Is It Better to Buy a Used Car or a New Vehicle?
Being in the market to buy a new car can be overwhelming, especially with all the ways to buy a car these days. The internet has made the new and used car market easily accessible to all, but the debate is still ongoing about purchasing a car with 0 miles versus 30,000 miles.
The truth is that buying a car is personal, so the real question is, what is better for you? Most car buyers are focused on value; that is why at Eastern Automotive, we believe buying a used vehicle tends to be the better choice for shoppers.
If you are trying to decide if you should buy a used car or a brand-new car, here are some factors to consider.
New Car Versus Used Care Depreciation
What is depreciation? It is the reduction of value over time. The rate of depreciation on brand-new vehicles tends to be accelerated. A new car can depreciate as much as 30% in the first year you own it.
Depreciation is not a tangible loss that owners can see, that is until they decide to sell their “new” vehicle. After a couple more years, your brand-new purchase may only be worth half of what you paid for it.
A huge percent of the depreciation has already occurred before you purchase a used vehicle. The previous owner most likely took a significant loss. That is why you can buy a used car at a much lower price, just a year or two after it rolled out of the factory.
Think about a vehicle’s value and useful life as a percentage if that helps.
Someone who bought a new 2018 vehicle decides to sell it after 30,000 miles in 2021. This hypothetical vehicle can reliably go 150,000 miles, so it still has 80 percent of its useful life left.
Now you have a chance to purchase 80 percent of that useful vehicle life for half (or less) than what the original owner paid for it in 2018. The vehicle is just as good and still has all the bells and whistles you’d expect from a nice modern vehicle – it’s just half off.
Affordability and Loans
Financing a new vehicle purchase with a long-term loan often leaves people with a lot of extra accrued interest on an asset that’s already lost a ton of its value. By the time you finish paying a new car loan, you may have paid $45,000 for a vehicle that you can only sell for $20,000 (if you’re lucky).
Financing a pre-owned car often lets borrowers:
- Take out less money
- Pay off loans quicker with far lower monthly payments
- Accrue less interest
- Avoid huge losses due to depreciation
Less Expensive Car Insurance and Registration
Most used cars will have lower auto insurance premiums than new vehicles. Renewal tags are also generally cheaper on pre-owned cars, trucks and SUVs. These expenses are essential to take into consideration because they must be paid monthly (insurance) or every two years (Maryland and Virginia registration renewal).
A New Feel
Just because you are buying a used car doesn’t mean it has to be old and outdated. You can buy a practically “new” used car without eating the depreciation cost of a brand-new model. Plus, even pre-owned vehicles are new to the buyer.
Also keep in mind that reputable dealerships like Easterns Automotive perform thorough checks and restorative maintenance to make sure they’re only selling reliable pre-owned vehicles.
Get Access to Way More Vehicles in Your Price Range (Including Luxury Cars)
Buying used also opens up your options to purchase a luxury car that would be out of your price range new. You can get the speed, sporty look and the luxury aesthetic and features for far less than a brand-new model.
Luxury cars also depreciate faster than most other vehicles. In some cases, last year’s luxury car model can be half the price when purchased used.
Make the Smart Choice by Buying Pre-Owned in Baltimore and Washington, D.C.
If you want to save the most money, opting for a used vehicle is almost always best. If you are in the market to purchase a car, we recommend seeing what Eastern Automotive has to offer. We are committed to serving local Maryland and Virginia drivers with the best pre-owned vehicles, affordable prices and flexible financing options.
If you are looking for a used car, call us at (877) 867-1357 or visit one of our eight Virginia and Maryland locations in Washington DC, Baltimore or Frederick. You can also search our inventory online to see what’s available in a lot near you.