In 2018, 39.4 million used cars were sold in the United States according to McKinsey’s auto retail estimates. During the same period, just 17.3 million new vehicles were sold. In other words, the used car market is twice the size of the new car market. More and more Americans prefer used cars over new ones due to price considerations. And the reality is that a new car may not be the best option for many people these days. Let’s take a look at what a new car implies and why you may be better off buying a second hand vehicle.
A New Car May Not Be the Best Option for You
Buying a new car sounds nice. You get to enjoy a vehicle that nobody else drove before. You have a warranty, so you don’t have to worry about much for three to five years. It’s a dream scenario. The only problem is the price of a new car. The price of new cars has been rising every year. A decent car for a family of four costs around $40,000. In case you’re interested in luxury vehicles, you would pay over $100,000. This is a lot of money for most of us. Of course, you may lease the car and pay it in five years. However, the leasing contract will increase the price of the car significantly.
On top of the cost of the car, you need to take into consideration other costs. For instance, you are forced to service the car at the dealership for the duration of the warranty (or lose the warranty if you don’t do it). The insurance premiums are higher for new cars than for used vehicles. In some states, even the annual registration fees are higher for new vehicles.
Is There Such a Thing as “Easy Auto Sales”?
If you want to buy a car and you don’t want to pay a small fortune for it, we advise you to look at a second hand car. People selling new cars will try to convince you that finding a decent second hand vehicle is difficult. You will hear about the risks and about how difficult it can be to buy a used car. The truth of the matter is that Americans bought almost 40 million used cars in 2018 (and the number was definitely higher in 2019). Buying a used car is not that difficult, if you buy it from a reputable seller.
3 Reasons to Choose a Dealership
A used car dealership sells used cars. However, because the competition is fierce, every dealership is trying to offer as much value as possible to get more clients. One of the reasons why you should deal with a company is the fact that you can minimize the risk. It’s very rare for an established dealership to sell a faulty vehicle and lie about its history. Dealerships inspect each vehicle before they put it up for sale.
Another reason why a used car dealership is a better option than a private seller is the help you get. The dealership wants to sell the car ASAP and get the money. The salesperson will gladly help you with the paperwork and will be more than happy to give you the best advice to speed up the sale. Easy auto sales are something a reputable dealership can take pride in. Faster transactions also mean more cars sold every month. Both the dealership and the buyers win.
What About Costs?
Yes, the price of a used car at the dealership will be higher. Dealerships need to pay their staff, cover all other costs, and make a profit. A private seller, on the other hand, just needs the money and doesn’t think about making a profit selling his or her old car. However, buying the car from a company is safer. You have no real guarantee that the private seller is not lying about the technical condition of the vehicle. Or perhaps the odometer has been tampered with. A private seller can just take the money and disappear. These risks are greatly minimized when doing business with a dealership.
And if you really want to be sure that the car is in mint condition, look for Certified Pre-Owned cars. Dealerships sell them and they’re not as cheap as regular pre-owned cars. However, the warranty you get for a CPO car may be exactly what you need for your peace of mind.