Why buy a used car?
There are a number of reasons why an individual would want to buy a new car…prestige, lack of potential service hassles, the ability to get the latest model, etc. Why, then, are so many more used cars sold annually in the U. S. and Canada than new cars? In a word: Money. The initial cost of buying a used car will be less and someone else will have taken the bite of the initial depreciation. Many car buyers feel that to pay $3,000 to $5,000 or more for the luxury of having a new vehicle is too expensive a price to pay, especially when the bulk of that extra expenditure gets eaten up by depreciation when the new car is driven off the lot.
You will save money when buying a used car by not having to pay for certain items that are standardized on new cars. For example, the transportation cost is included in the sticker price of every new car, and absorbed by the new car buyer. In addition, new car dealerships will often charge for expensive “add-ons” that push up the price of a new car. A used car buyer saves money by not having to pay for such items. Plus, the lower selling price of a used car will equate to a lower fee to taxes, which are generally based on the vehicle price.
An additional advantage of used cars - over new is your ability to adapt a desired vehicle to your budget. If you are interested in a new vehicle, the price will be fairly well established. The car will have a Manufacturer’s Suggested Retail Price and an Invoice price (what the dealer pays for the car) and somewhere between those two numbers is the price you will pay. With a used car, because of variances in mileage and condition, your field of choices, and the prices you will pay are widened. For example, if you have decided that a 2003 Ford Taurus will best fit your needs and wants, you will be able to choose between cars that are in near perfect condition, with low mileage (and at a higher price) and those that have somewhat higher mileage and perhaps are in less than perfect condition (and at a lower price). With some mileage and condition concessions, you can get a car that you want at a lower price, or get more equipment and options without spending more money. You can’t do that with a new car.
For many consumers, because of the pricing structure of new cars (the average new car is well into the $20,000 plus range), there is no alternative. Their budge absolutely determines that they purchase a used vehicle, and they want to get as much value as possible for their dollars spent.