Popularity and Strong Resale Values
Depreciation is usually a reason to buy used instead of new,
but vehicles in high demand will have a higher value. For instance, new
vehicles that sell for more than the dealer's list price suggest stronger
resale values and less depreciation. Certain brands have lower depreciation and
stronger resale values because of their quality and reliability records.
While depreciation may not matter initially to you, it will have an impact when it comes time to trade in your vehicle, so it's worth considering when you buy a new car.
While depreciation may not matter initially to you, it will have an impact when it comes time to trade in your vehicle, so it's worth considering when you buy a new car.
Better Finance Rates
While a used car may initially cost less than a new one, the
interest rate you pay likely will be higher. To begin with, you wouldn't get
the low-interest financing or cash rebate that usually is offered as an
incentive to new-car buyers. Furthermore, financial institutions generally
charge a higher rate of interest on loans for used cars — usually a full
percentage point or two. However, some of the automakers' certified pre-owned
programs offer discount financing.
Available Features
When you buy a used car, you get the state of the art — of
the year of the used car. Every model year, manufacturers add and adopt
technologies and features to vehicles either as standard or optional equipment
as a way to lure buyers to new cars. Those technologies may be safety
breakthroughs or they may just be convenience gadgets. The only way to get the
most advanced technology and the latest convenience features is with a new
vehicle. Automotive electronics are evolving so rapidly that unless you buy a
new car, your vehicle's technology is already outdated.
Used-Up
Finally, some 1- and 2-year-old used cars on dealers' lots
are former rental cars. Rental cars generally get considerable use and abuse in
a short time, so they may not be good choices. Some leased vehicles may offer a
better alternative. Leasing companies carefully inspect the vehicles before
they put them up for sale. People who lease are charged for all necessary
repairs. This policy encourages people who lease vehicles to take care of them.