Why Buying a Used Car Can Be a Better Option for Budget-Conscious Buyers

Posted Wednesday, Apr 26, 2023

Are you looking to buy a car but don't want to break the bank? Buying a used car can be an excellent option for budget-conscious drivers. Not only do used cars hold their value longer than new ones, but they also come with a significantly lower price tag due to decreased depreciation.

Moreover, there are plenty of ways you can save even more money when purchasing your ideal secondhand set of wheels. From negotiating on pricing and seeking out dealerships that specialize in certified pre-owned vehicles to factoring in extended warranties and other cost-saving measures, Read on to explore why buying a used car may be the best way forward!

Top 5 Reasons to Choose a Used Car for Your Budget

1. Lower Purchase Price

Are you looking to buy a car but want to stick to a budget? Opting for a used vehicle can be the right choice. Usually, used cars come at a lesser cost than brand-new ones. The difference in price can range from a few thousand to tens of thousands of dollars.

For example, the average price of a brand-new 2017 Toyota Camry is about $24,000. If you search the pre-owned market, you can get the same 2017 Toyota Camry for only $15,000 with little wear and tear. You can use that money for savings and emergencies.

New cars in the US have an average price of $40,000, while the average used car price is about $20,000. By buying a used car, you can save around $20,000 or more.

In addition, the insurance premium and registration costs for a used car are less expensive than those for a brand-new car.

2. Lower Customization Costs

Buying a used car can be a great way to get the vehicle you want without breaking the bank. Not only will you save money on the upfront cost, but you may also find that many used cars come with customizations already done by the previous owner. That means you won't have to pay extra for modifications and can still get the look and feel you want.

On average, customizations for a car can cost anywhere from $500-$1000, depending on the type of customization and the parts needed. But if you get a used car, you can have access to these customizations for free.

For example, you can get a car with better-modified rims and body. Shopping used doesn't mean settling; you can find quality modified options without having to max out your budget.

3. Lower Sales Tax

Purchasing a used car is an appealing option for budget-conscious buyers. Aside from being potentially more affordable, another attractive advantage of choosing a pre-owned car is the reduced sales tax bill. This tax tends to vary depending on the purchase price in each state in the US.

California's sales tax rate for new car purchases is 7.25%, while the rate for used cars varies depending on where you live. For example, if you buy a new car worth $40,000, you will pay $2,900 in sales tax. If you buy a used car worth $20,000, the amount of sales tax you pay will range from $1,450 to $1,900, depending on your county of residence.

In some states, purchasing a used car can save you even more money through tax exemptions or lower rates. For example, in Texas, the sales tax rate for used cars is 6.25%, which is lower than for new cars.

Additionally, some counties provide an exemption for the first $20,000 of the purchase price. So, if you're in Texas and shopping for a car, it might be a good idea to consider buying a used car to take advantage of these tax exemptions.

However, before you make a purchase, it's crucial to double-check the sales tax laws in your state or county. Don't forget to consider other possible expenses, like registration fees or maintenance costs, before swiping your card.

4. Avoid Depreciation

One major benefit of buying used is the ability to avoid depreciation.

Depreciation is a term used to describe the decrease in the value of a vehicle over time. When you purchase a new car, it often loses significant value as soon as you drive it off the lot. This means that if you were to sell it shortly after buying it, you would likely receive much less than what you initially paid.

According to Kelley Blue Book, some cars can lose up to 20% of their value in the first year of ownership alone. Over five years, that number can skyrocket to 60%. Imagine buying a car for $40,000, only to watch its value drop to $16,000 after just five years.

But with a used car, that initial depreciation has already taken place. As time goes on, the value of a used car decreases at a slower rate. For example, you can get a car that was initially sold at $30,000 for $19,000 after three years on the initial depreciation.

5. Save on Maintenance Costs

It is generally assumed that a used car has an increased maintenance cost, but the opposite is true. New car owners pay an average of $1,186 for annual maintenance and repairs, while used car owners pay an average of $573. This means choosing a pre-owned vehicle could help keep more money in your pocket for other important expenses.

Moreover, according to CarMD, a used car can save you more than $600 annually on maintenance and repair costs alone.

Auto Provider Inc- Your Stop for Budget-Friendly Used Cars

Purchasing a used vehicle has several advantages, such as getting a discounted price and generally having to pay less in taxes and registration fees. An additional bonus is that more years are usually left on the car's warranty or extended warranty coverage. Ultimately, these benefits make buying a used car attractive for many shoppers who don't want to break the bank.

If you are looking for an economical way of getting yourself around town. In that case, investing in a quality used car from Auto Provider is worth considering. With our extensive selection of the latest model vehicles and fair pricing, Auto Provider can help you find your dream car without financially burdening you.