The global economy has been experiencing a crisis since the Covid 19 pandemic started. Although there are growth projections global recovery is still set to decelerate. For us ordinary folks this means we have to brace ourselves for higher inflation and commodity prices. As such it pays to be smart when in purchasing necessities like a car. I guess the first question is can you afford to buy a car now? If you want to up your chances of affording a car then go for used cars instead of new ones.
Buying a new car is an aspirational goal for most people. But that may not be practical given the current economic situation. According to a Forbes Wheel article people are paying above the list price to buy cars since early this year. It further suggests postponing your purchase of a new vehicle. Being practical buyers we scratched off the new vehicles on our list and looked into used vehicles for our purchase this year. We got ourselves a second-hand SUV and based on our calculations it is indeed better than purchasing a brand new one. Here’s why.
Price. Used vehicles are definitely priced lower than new ones. Second-hand vehicles are usually priced 50% lower than new ones so that’s definitely a plus on the affordability side. However one should exercise due diligence in checking the car’s condition to make sure you’re not getting lemons. Aside from visual inspection check for certificates. There are Certified pre-owned vehicles that have gone through inspection to ensure the quality of the vehicle.
Savings. The lower price tag is just the tip of your savings when you buy a car from a used car dealership. You also get to save on depreciation costs because the bulk of the depreciation is already done. Thus, depreciation occurs at a much slower pace in used cars compared to new ones. Extra charges like shipping and destination fees that are common in buying new vehicles also do not apply to used cars.
Eco-friendly. You’d be helping the environment by reducing waste by purchasing a second-hand vehicle. Aside from re-using resources, you’d also save the environment from all the carbon footprint involved in producing a brand new vehicle.
Practicality. The low price of used vehicles alone makes them a practical choice for buyers today. Especially if the vehicle you’re buying has been well maintained. Old vehicles are also durable and there’s always a market for used vehicles. This means you can re-sell it once you’re ready for another upgrade. You also don’t need to pay everything in full upfront to buy a car that’s already been used. There are also loan or financing options for these types of purchases.
As you can see used cars provide a better option than new ones when buying a car. In this economy, we have to stretch our finances as far as we could. So why should I shell out a ton of cash or take out a huge loan for a new car when I can get what I need from a used SUV at a much lower cost. Mind you we calculated everything from car amortization to fuel budget to make sure we’re getting the best deal. A new car sounds good and looks good but it’s not always the best deal around. The best deal for us right now is to get a new used vehicle that fits both our needs and budget.
