Benefits and Drawbacks of Purchasing a Used Car

Posted by at 11 February 2021, at 06 : 50 AM

Benefits and Drawbacks of Purchasing a Used Car

If you want to buy a used car, you are not alone. There are about 40 million cars that change hands each year. But with many choices on the market, finding the right used car can be daunting.

If you want the best pre-owned car, you need to consider several factors such as:

How Much Can You Afford? – Do you have sufficient capital to buy a car? If you consider a loan, ensure it’s not more than 20% of the total price. A pre-owned car needs extra attention: new tires, bodywork, maintenance, and more.

Have A Target List of Preowned Vehicles – Undoubtedly, Toyota Camry and Honda Accord are the best used car models. However, you might be forced to dig a little deeper into your pockets. So if you want to save some bucks, consider more than one brand.

Prices – The price factor depends on where you’re shopping for your used car. You can find them on websites from private-party sellers, in independent used car lots, or from car retailers. Typically, private-party cars are inexpensive.

The Car History – Unless you’re buying a vehicle from a family member or friend, plan to get a detailed car history report. The report reveals vital information, including if it has a salvage title or the odometer is rolled back.

Contact the Seller – Contacting the seller helps establish a relationship and verify the information about the vehicle. Ask a private-party seller why they’re selling the car and whether it has any mechanical issues.

The used car market is convenient for first-time drivers and individuals looking for affordable vehicles. But are these vehicles really worth it? We’ll take you through the benefits and drawbacks of purchasing a used car.

Benefits of Buying a Used Vehicle

It Saves you Money

Buying a used car is the best way to save your money. On average, you’ll spend 50% lower than a new vehicle. You’ll also manage to pay off your car faster, saving you some financing fees.

This ensures you have a lower monthly payment and still drive a car in good shape. It also means you can access financing and loans easily from reliable lenders such as Beaver County DCJR. This makes a used car an excellent investment, especially when on a tight budget.

When financing a car, ensure you don’t exceed 20% of your monthly income.

Lower Insurance Premiums

When you buy a used car, you’ll pay less for car insurance. As the car gets old and loses its value, the driver will decrease the insurance premium too. In most cases, old car owners remove collision and comprehensive coverages from the policy.

Decreasing monthly premiums saves you money to cater for fuel and maintenance costs. Be sure to get professional insurance services at the best prices. You can ask the insurers if they offer mechanical breakdown insurance to help you pay for repairs.

Easier Negotiation

New vehicles have a set value that hardly goes below sticker price. This makes negotiation challenging and hard to settle on a final price.

However, it’s different when it comes to used cars. Dealerships in this category are a bit more flexible as cars differ in value and price. When it comes to used cars, each vehicle comes with its price.

The price depends on the dealers, the status of the car, and mileage. You can work with a used car dealer to pick a vehicle that suits your budget.

Favorable Shorter Loan Terms

Today, the loan terms of new cars are nearly up to seven years. Most dealerships offer at least five years of car financing. It means you’ll take a long period to pay your car loan ultimately.

Conversely, used cars come with shorter loan terms. This is because they’re sold at a lower price compared to new cars. With a good credit history, it’s easier to get a shorter loan term.

This will save you money, time and enables you to pay off your car quickly. Even if you have bad credit, dealerships can offer a great way to rebuild the credit score.

Better for the Environment

The manufacturing and initial shipment processes produce almost a quarter of the CO2. It means more air pollution. Fortunately, buying a used car minimizes the carbon dioxide output into the air.

Hybrid cars use nickel-metal hydride, lead-acid, or lithium-ion batteries, which leave toxic waste behind.

Initial Depreciation Has Already Occurred

Often, consumers complain about how fast a new car depreciates the moment it gets on the road. The value drops by 11% as soon as it gets off the lot. It means if you bought a car at $20,000, once it leaves the lot, the value drops to $17,800.

The vehicle keeps on depreciating as months and years go by.

But with a used car, the bulk depreciation has already occurred. Surprisingly, some used cars may gain value!

Drawbacks of Buying a Used Car

Higher Interest Rates

As we mentioned above, you can access a car loan of a lesser amount and pretty fast. However, banks and lenders tend to charge higher interest rates on a used car loan.

When a car has traveled some miles, it becomes hard to isolate the resale value. The fewer the miles a car has tacked on, the higher the resale value. So when it comes to used cars with higher mileage, banks and other lenders see a higher risk.

Lack of Choice

When it comes to the used car market, your options are limited. You might find a vehicle with good suspension and engine, but it lacks desired features due to its lower variant. Alternatively, you may find a higher variant model but poorly maintained.


You might get stuck with a lemon. Most used vehicles don’t come with a warranty. These cars are appealing on the outside, but they can be costly in terms of repairs. Ensure you’re a very informed buyer and check every possible detail.

The Bottom Line

These are the benefits and drawbacks of buying a used car. You can consider this information and decide if purchasing a used vehicle is worth it.

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