4 Smart Financial Reasons To Invest In A Used Car Instead Of A New Car
ShareWhen you need a new vehicle, you don't need to think brand-new. Instead, think about a used vehicle for your driving needs. There are lots of great reasons to invest in a used vehicle instead of a brand-new one.
#1 Lower Insurance Costs
When you purchase a used vehicle, it is not just the overall price of the vehicle that you are going to save money on. You are also going to save money on your insurance costs as well. When you purchase a used car, you are going to pay less for insurance than if you purchased a brand-new car. This is because the value of cars depreciates over time, and since your vehicle costs less, it will cost less to insure.
#2 Lower Registration Costs
In many states, the cost of registering your vehicle is directly tied to the overall value of your vehicle. When you purchase a used car, which has a lower recognized value over a newer vehicle, you are going to save money on your registration as well. If you live in a state where the value of your vehicle impacts car-registration costs, it can pay to go for a used vehicle.
#3 Less Depreciation
Cars lose their value the fastest in the first few years that they are on the road. When you purchase a new car, the value of your car drops as soon as you purchase it. Once you drive a car off the lot, it has already lost 10 percent of its value. That means if you paid $20,000 for the vehicle, it's only worth $18,000 if you try to turn around and sell it the next day.
Over the first five years, most vehicles lose about 60 percent of their value. So that $20,000 brand-new vehicle may only be worth $8,000 if you try to sell it in five years.
On the flip side, older vehicles don't depreciate at such a fast rate, and you don't have to invest as much into a used car. If you purchase a used car that is worth $8,000 and is five years old, when you try to sell the vehicle in three years for $7,000 to $5,000 dollars, you will have "lost" less money in the depreciation value of the vehicle.
#4 Better Financing Terms
Finally, when you purchase a used vehicle, you can enjoy lower monthly payments as the overall cost of the vehicle is lower. You can also go for shorter financing terms so you are not paying the vehicle off for as long. Or if you save up, you may even be able to afford the vehicle for cash.
Purchasing a used vehicle, such as used Kias for sale, is a smart financial choice. It is a great way to save money on your vehicle registration and insurance costs. A used vehicle holds its value better than a newer vehicle and often comes with better financing terms. If you are looking to be smart with your money, consider investing in a used vehicle.