When buying used, find balance between value, risk
As Consumer Reports says, “buying a used vehicle means finding the right balance of value and risk.” In a recent buying guide, the consumer advocacy magazine advised that two- and three-year-old vehicles are often the best values. Why? Well, the purchase price is lower than a comparable new car’s price, but continuing ownership expenses are cheaper too, such as collision insurance and taxes. Plus, a two- or three-year-old vehicle has already taken its biggest depreciation hit.
When buying a used vehicle, you should consider several issues, Consumer Reports advises.
Used cars have gotten more reliable in recent years. Years ago, rust and exhaust-system problems were common, but that’s no longer the case. When properly maintained, most of today’s vehicles surpass 100,000 miles without a major overhaul, and many could reach 200,000 miles.
Warranties and repairs
Consumer Reports reminds used car buyers that an older used car is usually out of warranty or close to it. And, as time goes on, more mechanical problems are likely to emerge. So, that means that owners will have to pay for repairs and worn out items such as tires, brakes and batteries. However, depending on the cost of these repairs, the savings over a new car might still more than compensate.
A major disadvantage of buying a new car is its rapid depreciation, which is typically an argument in favor of buying used—especially, again, a two- or three-year-old vehicle.
When buying used, keep in mind that interest rates for new cars are usually lower, though not substantially. Also, you’ll typically pay a bit less to insure a used vehicle. And, finally, though new cars probably have more safety features, the major items such as anti-lock brakes, traction control and side air bags have been commonplace for several years.
To read more tips from Consumer Reports, click here.