Used Car Finance

Cheaper

Buying a brand new car is simply not in the budget for many families.  New cars are very expense.  Some dealers will help new car owners get a 6-7 year loan, just so they can drive it off the lot.  Even with a decent down payment, the regular payments take a big percentage of the monthly budget.  In some cases, the financial hardship eventually requires the owner to sell the car at a loss, and downgrade to something a little more affordable.

Conversely, buying a used car is significantly cheaper than purchasing the same make and model brand new.  The car payments per month are not quite as steep and the length of the loan means the owner is not financial strapped by car payments for quite as long.

New cars depreciate the moment the owner drives the automobile off the lot.  If it’s an individual that likes to purchase a new model every couple of years, the car might seem almost like brand new, and still have fairly low mileage, for a great deal less than its newer counterpart.

License Plates

In many states, the yearly cost of license plates depends on the value of the vehicle.  The more the car is worth, the more it costs to buy new tags each year.  Purchasing plates for a new car runs into several hundred dollars.  

After making the down payment on the car and paying the initial insurance premium, some drivers have to scrimp and save for the plates.  For this reason, there is usually a six week grace period, because it’s hard for many automobile owners to come up with the money.

Conversely, the plates on a used vehicle are significantly less.  Because the value of the car has decreased, so has the cost of plating the car.  In fact, if the car is a few years old, the plates will cost the minimum amount billed to any car that uses public roads.

Insurance

Depending on the value of the car, the month insurance premium is expensive.  In fact, the monthly cost may be as much as what some people pay for their car payment each month.  Between the car payment and the insurance, many drivers are paying as much or more than they pay for housing.  It might seem like they should be living out of the car, in order to make the expense really worth it.

For families with teenage drivers, insuring a brand new car is even more expense.  Insuring teens, especially boys, increases the month premium by as much as 200 percent.  It saves a significant amount of money to purchase an older car that is still dependable.  If there is no lien on the automobile, parents or guardians are only obligated to purchase a policy with liability.  If the teen is required to get a part-time job to pay for his/her own gas and insurance, as well as make the car payment, the privilege of driving is so much more affordable.

Tried and Tested

Some automobile owners preferred buying a used car, because they have already been tried and tested.  Anyone that has purchased a new car and had to send it to the shop, for some sort of defect, knows the benefit of buying a used car.

If there was a problem with the car, when it was purchased brand new, the previous owner has already had it in the shop for repairs.  Although still under warranty, the inconvenience of temporarily finding new transportation is frustrating and costly.  By purchasing a car that is only a year or two old, any operational failures that have classified it as “a lemon”, in the past, have already been corrected under the warranty.

Anyone who has purchase their first new car can still remember the feeling of being the first owner to sit behind the wheel.  The smell of the brand new car lasts for several months. However, those temporary feelings might soon be replaced by the stress of becoming financial enslaved to the automobile.  

In short, between the monthly payments and the insurance premiums, the privilege of driving might cost about as much as an apartment or house.  But, the biggest financial burden initially occurs at the time of purchase.  New cars require a larger down payment and more money is spent for taxes and license plates. Plus, there is no guarantee that a new car will be any more dependable than a used vehicle.  Some consumers get stuck with a “lemon” that is constantly in and out of the shop for some recurring problem.  For these reasons, buying a used car simply makes more sense to a lot of motorists.