If your current vehicle is too small, too big, unreliable, impractical, or just plain non-existent, you’re probably thinking about shopping for a new car. Don’t overlook used cars in your search. A “new-to-you” used car is often a practical choice for your wallet and commute.
When is a Used Car the Best New Car?
Brand new cars certainly have their appeal—that new car smell, the latest features and gadgets, virtually no miles logged, and the ability to get the exact make and model you want. It all comes with a cost, though. While depreciation of a car varies based on a lot of factors, a new car can lose 20% or more of its value after one year. Buying a car that’s been owned just a year or two can save you significantly.
Swayed by the cost-savings of a used car? Good news! The used car market is booming, so you should have plenty of options to choose from. That means you can afford to be picky. Here are five things to look for in your used car search.
Age of the Vehicle
We talked about the savings a year-old car can provide. Go with a five-year-old car and depreciation hits a whopping 60%. That’s quite a discount for a car that’s still fairly new. Depending on mileage, a vehicle in the 1-5 year age range has lots of life left and plenty of the newer features.
What Mileage is Too High?
There are a few things to consider when you’re deciding how many miles is too many for your next vehicle. First, keep in mind that a well-maintained car can easily outlast 100,000 miles, so don’t limit yourself to only very low mileage options. The costlier repairs typically start to crop up around the 75,000-mile mark.
Think about how many miles you plan to put on the car. If it’s significant, you may want to keep the max mileage in your search lower. If you have a very short commute or drive infrequently, a higher mileage car might not be a problem. The make of the car makes a difference too. Some makes are more costly to maintain than others.
The Condition is Key
While you probably want the car you buy to be pristine, keep in mind that small dings and scratches can bring the price down a bit without affecting the function of the vehicle. On the other hand, watch out for more significant damage. Look closely for signs of rust which can quickly turn into a serious issue.
What’s happening underneath the pretty paint is even more important. You don’t want to get stuck with a car that's about to need an expensive repair. Get a vehicle history report and have your mechanic or a knowledgeable friend take a look under the hood before you finalize the deal.
A certified pre-owned vehicle offers more security in the knowledge that a neutral third party has inspected and refurbished the car. It may also come with an extended warranty or satisfaction guarantee. Because these vehicles are sold by a third party, you can expect to pay a little more than you would through a private sale.
Is the Value There?
Depreciation in the first few years of a car’s life can save you money. If you expect to resell the vehicle at some point in the future, you’ll want a car that maintains value well during the time you own it. If you plan on driving the car until the end of its useful life, on the other hand, resale value may not be as important to you. Do a little digging on the make and model you’re interested in to see how its value is expected to hold up.
Is it the Right Car for You?
If the car doesn’t meet your needs, it’s not a good choice for you. Think about how many seats you need, the conditions you’ll drive in, and what features are must-haves. No matter the price tag, it’s not a good deal if it isn’t practical for your lifestyle.
Are you ready to make an offer on a vehicle? Line up your financing first so you’re ready to seal the deal. Our used vehicle loan rates will make the deal even sweeter! Apply online or let us take your application over the phone at 484-223-4200.
About Cori Gosser
Cori is the Vice President of Lending at GOLD. She directs and coordinates all lending activities, oversees a staff of Loan Officers and Associates, and helps GOLD Members take charge of their financial futures with loan products that fit their needs. Cori genuinely enjoys seeing our Members save money and watching their credit scores increase and lives improve due to guidance from her department.
Automotive - May 13, 2019
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