Why Budget-Conscious Buyers Should Consider Purchasing a Used Car

Posted Monday, Oct 16, 2023

A budget-conscious buyer finds it difficult to spend money on anything. When it comes to buying a car, they are undecided about whether to go for a used or new one. Buying a used car makes sense if you want to get the most out of your money and have a set limit that you can’t exceed.

According to the Federal Reserve’s Index, inflation in the US rose by 5.4% more in January than from a year ago. The Survey of Professional Forecasters predicts that by 2024, inflation will rise by 2.4%. So, right now is the perfect time to buy a car before prices increase.

Before talking about why buying a used car makes more sense, let’s take a look at some key considerations for setting your budget:

Setting Your Budget

Your budget isn't just about the purchase price of the car. It also includes ongoing expenses like fuel, insurance, maintenance, and potential repairs. Here are a few costs you need to factor into the final price:

• Total Cost of Ownership: Consider the total cost of owning a car over its lifetime. As mentioned above, there are plenty of things you need to include in it. Use online calculators to find out the numbers based on the car model you plan
• Monthly Payments: If you are financing your car, calculate your monthly payments. Remember that, despite the ease of small payments, you will pay more interest over time if you opt for a longer loan term.
• Down Payment: A larger down payment lowers your monthly payments and reduces the overall cost of the car. Try to make at least a 20% down payment.

Now that you know your price range, here’s why you should visit a used car dealership:

Reasons Why Buy a Used Car

They Offer Certified Pre-Owned (CPO) Programs

Many used car dealers offer CPO programs for their used vehicles. These programs provide buyers with a thorough car inspection, a manufacturer-backed warranty, and additional perks like roadside assistance.

Some buyers believe this is the dealer’s way of getting more money from your pocket, but CPO offers significant savings compared to new vehicles while providing extra assurance of the car’s quality.

CPO cars are usually a few years old and have relatively low mileage under a predetermined limit. Each car undergoes a comprehensive inspection, often involving over a hundred examination points. This inspection covers everything from the interior and exterior condition to the transmission and engine. Any necessary repairs are made to bring the vehicle up to CPO standards.

Once the car passes the inspection, it is eligible for an extended warranty, which significantly boosts its appeal and value.

Less Depreciation

One of the biggest advantages of buying a used car is depreciation, which is steeper for new cars. The latter lose value rapidly during the first few years of ownership. If you think about it, you are paying a premium for just being the first owner of a car.

In comparison, used cars have already gone through the steepest part of their depreciation curve. This is why they are cheaper. When you eventually decide to trade-in or sell your used car, you won’t experience the same level of financial loss you would have when selling your new car.

Low Insurance Cost

Some people believe that since a used car has undergone repairs, it costs more to insure it. On the other hand, a new car comes with the latest technology, offering more safety, which is why it is insured at a lower rate.

Insurance companies base their rates on several factors, including the car's type, model, value, and the cost of repairs. So, it will cost more to insure an electric car than one that runs on fuel.

Affordable Taxes

The cost of registering a vehicle is tied to its value in many states. This means a used car will have lower tax fees than a new car with a higher value.

More Variety

When you opt for a used car, you have a much wider range of makes and models to choose from. This means you can find a vehicle that matches your budget, needs, and preferences more precisely. You are not limited to the latest models usually available at showrooms, giving you the flexibility to explore older but still reliable cars.

Affordable Customization

Many people love modifying their cars. Desirable upgrades, such as a digital audio system, window tinting, fancy rims, headlights, and more, come at a hefty cost. Even a few minor upgrades add up and make the car unaffordable.

Let’s say the previous owner already made a few upgrades worth $2,000. These include a screen on the back of the front seats and a seat warmer. When you sell the car, its price won’t rise by $2,000, but you will make a profit.

Financing Your Car

Used car dealerships offer financing options to help you make your purchase. However, it’s possible that you might not find the rate desirable at which they are offering you the car loan.

So, shop around before making a decision. Get quotes from banks and credit unions. Choose the option that offers the lowest interest rate and most favorable terms. To keep ownership costs down, follow the manufacturer's recommended maintenance schedule. This can prevent costly repairs down the road.

Set aside some savings for unexpected repairs. Even reliable cars develop issues, and having a financial cushion can relieve any budgetary stress.

Final Word

Being budget-conscious does not mean sacrificing quality or safety. Many used car dealerships offer excellent value. They have a reputation to maintain and therefore offer cars in mint condition.

One of the most persistent myths about used car dealerships is that they offer junk. This misconception stems from the idea that all used cars are worn out. However, this couldn't be further from the truth. Many used car dealerships thoroughly inspect and refurbish their vehicles before putting them up for sale.

They provide a complete car history, ensuring you make a reliable purchase.

Prime Motors Co. offers people the ideal place to buy their dream car. They are more than just a used car dealer. Explore their wide range of inventory today and find a car according to your preference. For more information, visit their website or call (971) 512-0578.