If you purchase a new vehicle, the vehicle’s value will decrease by about 20% when you drive away from the dealership and will decrease by another 10% within just a year of ownership. Buying a used vehicle results in a lower depreciation, meaning your vehicle will lose less value when you purchase it.
Your car insurance is based on your vehicle’s worth. For new vehicles, you will accordingly have higher insurance, since new vehicles have higher values. When compared to a new model, the insurance for a used vehicle tends to be lower since it has less value, saving you money over time.
Used vehicles usually carry a smaller price tag than their new counterparts, which will save you more money upfront. With a lower transaction price, you can also have lower registration fees in many states, so you’ll have to pay even less for a used vehicle.
When you choose to buy a used vehicle, you will also have more vehicle options that you can afford. In other words, you can afford a more luxurious vehicle if you purchase one that’s a couple of years old since used models are less expensive than new, equally luxurious models.