Top 10 Advantages of Buying a Used Car

The price of new cars is at an all-time high due to a worldwide microchip shortage. New car purchases in February of 2023 were 30% higher than the same month three years ago. As you venture into purchasing a new vehicle, you may want to consider purchasing a used instead of a new vehicle to stay within your budget.

Here are even more benefits of buying a used car. 

10 advantages of buying a used car 

Purchasing a vehicle is both a large commitment and a decision. The following are some points to weigh as you consider buying a used car.

1. Less depreciation  

Depreciation is the difference between what you paid for the car and what it's worth is later in time. The largest drop in depreciation is in the first year and typically drops 15 to 20% in that first year. By purchasing a used car that’s a year old, you can save that 15 to 20%. If you’re able to purchase a used car that’s at the three-year mark, you could save around half the original cost of the car. 

2. Lower purchase price 

When considering the depreciation statistics, it’s clear that your overall purchase price will be lower. Let’s say the make and model you want purchased brand new is $45,000. If you account for the 15 to 20% depreciation in the first year, you could save between $6,750 and $9,000. To get the most accurate estimates though, it’s important to factor in the make and model of the car. You can utilize tools such as a depreciation calculator online. 

3. Lower insurance 

There is no different policy for a used car vs. a new car, but generally, a used car is cheaper to insure because they are worth less, and therefore cheaper to repair or replace. However, there are many factors that determine your insurance costs in addition to the age of the car including the make, model, your age, your driving record, and where you live. 

A Chevy Silverado, for example, costs about $1,323 to insure when brand new, $1,267 when five years old, and $1,077 when 10 years old. To lower costs even further, if your car is older, you may want to consider doing liability only vs comprehensive and collision coverage if your state allows it. 

4. Wider selection 

When shopping for a car, you have access to all the current models, both older and newer. But if you open your search to used cars, you create a wider selection with models that have been discontinued or paused. So if you love the GMC Sierra 1500, but recognized production is paused, you can still snag one if you’re open to buying it used or getting a car subscription for it through FINN. 

Additionally, with the money you save upfront when buying a used car, you can potentially get a higher class of car or one with more amenities. For example, you may only have a budget that allows you to get a base class of a Nissan Kicks, but if you purchase a used car, you could get a higher class for the same amount of money.

5. Environmental benefits 

Whenever you’re purchasing something brand new, you’re increasing your carbon footprint. By purchasing a used car, you’re essentially reusing or recycling. Researchers have found that keeping older fuel-efficient cars on the road longer reduces CO2 emissions. The industry has years under its belt now for developing more fuel-efficient cars so that buying them used is completely feasible. 

The Clean Air Act regulates states and their vehicle emissions, but certain states are taking it a step further and are moving to manufacturing only hybrid vehicles. California is the state taking the lead on this, but other states like Washington, Massachusetts, New York, Oregon, and Vermont are also going above and beyond with stricter standards. 

6. Extended warranty / certified pre-owned programs (CPO)

With any car, there is no telling when it will need repairs or services. However, an extended warranty can be a possibility to save you money in the long run. Looking at reliability ratings can give you some insight as to whether the car will need many repairs or not. In order to find out how much coverage is left, it’s best to call the dealer’s service department and provide them with the 17 digit vehicle identification number (VIN). 

Certified Pre-Owned (CPO) cars differ from a typical used car in that they offer a multipoint inspection, an extended warranty, and other incentives such as roadside assistance at no extra cost. Each car company has its own qualifications including mileage and condition. You can find online calculators to compare various car manufacturer’s CPO programs.

7. Improved reliability 

A vehicle history report (VHR) provides information about the ownership and repair history of a car. Think of it like your own medical chart and history. Using the car’s VIN, you can utilize reputable services such as AutoCheck or CARFAX to get a free VHR. This will get you a basic report, but if you want more detail, you may need to pay the subscription cost. Once you receive your report, it’s important to read it carefully and understand the details included.

If you’re working with a dealer, ask for them to run the VHR for you. They should oblige as they should want to be as transparent as possible with you.

When evaluating the VHR, keep in mind that the average car lasts around 12 years or around 200,000 miles, sometimes even 300,000 if you provide regular maintenance. 

Alternatively, with a car subscription service like FINN, you also get the peace of mind to know that the car is safe, reliable, and have access to the history of the car. 

8. No hidden fees 

Purchasing a new car is a process. Typically there’s a lot of game play occurring between you and the salesperson that a majority of people don’t want to engage in. Additionally, the price that is presented is rarely the price you walk out with in the end. This is due to hidden fees that are tacked on such as documentation fees, reconditioning fees and advertising fees. With a used car, whether you’re buying from a dealer or an individual, the price you see is the price you get. 

9. Lower registration fees 

All car owners must register their cars in the state they live in. This enables the government to identify who the car belongs to, and the state requires a fee to register the car. The way states calculate the registration fee can vary, but 24 out of the 50 states have determined a flat fee for all vehicles. 

Of the 26 states that don’t calculate based on a flat fee, they take a number of items into consideration to calculate their registration fee. This can include items such as the car’s current value, age, weight or fuel efficiency, the number of cars registered in the owner’s name, and even horsepower. So in the case that your state calculates fees in this way, you could potentially have a lower registration fee than when purchasing a new car.

10. More reviews 

When you purchase a brand new car, especially a new model, you’re taking a leap of faith as far as its long-term performance. When you purchase a used car, you are able to access a lot more feedback from places like social media, YouTube videos, and car forums. Knowing this can help you in your decision and whether or not you feel the purchase is worth it or not. 

So, should you buy a used car? 

After reviewing the benefits of buying a used car, it seems clear that purchasing a used car is an option to pursue. You avoid the bulk of depreciation and benefit from a lower cost because of it. You also benefit from lower rates on insurance and registration and have a higher peace of mind, all while benefiting the environment. Now let’s take a look at the process of purchasing a used car.

Tips for buying a used car 

• Establish your budget - Determine how much you can afford and what you’re willing to pay.

• Determine which features you want or need - Make a list of what features you need, which would be nice to have, or which would be deal breakers if you didn’t have them. 

• Research reviews - Do your due diligence and comb over the reviews and long-term performance of cars you’re becoming interested in.

• Find good used cars - There are many options when looking for used cars that can be overwhelming. You can go the route of online marketplaces, online auto retailers, or the traditional private-party sales platforms.

• Price your own car - If you already own a car and are looking to sell it, you can try doing it yourself or going to a dealer so they can give you an instant cash offer.

• Line up financing - Research your options for financing. You can either go with a dealer if that’s where you’re purchasing from, or you can try getting a loan from a bank or credit union.

• Get the vehicle history report - Before you get too attached, make sure you get a chance to look over the car’s vehicle history.

• Test drive - Make sure you test drive the car so you get a feel for it and that you actually enjoy driving the car.

• Do the paperwork - Once you decide to purchase the car, do the paperwork such as transferring the title and registering the car, as well as contacting your auto insurance carrier to ensure you’re insured from day one. 

Alternatively, you can skip this entire process if you go with a car subscription service like FINN. Choose a term of 6-12 months and pay one monthly fee, which includes insurance, maintenance and roadside assistance. Get approved in minutes and have the car delivered straight to your doorstep. Find your car today.

Final thoughts

When it comes to purchasing a car, open your consideration to used cars. It can expand your options while also saving you money in many ways. However, the process can be involved. To avoid the process but still reap the benefits of purchasing a new car, check out the advantages of pursuing a car subscription service like FINN.