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Buying a used vehicle could save you a lot of money.
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There’s a reason many consumers prefer new cars to used ones. There’s something to be said for getting to drive away in a vehicle in perfect condition that’s loaded with all sorts of cool new features.
But if money is tight these days, which is the case for many consumers due to persistent inflation, then you may want to consider going the used car route instead. In fact, now’s actually a pretty good time to be looking at a used car.
Used car prices are down
As of Dec. 31, 2022, CoPilot’s Return to Normal Index found that used car prices are not only dropping consistently, but are dropping at a record-breaking pace. That month, used cars were listed at an average price of $30,899, representing the sixth consecutive month of prices dropping.
Meanwhile, in January, the Consumer Price Index found that used car prices were down 11.6% on an annual basis. So all told, it may be a good time to go out and look for a used car rather than a new one.
In fact, for some added context, Kelley Blue Book reported that as of November, the average new car sold for $48,681. So clearly, buying a used car will mean shelling out a lot less money.
Is a used car a better choice for you?
If money has been tight in your world, then it could pay to opt for a used vehicle over a new one. For one thing, spending less on a car should mean having a smaller monthly auto loan payment to work into your budget. At a time when you may be juggling many expenses, that’s a good thing.
Also, you may find that a used car is less expensive to insure than a new one. One factor that goes into the cost of your auto insurance is the cost of fixing or replacing your car if it’s damaged. If you buy a used car with a value of $20,000, that’s a less expensive vehicle to replace than one costing $45,000.
Along these lines, if you end up needing to repair your car, that bill may be lower for you with a used car. The reason? Used cars may have older parts that don’t cost as much to replace as newer cars with more expensive components.
As an example, more new cars are starting to build cameras into the passenger-side mirror. Many older cars don’t have that. But because of that feature, replacing a mirror with a camera could be three or four times more expensive than replacing a standard mirror.
All told, it’s easy to see why new cars appeal to so many drivers. But remember, new vehicles lose value the moment you drive them off the lot. So if you’re really just looking to fulfill a need — having transportation — then you may want to stick to a used car this year, especially since prices are down among previously owned vehicles and are still higher for cars that are brand new.
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