Why Buying A Used Car Is More Expensive Than You Might Think
It’s no surprise that cars are expensive these days. Recent chip shortages meant that most cars were more expensive to manufacture, bumping up their prices and also making them a little harder to obtain. As such, a lot of people have turned to buying used cars in order to save a bit of money. However, used cars can be a little deceptive in their pricing and it’s important that you learn about the hidden expenses involved.
In this post, we’ll be talking about why buying a used car could be more expensive than you might think.
Used cars can sometimes be harder to maintain
One of the biggest problems with buying a used car is that it can be more costly to maintain if you’re not careful. After all, a used car has older parts that are more worn, so it’s natural that they might need a bit more attention. In short, maintaining a used car can be more expensive due to the increased likelihood that your parts need servicing and replacing. This is often handled by the dealership and they’ll ensure a car is maintained properly before being sold, but this isn't always the case depending on the seller.
Used cars may have higher insurance costs
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Some used cars typically have higher insurance costs because they’re older, they have fewer security and safety systems, and they might be closer to breaking down than a new car. This means that you’ll usually be paying more in monthly expenses compared to a new car. So if you’re looking to save money in the long run, it’s worth doing a bit of research on insurance premiums and shopping around for a good deal with your used car.
Used cars don’t always depreciate in value
Not all used cars depreciate in value by huge amounts. Some cars can still retain a lot of value and you’ll still need car finance to afford most used vehicles. Yes, you can definitely buy some used cars for a fraction of their original price, but these are going to be almost a decade old in some cases. These types of cars can be attractive if all you want is a cheap and affordable vehicle to get you from point A to B, but they’re so old that you’ll need to perform a lot of regular maintenance on them if you want to get the most out of them.
Used cars might grow in value if they’re vintage
Used cars can also increase in value depending on how sought-after they are. If you’re looking for an old model that has a fantastic reputation or has been used in movies before, then there’s a high chance that it’s going to be even more expensive than some new car options. In short, try to avoid buying a used car if it’s got a great reputation due to its design or other features that you might not be interested in. There are loads of cheaper used car options out there to consider instead.
About The Authors
Frazer Pugh - I work in the investment management sector as a professional. Previously, I advised top financial services companies on balance sheet management, portfolio planning, and valuations as a consultant. I am currently pursuing a part-time MBA at Melbourne University, where I am a lecturer in accounting and hedge fund strategies, as well as a mentor/coach in a part-time equity analysis initiative. I have a bachelor's degree in economics, a master's degree in finance, and am a Chartered Accountant. I enjoy instructing and assisting others in achieving their objectives.
