People once said that buying a used car was buying someone else’s problem, but the huge popularity of leasing has meant that tens of thousands of high-quality used vehicles are coming off lease and being put up for sale every year.
In many cases, these vehicles have had only one driver. Most have been well maintained, since the cars have been under manufacturer’s warranty for their entire lives.
Still suspicious? Then do your homework. Since many leased vehicles are maintained and repaired at the dealership that leased them, you can often see all of the vehicle’s service records before buying. It’s even possible to transfer the balance of the manufacturer’s warranty to you, the buyer.
You lose a substantial part of your investment in a new car the moment you drive it off the lot. On average, domestic models lose about 50 percent of their resale value during the first three years of their life, while imports lose nearly 50 percent over the first four years.
This rapid loss has everything to do with fashion and little to do with the vehicle’s true worth. Thanks to improved engineering and tighter quality control, cars last longer than ever and their average life span is now more than ten years. So buying a three- or-four-year-old vehicle means you are getting 70 percent or more of its useful life for around 50 percent of its original cost.
3. Fewer Hidden Costs.
New cars may appear reasonably priced if you look at the bare-bones sticker price, but tack on freight charges, predelivery inspection and sales taxes, and you’ll feel as if you’ve been sideswiped by a tank. “That new model advertised at $19,000 is really going to cost $24,000 to drive it off the lot,” says Michael Turk, consumer advocate and lawyer for the Automobile Protection Association (APA). “That’s what makes used cars such a great value.” There are no nasty surprises when it comes time to pay the bill.
4. Lower Insurance Rates. A used car can also save you hundreds of dollars in insurance costs. In downtown Toronto, for example, a 40-year-old man will pay $162 a month to insure a 2002 two-door Pontiac Sunfire GT. He will pay only $133 a month to insure the 1997 model of the same car. That’s a yearly savings of $355.
All told, the savings from driving used cars rather than new ones can easily surpass $1,000 a year.