The new car race is a real thing and today it is alive and well. There is something seductive about the smell of a new car. But if you’re worried about your long-term financial well-being, it makes sense to opt for a used car. You can also significantly improve your ROI by asking a simple question.
Why buy used instead of new?
For the most part, cars are discounted. This means that they lose their value over time. In fact, as soon as you leave the parking lot in your new car, its value drops. The time of the greatest depreciation of vehicles falls on the first two to three years. Let’s take a look at a small example:
The first car is new and costs $ 30,000. In three years, it could run about 40,000 miles and cost less than $ 11,000. This is 64% depreciation.
For the second car, let’s look at the same make and model, but it’s already three years old. Buying it for $ 10,800 and operating it over the same three-year period, now that it is six years old, it will cost $ 5100. While this is still 50% depreciation, opening and closing balances are important.
In the first example, the car lost about $ 20,000 in value over three years. In the second scenario, you only lost $ 5,000 in the same period of time. By investing in used cars in tempe for sale, you save a significant amount of money.
If you add a car loan, which is typical of buying a new car, the math will work even more in favor of used cars for sale. When you buy a car on a loan, you pay interest on that loan. It’s like getting hit from both sides.
A typical 60 month loan at 4% will net you an additional $ 3,150. This is more than 10% of the total cost of the car when it was new for the same $ 30,000. But of course, 5 years later, you paid $ 33,150 for a car that now only costs about $ 7,000.
If you buy an entire three or four year old car, you will benefit from depreciation and interest on the new car loan. An added advantage of used cars is that with full and full payment, you can almost always get a discount. Be sure to ask for a cash discount!
Benefits of buying from a private seller
With private sellers you can get more information about the vehicle, some people know about everything that was done, some were the only owners. You can get more extra services like upgrades, custom sound, etc. One day, the salesman gave us a complete maintenance guide, a few new parts that he was never able to install, and a code reader. You may also find that cars can be in better condition both outside and inside.
Tips for private sellers: Make sure the name is in the name of the seller; compare the vehicle identification number (VIN) on the name with the vehicle number. Bring the upsell and title claim in case the seller doesn’t have one. Make sure the seller signs the front and back of the title deed and title request forms. Whenever possible, be sure to meet in a public place.