value and year of manufacture. While rates vary from state to state, in most, the highest rates are assessed in the first three years of ownership, then drop to around 60% after five years. You can save over $1,000 on annual registration fees by purchasing a car at least three years old.
If new car prices are too high, consider buying a used car. They provide numerous advantages, such as good value, easy customization at your own pace, lower insurance rates, and lower registration fees. If you are concerned about the car's quality, you can always purchase an extended warranty to cover major repairs. Used cars are a dependable and cost-effective alternative to new cars.
If you Need an Honest and Reliable Mechanic Call Weston Automotive
Weston Auto Service is an auto repair specialist located in Fort Collins, Colorado. We are ASE-certified mechanics specializing in foreign and domestic auto repair. For any car maintenance issue, we always recommend using a certified mechanic. For a free diagnostic and full analysis of your car problem please contact us or call us at 970-377-3333.