A late model used car is can be thousands less than a brand new one, but that's not the entire equation. Value for money can be a tricky concept when trying to factor in accumulated depreciation, increased maintenance and lower cost of ownership. There are many sides to this story, and here are a few things to consider before making your purchase.
New cars deprecate rapidly, roughly ten percent the moment it's driven off the lot and 20 percent per year thereafter. A car costing $40,000 new can be had for roughly $25,000 after only two years.
The used car that meets your needs might not be the color or exact body style you'd choose, or it may be optioned differently.
A late model used car will often have years left on the warranty, giving the used car buyer extra peace of mind.
Technology advances quickly these days, and cars just a few years old might not have iPod docks, electronic stability control, and side airbags.
Services such as CARFAX and CarProof inform the buyer of any accident or flood damage the vehicle may have sustained, service and maintenance records, odometer readings, owner history and title issues.
Even though the dealer insists the car was owned by a little old lady from Pasadena and the vehicle history report backs that up, it's impossible to know whether or not she was a stock car racer on Saturday night.
Modern cars last a long time. The average age of a car on the road today is 10.8 years. Buying a car only one year old can save the buyer roughly 25 percent, while the car's useful life is reduced less than ten percent.
The car looks perfect on the outside and the interval maintenance records are all there, but there is no way to know if the car was run until completely out of oil before every service.
Because a used car is worth less, it usually costs less to insure it. Used car buyers can save cash every month.
Tires and brake pads, among many other items, wear out quickly and can be expensive. Even on a late model used car, these items will often have to be replaced and are not covered by any warranty.
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