When it's time to buy a vehicle, a lot of people are faced with the same dilemma: should we buy used or new? While some people might think that buying a new vehicle is always the best option, we beg to differ. There are many reasons why a used vehicle often makes the best investment.
Here are three compelling reasons why you should pick a used vehicle instead of a new one.
It is said that a vehicle loses roughly 20% of its value as soon as it leaves the lot. Furthermore, a vehicle may lose up to 10% of its value after a year of ownership. So, that's a total of 30% for one year alone, which is a lot when you think about it. The easiest way to offset the depreciation is by buying a vehicle that is a year old.
While these can sometimes be difficult to find, you can go for a two or three-year-old car. And this is an even better deal when picking vehicles who haven't gone through major design changes. You still get the same look for a fraction of the price. Also, depreciation flattens out after the first year, so you can buy a used Toyota Hilux for example and resell it after a year without it losing much value, allowing you to drive the car for a year for almost nothing.
Fewer Insurance Costs
Another great reason to go for a used vehicle is the lower insurance costs. It's a well-known fact that new vehicles have much higher insurance costs. Since value is one of the most important deciding factors when calculating insurance fees, an older vehicle that has already depreciated in value will cost much less in insurance. Also, if your vehicle is old enough, you can do away with features like theft cover, for instance, which will allow you to save even more.
Getting a Better Vehicle for Less Money
Buying a used vehicle can allow you to buy a much more modern vehicle with better features than you could on the same budget. For instance, you could buy a 2-3 year used luxury car like a Mercedes C class for roughly the same price you would pay for a brand-new Honda Accord that will lose 20% the minute you drive it away from the car lot.
If you could give most people a choice between a Mercedes and an Accord, most of them would pick the Mercedes in a heartbeat. You could also buy an SUV that was only three years old instead of a 2017 family sedan. Used vehicles are simply a much better investment in most cases.
As you can see, buying a used vehicle could be the best decision you've ever made in your life. When you consider depreciation, value, and insurance costs, unless you absolutely want to be the vehicle's sole owner, choosing a used vehicle over a new one is a no brainer.