If you're in the market for a new set of wheels, it might be tempting to splurge on a brand new vehicle. However, you'll most likely be better off in the long run when you choose to buy used cars instead. Here are a few of the best reasons to opt for used instead of new.
Avoid Rapid Depreciation
New cars can be a fun addition to your household, but should you need to turn around and sell the vehicle anytime soon, you'll end up losing quite a chunk of your investment. New cars depreciate rapidly in value, and they're automatically worth about 10 percent less as soon as you drive off the lot. Used cars also depreciate in value over time, but they retain their value for longer than new cars.
Make Smaller Payments
Even if you can afford the hefty payments on a brand new vehicle, it's usually best to offer yourself plenty of wiggle room in the budget. It's always a wise decision to stick with what you can afford and live beneath your means in order to pay off debt quickly and build wealth. When you're trying to save your money for other important things in life, avoid the high payments on a new car and opt for a used vehicle. You'll benefit from smaller monthly payments and a shorter term for the loan.
Save on Sales Tax
Purchasing a new car comes with a host of other fees tacked on to the purchase price. Depending upon where you live, it might be in your favor to ask about the difference in sales tax between new and used vehicles. When you're looking to save money, it's in your best interest to be smart about making big purchases. A car loan is a big investment, and you'll likely save thousands by purchasing used cars.
