Are used cars better than new cars?

When the time comes to get a new vehicle for you and your family, it is tempting to consider buying new cars as the best option and smartest choice. However, you will need to you should take a long and honest look at how much you are truly able not spend on a vehicle and how much you could save in the long run by going with used cars instead.

According to a recent report that was released by the National Automobile Dealers Association in 2017, the average person will own around 13 cars in a lifetime, each with an average price tag of around $30,000.

If each of those cars had been purchased at 3-5 years old rather than new, one could end up saving as much as $130,000 in car payments during your lifetime!

The real factor that makes buying used cars such a big money-saver can be summarized by that one dreaded and sinister-sounding financial word: depreciation.

Understanding how depreciation works and how it affects buying used vehicles is important to the decision-making process so, let’s take a look at two similar cars, and compare them based on whether they are new or used:

New car depreciation: The car is purchased with a loan for $30,000. You end up selling it a few years later and get only $15,000. The car ended up costing $15,000 in depreciation.

Used car depreciation: Now let’s assume you find the exact same car in a used car lot. You buy it with a loan for $15,000. Three years later you end up getting $10,000 for it. So the used car only had $5,000 in depreciation.

Now some people say that driving a brand-new car is much better, the car looks nicer, it works better, and the list could go on.

This is all true so if driving a new car is that important and you can afford the extra $10,000 then go for it. But remember that depreciation also needs to be considered before making your final choice for your next vehicle, whether you end up with a new car or used car.