Why Now is the Best Time to Buy a Used Car

Posted by Nurul Islam on December 24th, 2018

Why Now is the Best Time to Buy a Used Car

Buying a used car has always been a lucrative enterprise. Mainly, this is because used cars are cheaper than new cars. Despite the lower ticket price used vehicles save buyers money in other ways. Used cars lower monthly insurance rates, they shave cost off registration and allow you to buy more with your budget. Recent trends in the automotive industry have also made today's used car market ripe with even more value. Presently, there has never been a more opportune time to buy a used car. The first trend affecting the automotive industry is depreciation.

Depreciation

Depreciation is the loss of value an asset experiences over time. In this case, the asset in question is a used car. Used cars have dropped around 3,000 in value since last year. The steep depreciation of used cars has also affected their price. The larger the amount of depreciation, the lower the total cost of the car. Additionally, steep depreciation hurts the resale value of newer cars. In terms of an investment, buying used cars is less of a risk than purchasing new.

Over-Production

Another trend affecting the overall price of a used vehicle is over-production. A primary factor causing a higher depreciation rate is alsoover-production. The last seven years have seen a steady increase in car sales. In turn, this increase has led to a higher output of used vehicles. Businesses usually incentivize selling to alleviate over-supply. The strategy applied is a decrease in prices.

Simularities

Smartphones tend to produce a newer model every year. The amusing thing about this is that the difference between old and new models are slight. The automotive market has done the same thing over the last seven years. It has produced new variations of different models. These models do not release every year but are frequent enough to merit numerous similarities. The differences between these variations are incredibly slight, allowing savvy consumers to avoid buying new. A new car these days is pretty much the same as a two to three-year-old model. A consumer can buy a used car, refrain from telling anyone its used, and pass it off as a new car. In addition, used cars carry a series of perks. They not only possess a discount price, but other charges surrounding the operation of a car are discounted as well.

Insurance Cost

One outside discount attributed to used cars is insurance. Car insurance is based off of the value of a car. Many expensive cars bear higher insurance rates as the cost of repair is a higher risk. Depreciation lowers the total value of a car. This means that used cars will automatically provide reduced insurance rates as their value has already depreciated. The risk attributed to used cars is less than that of a new model.

Registration Fees

Registration fees are another price factor that is based on a car's value. Generally, a registration fee is calculated by a car's transaction price. Used cars have lower transaction prices than new models. Therefore, the reduced transaction fee of a used car provides a reduced registration fee.

Getting More

Luxury vehicles are a popular draw for consumers. They are also incredibly expensive. The discount price of used cars can merit purchases outside budgetary reach. Mostly, this reflects the effect of depreciation, but it also has to do with over-production. A used Toyota Camry is very similar to a newer model. A consumer can spend less on a used model, but still attain the benefits new models advertise.

Reliability

Companies like AutoCheck and CarFax have significantly reduced the risk of buying used. Consumers no longer have to take such a gamble on a used vehicle. Automotive reporting services provide a full history of a given vehicle. Consumers can see if the car has ever been in an accident, how many times it has been serviced, and whether the vehicle was considered a total loss. This trend enhances price by ensuring reliable transportation as a trade-off.