Purchasing a used car can be just as rewarding as buying a new one and less expensive, too. If your trusty, paid-off car starts having major mechanical problems – and it will – it might be time to replace it. Before you sign on the dotted line to finance that brand-new vehicle, though, consider buying a used car from Auction Direct USA in Raleigh, NC.
Now that it’s time to consider replacing your vehicle, where do you start? New cars are certainly nice and usually come with the promise of low payments, low-interest rates, warranties, and more.
The problem, though, is that when you sign to finance a vehicle, it can depreciate as much as 9 percent as soon as you leave the car lot, according to Edmunds. You just agreed to pay $20,000 for that car, and one minute after you start it up, its value becomes $18,200. A year later, you are still paying $20,000 (plus interest), but that car is worth $16,200. After two years, the value is $13,800.
A new car also incurs more costs than a used car when it comes to registering it and paying sales tax, which is usually calculated based on the value of the car. Then there’s the cost of insuring that nice new ride. A new vehicle often costs more to insure than a similar used one because the manufacturer’s suggested retail price often is considered when determining the insurance premium.
If you are looking for a great deal – and who isn’t? – consider purchasing a used car that was worth $20,000 two years ago for considerably less now. Sure, it has a few miles on it, but if you find a reliable pre-owned car with good service records and low miles, you still might drive home with that new car smell. And after you get it registered and insured, your neighbor with the new ride will certainly be jealous of all the money you now have.
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